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How to plan for a pain-free PLM implementation
Clothing companies can reap rich rewards from using a product lifecycle management (PLM) system, writes Jonathan Dyson. And major advances in the software’s capabilities now make it the core data hub that brings together planning, design, sourcing, production, logistics and replenishment
Today, PLM should be a seamless part of an enterprise platform that incorporates a wealth of information and services, spanning product and material creation, as well as compliance testing, assessing vendor capabilities and capacity, material positioning, production WIP (work in progress), quality control and finished goods distribution.
Mark Burstein, president of US-based NGC Software, says PLM platforms are “far more powerful” than in the past, “and the scope of PLM has expanded exponentially.”
Peter Leith, vice president of operations at iSync Solutions, adds that PLM systems have become an integral component for apparel brands to reduce errors and inefficiencies, while increasing visibility and communication. PLM solutions have improved considerably as available technical software tools underpinning their development have become more powerful.
Clayton Parker, director, PLM product management at another American company, Gerber Technology, stresses how PLM applications have grown in scope well beyond their initial tech pack management functions and have now become the core data hub for most apparel companies. “Five years ago people were just looking at PLM + ERP [enterprise resource planning]. Now it’s PLM + 3D Design + Pattern Design + Digital Artwork Design + Colour Development + any other 3rd party solution.”
“Five years ago people were just looking at PLM + ERP. Now it’s PLM + 3D Design + Pattern Design + Digital Artwork Design + Colour Development + any other 3rd party solution” – Clayton Parker, Gerber Technology
Burstein adds that a significant number of new applications can now work with PLM to manage critical parts of the value chain. “For example, vendor management can streamline vendor onboarding and ongoing management, since all necessary documentation – standards of vendor engagement, compliance documents, certifications, audit results and more – reside in a central location that’s instantly accessible.”
This allows brands and retailers to make more intelligent sourcing decisions from their PLM application, he explains.
Quality management is another example. New applications can help ensure the right level of quality and risk mitigation as products move from the design phase of PLM into production. Bringing quality control into an enterprise platform will also help companies identify problems sooner, reducing the risk of cancellations, chargebacks and returns while protecting a brand’s reputation.
Leith adds that 3D modelling is another element that can today be integrated with PLM, noting this “is something that was not really possible for mid-sized businesses five years ago.”
Parker explains that another key factor in PLM’s advances is cloud software. “Having your PLM solution run through the cloud makes getting it up-and-running so much faster than it used to be. Five years ago, with on-premise PLM solutions it would take weeks or months for hardware to arrive and then IT to do all of their initial work before you could even have a PLM application installed. Today, it’s almost instantaneous.”
The cloud also allows PLM software to be updated far more often. “Historically on-premise PLM solutions saw one, maybe two releases a year,” says Parker. Most companies would wait years before upgrading to the next version. Now with cloud PLM, enhancements and fixes can be deployed every few weeks. This means as customers’ business needs evolve, PLM solutions can keep up with those changes, something that is “an extremely difficult process for most on-premise PLM solutions.”
Parker adds that a cloud PLM solution greatly reduces the burden put on an apparel company that might not have a large IT structure. With cloud PLM, all back-end work is set up, maintained and updated by a PLM supplier.
Return on investment
The affordability and ROI (return on investment) of PLM systems have also advanced greatly for clothing manufacturers.
“Thanks to SaaS [software as a subscription] PLM has become much, much more affordable for apparel companies of any size to adopt,” says the Gerber Technology director. He adds that cloud subscriptions are especially beneficial. “A company of any size can now access and quickly start seeing the benefits within their organisations thanks to affordable cloud subscriptions.”
However, Leith warns that implementation costs can still be high, with related fees on average 1.5 to three times the initial quotation, due to cost overruns. He advises apparel companies to insist on a fixed cost implementation fee as this will affect the ROI.
“Most systems have an ongoing cost of around US$150-200 per user/per month, which should cover quarterly software upgrades and all phone, remote support, hosting and data,” he explains. An implementation fee budget for a small company (five to ten users) is around US$30,000 and mid-sized (15 to 40 users) should be between US$40,000 toUS$80,000. “PLM systems that are coming in higher than this don’t offer a great ROI.”
That said, quantifying ROI is a challenge, but any company that is grossing more than US$8m per annum in sales should be looking to implement a PLM system if they do not have one already.
“Any company grossing more than US$8m per annum in sales should be looking to implement a PLM system if they do not have one already”
Cost savings is one easy calculation because a company can assess chargebacks from retailers for late deliveries and quality issues. As an example, if turnover is US$8m and a company spends 1% on chargebacks for discounts due to late deliveries and quality issues “then you have up to US$80,000 p/a that you could be saving by implementing a PLM solution.”
And that is just the starting point, because with PLM you get quicker pre-production turnaround times, reduced time to market, increased efficiencies, reduction in errors and re-work (incorrect garment specifications) and less waste. All of this adds to the ROI.
Burstein also points to significant ROI potential. His company has seen clients increase workforce efficiency 25% to 40%, shorten cycle time by 50% or more, reduce cost of goods sold up to 10%, improve outgoing quality levels to almost 100%, and most importantly, reduce markdowns and stockouts by 30% or more.
Leith adds that implementing PLM in the pre-production process has the fastest ROI in a typical PLM implementation. “Traditionally these areas are managed wholly in Excel and are extremely manual. PLM improves the accuracy and turnaround in the beginning stages of a style’s lifecycle, which has a major impact in the downstream production time and overall speed to market.”
Real time visibility of all styles in process with the Style Folder in YuniquePLM V8
Central hub
However, to fully exploit all the benefits that PLM can provide today, experts stress that clothing manufacturers must set it up within their business as a central hub that can connect to each aspect of the operation.
Burstein says to take full advantage of PLM, it should be incorporated into a digital, enterprise platform that breaks down organisational silos and enables faster decision-making by bringing together planning, design, sourcing, production, logistics and replenishment into a single, connected ecosystem.
This provides a single platform that spans product and material creation, factory capabilities and capacity, material positioning, vendor management and onboarding, production WIP and quality control, finished goods distribution, and more.
Also, Leith argues the best approach is having a fully integrated PLM and ERP solution. “If you are happy with your existing ERP, then a bolt-on PLM solution could be a suitable option.”
However, a fully integrated ERP and PLM solution is going to give the business a much higher level of efficiency, visibility and improvement. “This is because having access to fabrics and trimming inventory, product inventory, production schedules, sales and purchase orders allows you to make more informed decisions in the design and pre-production stages.”
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