A recent Deloitte Research study titled "Mastering
Innovation" reveals telling results:
While most manufacturers accept innovation
as the engine of growth, restructuring operations
to profitably bring new products and services
to market appears near the bottom of many manufacturers' priority
lists. Only a handful of the 650 companies
analyzed were able to master this innovation
paradox, but the few that did enjoyed profit
levels up to 73% higher than their peer group.
Even more revealing is the fact that executives
expect new product revenue as a share of total
sales to increase to 34% in 2007, compared
to 21% in 1998.
Innovation, however, is more than simply
introducing new products to market. Launching
new products and services is just one step
in the journey toward institutionalizing innovation
across the entire product life cycle.
The acceleration of a product from concept
to launch must be supplemented by an enhanced
ability to track the product's progress
for the length of its life cycle. This is where
product lifecycle management (PLM) comes in.
PLM is first a business strategy and only
then an application. The application is merely
the enabler of the "institutionalization" of
the process that manages a product from its
inception to engineering, manufacturing, and
finally to after-sales service. Many different
departments are involved across a product's
complete life cycle, and they all need to be
working from the same information. How efficiently
this is done makes all the difference in attaining
profitable, accelerated innovation.
The innovation process requires the coming
together of design experts, manufacturing personnel,
quality experts, maintenance engineers, and
other stakeholders across departments that
manage material requirements, cost, sales,
and marketing. SAP's PLM applications,
collectively deemed mySAP PLM, enable such
systematic collaboration rapidly, efficiently,
and repeatedly — within and outside the
boundaries of an organization, and all across
the product life cycle.
mySAP PLM is the only solution that enables
product management across the three major interacting
lifecycle processes: product definition, lifecycle
data management, and operational services.
Product definition includes collaborative design — across
different teams and around the world. Lifecycle
data management includes collaboration and
management of design, engineering, and manufacturing
data related to the bill of materials to enable
efficient manufacturing. Operational services
enable adherence to compliance laws and regulations,
as well as integration into other business
Innovating in parts is a flawed strategy,
and therefore innovation must be institutionalized
across the entire product life cycle. This
requires a holistic PLM solution capable of
working in tandem with other business applications — precisely
what mySAP PLM enables.
Senior Vice President,
Extended Supply Chain Management,