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Perspectives

C ONSUMER P ACKAGED G OODS


BRINGING PRODUCT LIFE CYCLE MANAGEMENT INTO FOCUS
Les Levy, managing director of BearingPoints consumer packaged goods industry group, discusses the challenges that businesses typically face when executing enterprise product life cycle management initiatives and offers tips for successful implementations. Product innovation and management, often called product life cycle management (PLM), is becoming a priority for executives of many consumer packaged goods (CPG) companies. Yet the rst challenge they face is distinguishing PLM hype from reality. In spite of all the attention and discussion surrounding PLM, the business issues that it addresses remain unclear, as do the factors that executives should consider when evaluating their need for PLM solutions. As a result, few corporate endeavors today are as challenging and vexing as PLM. PLM initiatives often suffer from lack of structure, consistency and sense of completion. Also, PLM success relies heavily on having leaders of major functional areas aligned and synchronized with the objectives and priorities of the companys product management functionyet they rarely are. The result can be an inefficient and costly process, or worse, poor product delivery to the market.
MAPPING THE PATH TO SUCCESS

process on track and holding to original commitments? Are our resource plans for project support still valid and accurate? What are our capabilities to absorb more work? Do we have visibility to select and de-select projects and to continue funding products that exhibit the most promise? How long does it take us to introduce innovation into the market, and where can we improve the process? Product Quality Are our products aligned with the demands of our customers and consumers? Do our customers, consumers and regulators consider our products environmentally friendly or green? Are we effectively regulatory lings? managing

So what are CPG executives to do? The answer lies in understanding what changes to business processes, data, people and technology are needed to improve and fortify the PLM function. Addressing the following questions is a start: Portfolio/Project Management Is our organization working on projects that will generate the greatest returns and have the highest likelihood of success? Are the projects that are moving through our formal approval

BearingPoints Perspectives series regularly provides views and insights to help readers navigate and succeed in the world of business technology.

Few corporate endeavors today are as challenging and vexing as PLM. PLM initiatives often suffer from a lack of structure, inconsistencies, and no real sense of completion. In this backdrop, the path toward improving and fortifying the PLM function is elemental starting with an understanding of what changes are needed in business process, data, people and technology.

Material Planning and Procurement Are we capturing the global components we need for manufacturing, and are we leveraging our global procurement capabilities and buying abilities early enough in our new product development and rollout process? Do we understand the implications of controlled, regulated and hazardous materials in our products? Can we trace the source of the raw materials making up our recipes from end to end? Manufacturing and Production Do we know the downstream implications of our new products on the supply chain? Will manufacturing be prepared to run at reliable rates when the product is launched? Product Safety Do we understand what restrictions there may be on the use of components making up our recipes by country, and are we in compliance?

GETTING STARTED CLEANSE YOUR DATA

The preceding questions logically lead to another: How do we accomplish all of this? Cleansing your data is a critical rst step. Here are several suggestions: Organize basic data accurately and conrm that it is readily available and applicable to the product development process. Structure product specifications to include all aspects of the product, from formulas, raw materials and packaging to nished product descriptions. These specications drive the bill of materials required to produce the product and should include product claims, cost estimates, and safety and regulatory aspects. Combine into your recipe the formula input and output specications with the process steps and equipment necessary to make and package the product. Dene your recipes to countryspecic and production-line differences. Specications and recipes must be associated with a product and routed for approval and through milestones during development. Once the data is cleansed and identied, consider software that can deliver

data accurately with good accessibility. Many software vendors offer stable, reliable solutions. Consider the benets of a PLM solution that integrates with your manufacturing, procurement and marketing systems. This will minimize interfaces and risk. It will also provide a holistic view of your extended supply chain.
DEFINING PROCESSES, ALIGNING CULTURE FOR SPEED-TO-MARKET

Process change also includes an understanding of how to lead your innovation and development efforts. The most difficult aspect is changing your corporate culture to align with your PLM vision. The best computer software, perfectly implemented, will not create competitive advantage without the people in your organization embracing the process. Software cannot police the processpeople will nd ways to circumvent the system. However, the requisite cultural change can be assisted by technology. The key to success is ensuring that: The software is easy to use. All process changes are clearly communicated. All requests for assistance are responded to promptly. As regulations and litigation escalate and competitors reverse-engineer your products, being first-to-market is a must if you want to reap the majority of margin. A clear PLM strategy can provide you with speed-to-market, competitive advantage and higher prots.

As regulations and litigation escalate and competitors reverseengineer your products, being rst-to-market is a must if you want to reap the majority of margin. A clear PLM strategy can provide you with speed-tomarket, competitive advantage and higher prots.

Accurate data, however, is not enough. You also need to focus resources on well-structured product innovation and development processes. This means having disciplined project management and formal approval mechanisms. The implementation of change management processes moving from exible changes early in development to rigorous change control for products in development is another step, and it requires executive support and a vision for how your company should compete. Furthermore, all development projects must undergo strict evaluation, and bad projects must be discontinued as early as possible to reallocate resources to more protable activities.

ANOTHER STEP CLOSER TO ENTERPRISE TRANSFORMATION

directions for near- and mid-term corporate strategies.


BUSINESS AND SYSTEMS ALIGNED. BUSINESS EMPOWERED.

We observed several important trends in 2003, including investigation of standardized PLM processes and review of key PLM areas, such as data management, intellectual capital management, safety, and regulatory standardization. While many CPG organizations considered these areas, they have not translated the concept into actual enterprise transformation, much less implemented substantive programs. In 2004, we believe that CPG companies will begin to develop programs in at least one of these areas. The rationale and impetus for action will eventually separate laggards from adopters. Also, CPG leaders will begin to incorporate the qualifying questions presented in this article into their strategic

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