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8/27/2015

Different Views of Product Lifecycle


Week 5 & 6 Many different views of product lifecycle
User view
Different Views of PLM Product view
New product view
Manufacturer view
Service view
Faculty of Engineering
Environmental view
University of Surabaya Business view
Marketing view
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PLM The Generic Lifecyle Model


A PLM strategy addresses the full spectrum of
opportunities across the entire product lifecycle

Discover Prototype Design Manufacture Market Maintain

PDM

PLM

The S-curve model


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Time-to-market
The time required to bring a new product to
Different phases differ in the challenges
the market they present and in their most important
Time-to-volume focus areas
The time required to begin the mass
production of the product
The metrics used to measure the
Time-to-react performance of a product in its current
The time required to carry out changes lifecycle phase must be in tune with the
demanded by the market, customers, or
internal interest groups in the supply network phase and the strategic goals of the
company
Time-to-service
The response time to carry out a service
order from the customer
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Time-to-market Time-to-market
y Indicators to measure operations
The turnaround time for NPI is too long
Lost market share, lost learning
y Setting indicators and constant follow-up during NPI
possibilities, and loss of competitive phase
Problem advantage y Ability to share information within organization or with
If it takes time, it also takes a lot of work partners
Inefficient process
y The numbers of errors and corrections (BOM)
y Development potential by PLM
y Cooperation in the value network
NPI is to complex and ineffective
Older technologies, older principles of
y The use of various data standards
product management y The transfer and distribution of information
Causes The current NPI process does not meet accelerates
the demands of todays business needs
y Good usability and transfer of information
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y The quality if information improves 8

Time-to-volume Time-to-volume
Unable to bring a large enough y Indicators to measure operations
volume to the market
Poor availability of the necessary
y Ramp up time (the time to full scale production from
components NPI)
Problem Poor quality of product design or y Number of product changes during ramp up time
production planning
The poor cooperation in network y Yield of p
production p
process
product development y Corrections made during production
y Development potential by PLM
Poor ability to transmit product data in the y Developing communication in the value network
supply chain y Improving the manufacture of the product and
Causes Unable to make the necessary changes
changing problem components
Defective product data

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Time-to-react Time-to-react
Unable to react quickly enough
y Indicators to measure operations
Unable to bring products to market in y The number of product changes and their nature
rhythm with customers wishes, market
Problem changes and set timetables
before and after launching of the product
Quality problems in the production or
during delivery of the product
y Development potential by PLM
yS
Supporting
ti ththe fformall change
h processes with
ith
appropriate tools
The speed, effectiveness and y Shortening the turnaround times for change
productivity of the product process and processes and making the distribution, retrieval and
change process are bad
Causes Takes too long to collect customer transfer of information possible
demands and quality and design
feedback

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Time-to-service Time-to-service
Customers are being lost to competitors y Indicators to measure operations
better able to produce after market y Service turnaround time from customer request to
services
Problem Competitors are able to serve more
delivery
quickly with shorter response time, y The customers opinion of the service
better quality of services
y Getting
g new after sales customers
y Customer retention
Poor availability of product y Development potential by PLM
documentation from customer interface y Improved availability of information from the customer
Disconnected and outdated product
Causes documentation
interface
Uncontrolled product changes during y Better retrieval and real-time availability of information
lifecycle from a single source
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Stages in the Product Life Cycle - Stages in the Product Life Cycle - Product
User

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Stages in the Product Life Cycle


New Product

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Stages in New Product Development Process Stages in the Product Life Cycle -
Manufacturer

Imagine Define Realize

Support
Retire
Service

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Stages in the Product Life Cycle - y The new product lifecycle ends after 5 years
Service y The service lifecycle can last up to 30 or 50
years
The relation of the new product lifecycle to
y During the service lifecyle, the most important
the service lifecycle of delivered product
indicator is time-to-service performance in
servicing the installed product base
y More challenges the product information with
all its variations must be maintained for decades
y It is important to understand the impact on the
overall service lifecyle of decisions made in the
various stages of the new product lifecyle
y Considering both the market lifecyle and service
21 lifecyle when planning the actual products 22

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Integrated Lifecycle Services Stages in the Product Life Cycle - Environment

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The Cost and Benefit trends in A business-oriented approach to


The Product Life Cycle the product lifecycle
y Explores and briefly analyzes the forces driving
the significant changes in the market that have
affected not only design and manufacturing but
rather the entire product life cycle.
cycle
y Identifies the expected changes and business
opportunities in manufacturing due to new
legislation requiring manufacturer accountability
during the entire life cycle.

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The drive for more new products and


larger varieties, motivated by competition
y Ensuring ecological excellence while at the and customer demand
same time securing the economic interests of Changing consumption patterns and life style
industry and creating employment.
The drive by society members for a clean
and safe environment
y In order to achieve the required
q balance
S
Sustainable
t i bl d development
l t
between cultural and public attitudes and Usage with fewer resources, and having less
requirements on the one hand, and the industry impact on the environment

demand for profit maximization on the other,


every aspect of the product life cycle must be The drive by industry for maximum profit
analyzed and optimized. Offering more new products,
Satisfying consumers changing requirements
and respond to frequent, sharp and abrupt
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changes in the market 30

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Stages in the Product Life Cycle - Business The pre-active life cycle
The pre-active life cycle phase includes
two stages, design and engineering.
This phase is different from the other two
e cyc
life cycle
e phases
p ases in tthat:
at
it occurs once for a specific product type and
is not repeated for each single product
produced
Upper level product life cycle its direct impact on the environment is
diagram minimal
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Detailed design The active life cycle


y This demand for improved time-to market (shortened Production includes four
development cycle) has two main consequences.
stages governed by the
the expected life span of a new product is shorter
manufacturer, manufacturing,
design engineers are forced to rely primarily on assembly, sales and
existing
g and p
proven technologies
g in order to meet
these demands, leaving little possibility for
distribution and operation includes two such
distribution,
research and development. stages, service (maintenance and repair) and
y The problem: to compete on the market can be upgrading.
approached by reducing the number of Four additional input: raw material provision,
manufacturers through mutual acquisitions and by bought product part provision, use and a
offering more models which use the same modules secondary secondhand market.
and components.
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Stage 1: Manufacturing Stage 2: Assembly


Focused on manufacturing facilities targeted at y In modern manufacturing, three prime sources exist
supplying global market demands and variations. for product parts:
Enhancing the flexibility of manufacturing systems
new parts fabricated in the manufacturing process
through the introduction of reconfigurable (in-house or outsourced);
machines and manufacturing systems designed to
new pparts bought
g from an outside source;;
be efficient
efficient, flexible and responsive,
responsive in particular
when dealing with large part families. refurbished parts cleaned and tested from a prior
Integration between design and manufacturing product (in-house or outsourced).
facilities makes a major contribution y Increased built-in flexibility will be required for
to the efficiency, flexibility and automated assembly processes to deal with the
responsiveness of a system rapid changes in product design, and assembly
(e.g. modular design) processes will be required to consider disassembly
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requirements 36

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Stage 3: Sales Stage 4: Service


y Manufacturers of goods sell their services at the y Whether time-based or condition-based,
place and time desired by the customer. product servicing (i.e. maintenance,
Expensive products, such as photocopiers or product repair or part replacement) plays an
very high quality printers, where customers are important role in protecting the environment.
offered p
photocopying
py g and p printing g services at a y It considerably elongates the life span of the product
certain location or in their facilities and has a much smaller impact upon the
Products that are provided "free of charge" or environment than producing a new product.
almost free, in order to offer customers y The purpose of service is to control the conditions of
services or other products products so as to provide the functionality required
by customers or by society, while keeping the
Single-use products
environmental load at a minimum and maintaining
Home appliances appropriate corporate profits.
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Stage 5: Upgrading Stage 5: Upgrading


y Customer choice:
to upgrade their product
to discard the product and buy a new one y The functionality of a product may be upgraded
by
y improving its appearance
y Modern manufacturing encourages upgrading:
y incorporating new software
it has less impact on the environment than
producing a new product y incorporating new components
reduces the need for entailing EOL costs and y (e.g. replacing the interior of an airplane and
providing better seats with new features, or
is usually a lot less expensive for the customer
upgrading PC performance to provide
than buying a new product
39 increased computing speed or memory size). 40

Stages in the Product Life Cycle - Business End Of Life phase (EOL)
y When the performance of a product has deteriorated and
at the same time new products on the market offer much
better performance and appeal than the original product,
a big gap is created.
EOL processes have received attention due to new
g
legislative initiatives demanding
g manufacturer
accountability for a product over the entire product life
cycle.
Disassembly and remanufacturing of cellular phones can
be a competitive business segment in the European
market.
Detailing the EOL phase of Multiple companies will be served by single suppliers to
the product life cycle perform product disassembly, testing, recycling,
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refurbishment and disposal. 42

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Stage 1: Collecting, testing and Stage 2: Recycling, refurbishment


disassembly and disposal
The next stages of the EOL phase are disassembly, y Due to the general consensus of controlled
testing and identification. hazardous material disposal and the danger of
shipping these materials, numerous local
During these processes, the product is first
companies
p p
provide these services, and the
disassembled and its hazardous parts that cannot
disassembled,
be reused are separated and later disposed of in a business opportunity they offer has been clear for
controlled manner. some time
Other parts are inspected and categorized for y An added business opportunity that should be
refurbishment or recycle. encouraged by government funding is hazardous
waste recycling, which helps reduce or eliminate
The idea is of course to recover the maximal value
of the product and minimize landfill materials. hazardous waste disposal.
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Stages in the Product Life Cycle - The Development Stage


Marketing Initial Ideas possibly large number
May come from any of the following
Market research identifies gaps in the
market
Monitoring competitors
Planned research and development (R&D)
Luck or intuition
Creative thinking
Futures thinking what will people be
using/wanting/needing 5,10,20 years
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hence? 46

Introduction
Product Development Stages
The seller tries to stimulate demand
New ideas/possible inventions
Promotion campaigns to get increase public
Market analysis is it wanted? Can it be awareness needs to spend a lot of money
produced at a profit? Who is it likely to be
aimed at? Explain how the product is used (FAB):
Features Advantages Benefits
Product development and refinement
Lose money, but potential to make profits in the
Test Marketing possibly local/regional
future negative profit
Analysis of test marketing results and
Low sales and profit cost > revenue
amendment of product/production process
The best performance indicator is time-to-market:
Preparations for launch publicity, marketing
the performance and efficiency of the design and
campaign
productizing process
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Growth Maturity
The ability to bring the product to the markets in Many competitors have joined - the market is
sufficient volume without sacrificing quality saturated
A lot is sold - The seller tries to sell as much as The only way to sell is to begin to lower the price -
possible and profits decrease
Other competitor companies watch, and decide Competition can get nasty and commercials are
about joining in with a competitor product intense Persuasive
Persuasive promotion
promotion becomes more
Success breeds imitation important during this stage
Growth will continue until too many competitors in Commercials almost begging the customer to still
buy the product because you still make it just as
the market - and the market is saturated
good
Spending more money on promotion to keep sales The best performance indicator is time-to-react: the
going cuts profit agility with which companies make changes to their
The best performance indicator is time-to-volume products

Decline Decline and Withdrawal


Newer products are now more attractive - even a Product outlives/outgrows its usefulness/
low price does not make consumers want to buy value
Profit margin declines - and so the only way to
Fashions change
make money is to sell a high volume
1. Increase the number of customers Technology changes
- get new customers Sales decline
2. Increase the amount each Cost of supporting starts to rise too far
customer uses Decision to withdraw may be dependent on
The best performance indicator is time-to- availability of new products and whether
service: performance in servicing the installed fashions/trends will come around again?
product base
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When in the decline stage, a firm may: Product Life Cycle - Marketing

Maintain: enhance the product by finding new


uses or by adding new features.

Harvest:
H t reduce
d costs
t andd continue
ti tto offer
ff
the product to a targeted niche.

Discontinue: sell the product to another firm,


or liquidate inventory.

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Stages in the Product Life Cycle - Marketing

Introduction Growth Maturity Decline

Digital cameras

Mini-disc
Electric cars
DVD
VR*

55 *= virtual reality The time at each stage varies


greatly

Extending the Product Life Cycle Extending the Product Life Cycle

1. Increase frequency of use by Product Adding new features, variations,


Market Modification model varieties will change the
Modification
present customers consumer reaction
2. Add new users Create
C t more ddemand d
3. Find new uses Attract more users
4. Change product quality or
packaging shampoo - colors, features
CD players
Windex for cleaning jewelry chip flavors - many kinds
Lemons for hair colouring couples seats at movie theatre
Beer for hair digital sound at theatres
Purpose: to sell more product and cover original investment Purpose: to sell more product and cover original investment

Overlap of Life Cycle for Products A and B Differentiated PLC Management


Strategy Investment Policy Strategic Role Management
Class Focus

Introduction Phased/Selective Establish a Market position


profitable position 1st Mover ?
or cut losses
G
Growth
th A
Aggressive
i Provide
P id ffuture
t S l /Sh
Sales/Share
WINDOWS 3.1 cash flow base Installed base

Maturity As needed to Generate current Profitable Share


protect profits (cost cash needs
reduction, line
WINDOWS 95 extensions, etc.)
Decline Highly restrictive Maximize short- Profits/Cash
term profits; Last in ?
1991 1995 1996 1997 contain losses 60

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Some Dimensions of the Product Life Cycle Speed of the PLC


Since the Intro Stage is getting shorter, and
sometimes the Growth Stage doesnt last too
Speed of the PLC long (because competitors move in)
Length of the PLC p
companies must continually
y come up p with
new products.
The lifecycle and consumers
You can tell when they are in the growth
Diffusion of innovation stage because this is when they introduce
new model variations, and some
improvements to the product.
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Slide 11-14

Length of Cycle Stages Lifecycle and Consumers


Products move through the cycle at different speeds Style: basic and distinctive mode of expression
Because of technology and globalization the Fashion: currently popular products that tend to
introduction stage is getting very short follow recurring life cycles
Some cycles more quickly to maturity, then have Fad: a fashion the enters quickly, fashions with
many product modifications so the decline stage abbreviated life cycles - only popular with certain
d
drags on and
d on groups
Sometimes introduction is very long, or very short,
depending on how easy it is for the public to
understand the F.A.B.
Not all products follow the same pattern
Some products move very fast because they are new
and have no competition so the intro stage is short,
and they go direct to growth stage. 63 64

Five categories and profiles of product adopters

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