Off and Running with PLM

Gaining increased attention among CG companies in the current economic climate is product lifecycle management (PLM) technology that reduces the time and cost it takes to bring a product to market. Indeed, according to a study by AMR Research, CG companies are showing "intense interest" in PLM solutions, even while the implementation of other IT tools has reportedly "ground to a halt" in many industries. The study notes, "Product lifecycle management has finally emerged as the de facto category title of choice, and it appears ready to develop into a major market."

So how does PLM technology help CG companies manage the product-introduction process, beat the competition and add profits to the bottom line? And what are the risks and rewards of implementing product lifecycle management systems?

Balancing Costs and Benefits

In the three decades since CEO Jim Davis bought the company on the day of the 1972 Boston Marathon, New Balance Athletic Shoe has achieved an international reputation. Today this manufacturer is known for innovative new products and a wide range of available sizes. In addition, the firm is legendary for its commitment to domestic manufacturing.

But these factors -- domestic manufacturing, a wide product range and a focus on developing innovative new products -- make it necessary for New Balance to control costs while sprinting ahead in a competitive marketplace that includes Adidas, Reebok and Nike.

Privately held and based in Boston, New Balance is a leading manufacturer of athletic shoes for running, walking, cross training, basketball and tennis. The company also markets work boots, hiking boots, sandals and boat shoes through its Dunham Bootmakers division. New Balance employs more than 2,400 people, and its worldwide sales for 2001 reached $1.16 billion.

Last October, the company began implementing product lifecycle management products from MatrixOne, a leading provider of collaborative PLM solutions. The PLM deployment supports New Balance's corporate goal: to continue to grow its products, brands and market penetration worldwide.

Paul Heffernan, executive vice president of marketing, design and development for New Balance, explains the move: "As our company becomes increasingly global, we are accumulating an increased volume of information and processes that need to be accessed and managed." PLM, he says, "will help us better manage our product development process, which will enable us to meet one of our most critical corporate goals: reducing time to market."

Tim Barr, technical development manager, elaborates. "We've implemented PLM for three main reasons," he reports. "First, our company has experienced significant growth in the last eight years, and because this growth has brought an increase in data, we need a central repository of information for good clean decision-making. Second, reducing time to market is vital in the consumer products industry, and we need to quickly respond to shifts in the marketplace. And third, we need to enhance collaboration both domestically and internationally -- for example, to modify prototypes as needed, during our decision-making and design processes."

Barr notes that the MatrixOne solutions are sufficiently flexible for New Balance to take control of doing its own coding, and to add new functionality as needed. And according to Bill Armelin, business systems project leader, the fact that MatrixOne provides a Web-based system "became a key point of differentiation during the selection process." He explains, "Work can be done on a Web browser, and the data repository is housed at a secured internal site."

Careful Planning

New Balance is deploying MatrixOne's eMatrix Collaboration Platform and two Value Chain Portfolio applications: Program Central and Engineering Central. MatrixOne Program Central is a unified environment for coordinating multiple, large-scale programs. MatrixOne Engineering Central will enable New Balance's global product development teams, including suppliers and partners, to develop, share and manage technical product information and processes from a common information repository across the entire product lifecycle.

New Balance has carefully planned its PLM deployment. Barr says, "We spent considerable time mapping our product development processes in great detail, working with our user community to define what we do today and how to do it better in the future." He continues, "We also visited six or eight companies that have implementations in place or that are implementing PLM systems. This gave us better visibility into the issues we'd face, as well as a better idea of things to watch out for."

But even the best-laid plans must be revised. Armelin notes that New Balance "mapped out a three-year plan for our PLM program." But he acknowledges, "This has changed already," and adds, "Our plan now changes almost daily."

Barr stresses that the new technology is supplemental to his company's already efficient people and processes.

"We don't have a broken system at New Balance," he emphasizes. "When fully implemented, the PLM solutions will provide better tools to help our talented people better apply their knowledge and enhance productivity." For example, he notes that with the PLM system in place, engineers will have information more readily available to them, and will not need to spend time searching for data they require. Asked about the pitfalls of being an early adaptor of PLM technology, Armelin points out, "We don't consider ourselves an early adaptor. All of our major competitors are deploying PLM, and they're all at about the same point as New Balance."

Instead, the biggest dilemma, Armelin says, involves the fact that "We make product in the U.S. and import from overseas. We need to get the system to handle multiple ways of sourcing product."

Barr adds that the implementation may be a challenge for the company's user community. "It represents a big transition," he acknowledges.

Program Benefits

The rollout of the program is now underway. Upon deployment, 500 users in multiple locations globally will collaborate on four brands.

Barr says New Balance intends to apply PLM to product development from initial concept through introduction. This is expected to facilitate better project tracking, prototype tracking and information sharing. "We'll take one to two months -- and in some cases, even more -- out of the product development process."

Asked what advice he'd give CG execs considering PLM, Barr suggests, "You need to see this as a very big project. Don't take it lightly."

Armelin agrees, and sums up the scope of the PLM project this way: "We've realized this is just as big as our ERP implementation."