Build a connected PLM practice

Companies today face a different calculus when assessing the lifetime impact of their products. The revenue from the initial product sales is shrinking while the aftermarket services are becoming more a growth opportunity. Regulations increasingly require companies to ensure both the production and disposal of their products are done with minimal impact to the environment. The product team are required to develop products that are easy to make, efficient to transport, simple to maintain and repair, and environmentally sound to dispose at the end of life. This broadened horizon brings both challenges and opportunities.

Cover full product lifecycle in development phase

Traditionally the product team focus on how the products are made and used. To improve the lifetime value of the products for your company and customers, you need to expand the considerations to how the products can be serviced and disposed. Sharing your insights such as maintenance and disposal requirements can help the planning and procurement of the spare parts, estimation of service task time and labor, and formulating warranty and service agreements.

Explore aftermarket opportunities

With the margin of original product sales declining, companies are looking for more steady revenue stream from aftermarket services, the broad category that includes the sale and delivery of maintenance, spare parts, and other value-added services. As a start, you can include the estimated costs and frequency of the replacement parts in the bill of materials. Investigate whether you can have a feasible aftermarket business by modeling common factors including demand for consumable parts, maintenance and repair service frequency, and revenue and cost of service personnel. If you are in an industry with short product lifecycle, you should also look into more complex factors such as the cost of supporting obsolete parts and the price fluctuation of crucial replacement parts, such as integrated circuitry and commodity metal. By introducing aftermarket considerations in the development stage, your organization can better plan for targeted service level with accurate part inventory and necessary field technician qualification.

Incorporate full lifecycle impact into your financial analysis

Many development teams evaluate the success of their products based on the brand-new product sales figures. The increasing share of revenue from aftermarket services and parts and the added costs from sustainability requirements for end-of-life disposal have increased the financial impact from the later stages of product lifecycle. As you assess the financial impact of your developing products, the cost and benefit from the service and disposal stage should be factored into the evaluation. Depending on the industry and sales channel, the extent of the aftermarket and disposal you can address may vary, but you can’t afford to make your product decisions based on only part of the product lifecycle.

How Oracle can help

• How Oracle can help
• Accelerate new product development and introduction by unifying the enterprise product record and bill of material across the supply chain to streamline design, requirements, configurations, and change orders.
• Gain deep insights to evaluate your innovation portfolio. Collaborate with Finance, Production, Supply Chain, and Service to get early feedback on the success or failure of your idea.
• Minimize design cost by gaining complete visibility into your products evolution by monitoring product iterations.
• Manage closed-loop quality throughout the product lifecycle to ensure rapid detection and resolution of quality events to improve the overall effectiveness, safety, and profitability of your products and services