As competition increases within various manufacturing industries, the time taken to develop a product and bring it to market has become a key metric for progressive manufacturers. Minimizing this time, while maintaining quality and fostering innovation, is the latest challenge in today’s manufacturing industry. In 2007, we can expect a lot of product-driven investment in IT – this is making an interesting balance act for manufacturing businesses.
Manufacturers to spend $4.1 billion on PLM by 2012
Product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception, through design and manufacture to service and disposal. PLM software tools are used primarily by industrial manufacturing companies to document and support the complete life cycle of their products and to devise and manage ancillary services, such as product maintenance.
By 2012, the worldwide market for PLM software (excluding maintenance) is expected to reach $4.1 billion in the manufacturing industry. This represents strong growth on 2006 revenues of $1.9 billion. Growth will be driven primarily by large enterprises, although the mid-market sector is beginning to demonstrate stronger growth in uptake.
Datamonitor’s PLM software forecast model also assesses the investment in PLM within 16 individual manufacturing industries. Currently, the automotive, high-tech and electronic, and aerospace & defense markets are leading the way.
Many manufacturers will turn to PLM technology to help alleviate their product-oriented dilemmas as the range of functionality and supported workflows and processes increases. Integration with other key enterprise applications such as enterprise resource planning will be an essential component of PLM technology moving forward. Linking with supplier relationship management and manufacturing execution systems applications is also growing in popularity.
Changes are afoot in the PLM market
Vendors such as Dassault Systemes, UGS (which is now a part of Siemens Automation & Drives), PTC, Agile and SAP all stand to gain from a rapidly growing market. Industry expertise and regional distribution are still key elements of investment decisions within manufacturing companies, as is the use of xCAD systems, which a PLM investment will seek to manage. Services vendors such as IBM and HP are also well placed to drive revenues in the PLM market as manufacturers look for a variety of services to assist in business process management and cross-border implementation.
2007 looks set to be a blockbuster year for industry observers, with consolidation already underway. Recent M&A activity has seen MatrixOne fall into the hands of Dassault Systemes (in March 2006) and UGS acquired by Siemens Automation and Drives (in January 2007). This year is likely to see more of the same activity as the larger enterprise applications vendors such as Oracle, Infor and Lawson look to solidify their own PLM solutions, and established players divert more attention to the mid-market.
While product development has always been the mainstay of manufacturing companies, there’s a real transformation occurring in the market that’s seeing a lot more importance given to the area. What it all adds up to is that manufacturing companies are poised to both cut product development-related costs and introduce more innovative, successful products. Functionality, core integration capabilities, process and workflow support, and thought-leadership will determine which of the myriad of vendors will be the most successful in helping manufacturers reach their product lifecycle goals.
