Software enables communications among departments like sales, R&D and production.

Software enables communications among departments like sales, R&D and production.

If there's one sure thing in the software industry, it is that the phrases used to identify product segments are just as confusing as the names of the products. The phrase Product Life Cycle Management (PLM) doesn't provide much of an insight into what this software actually does.

Of course, there is precedent for the obfuscation. Who would guess that Enterprise Resource Planning (ERP) would have much to do with counting the cash or taking orders? PLM helps manage the life cycle of a product from idea to formulation, to testing, to production, to changes, to retirement. The focus of many of these products is R&D and the direct interaction with sourcing and production.

This emerging class of software may have important implications for the food industry. PLM software emerged in the late 1990s in response to an increasing need to more carefully manage the process that involves the design, build, and delivery of products.

One of the trends in the food industry is the increasing reliance that branded manufacturers have on suppliers to provide not only ingredient components of a product but increasingly, the entire product. ERP systems were designed to manage operations within the "four walls" of an enterprise. When product development and production are moved outside of the "four walls," most companies find that to keep proper controls in place, their ERP functionality has to be supplanted by other systems. Often these systems are paper based.

One of the factors that has made PLM attractive to the high-tech industry, where there are relatively short product life cycles for technology products, is its ability to increase the communication speed among R&D, sourcing and production. In high-tech, often the time to market exceeds the time the product will be viable in the market with near constant changes in design. The food industry, on the other hand, can have long product life cycles but may have to continually change the product formulation depending on changes in production technology or the price, source, packaging needs or quality of ingredients. Steve Phelan, founder of Formation Systems observes, "Food companies now recognize the benefits of PLM, which are helping them bring new products to market faster, improve quality and lower cost by centralizing control over formulae and specification."

PLM software works by automating the functions and workflow involving product development. The software provides a central, often web-based, repository of information to assist in the communications between internal departments like sales, marketing, R&D and production and also gives external suppliers access to the information they need. Through PLM, all those involved in the product development, procurement and production processes can collaborate.

One of the important features of most PLM systems is the product specification repository. Many food companies struggle to maintain and manage specifications for a number of purposes including: product specifications for sales and marketing; R&D development specifications; production processing parameter specifications; customer specifications for private label products; ingredient specifications and standardization; and label statements.

Food companies including Arla Foods, Rich Products and Kerry Foods have started PLM implementations. Vendors include, ASD, Adaptive Resources, Formation Systems, Honeywell, OSISoft, QSA, SAP, Siemens, and Sopheon.