Mastering Innovation: Mark Fera, Accenture Consumer Goods & Services

Consumers have adjusted to the downturn, spending less and buying more value-focused products. Yet, many consumer packaged goods (CPG) companies have not. They are under-utilizing a capability that can enable success in the era of thrift. Here, Mark Fera, Accenture Consumer Goods & Services (www.accenture.com), outlines why PLM is a must in today's economy.

You recently conducted a survey that explores the state of PLM. Can you share some of the survey's most compelling findings?

Fera: According to the survey, conducted by Accenture, the Grocery Manufacturers Association and Information Resources Inc., most new products fail as a result of not meeting consumer needs or offering a unique value proposition to the consumer.

Despite today's challenges, the findings suggest CPG companies can increase their ability to give consumers what they want by approaching product lifecycle management (PLM) more strategically. PLM is not a software tool and not simply research and development. Product lifecycles are governed primarily by the marketing organization and incorporate shopper insights, innovation, commercialization and careful management of the portfolio of products in the market all the way through the retirement of under-performing products. Yes, PLM is all that in addition to traditional R&D.

What actions can CPG companies take today to truly embrace PLM?

Fera: Industry high performers are already making great headway by embracing this view, which involves taking five actions:

• Apply insights from the local market level to all stages of the product lifecycle, including commercialization, retail assortment planning, etc.
• Bolster innovation by going outside the four walls of the organization to generate and execute product ideas that fulfill or create market demand. Only 14 percent of survey respondents have a good process for capturing ideas from outside their company.
• Make PLM processes more collaborative to get products to market on time. While 91 percent of respondents stated have accountability within each function for developed products, only 26 percent said processes are well-understood by employees across the different business functions. This silo effect causes a lag in time to market.
• Use advanced analytics to constantly measure and optimize product portfolio performance; retiring under-performing products and accelerating those that are unique.
• Employ IT systems and data analytics to increase the efficiency and effectiveness of core processes and decisions. The survey showed CPG companies are directing PLM IT investments into analytics and business intelligence to gain an advantage.

What are the benefits for those companies that get PLM right?

Fera: PLM is essential no matter the market. Those that strategically use PLM will deliver products enticing enough to have consumers open their pocketbooks; produce and distribute them more efficiently to reduce operating costs; generate higher profits; and deliver high performance despite market changes.