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The insideEdge (SAPinsider Vol. 7, Iss. 2)

by Sudipta Bhattacharya | SAPinsider

April 1, 2006

by Sudipta Bhattacharya, Senior Vice President, Extended Supply Chain Management, SAP SAPinsider - 2006 (Volume 7), April (Issue 2)

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 applications.

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.

Sudipta Bhattacharya
Senior Vice President,
Extended Supply Chain Management,

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