The consumer packaged goods (CPG) industry entered the brave world of product lifecycle management (PLM) during the 2010s, but very few companies were able to get all facets of the processes and technologies correct. Thin budgets, complex formulations and data, quick product releases, and a complex supply chain could all be blamed. Today, PLM is a critical part of preparing for a digital future. CPG companies should assess current challenges for PLM, correct past mistakes, and start planning their digital futures today. This article is the second in a series that will examine why now is the time to simplify, get it right, and be ready for the digital revolution coming in CPG.
To get started, here’s a reminder of the Five Pitfalls of Early Implementations. These have traditionally limited the value and potential that many CPG companies expected from PLM.
- Failure to Focus on Universal Standards - Formulation and process-based productions are complicated, and universal standards for nutrition and food safety can help
- Going Too Big Too Soon - Organizations went for everything too soon instead of easing into new processes and systems
- Building for the Past Instead of the Future - Companies built PLM systems to minimize change to legacy processes instead of building for the future
- Undervaluing the Importance of Reporting - Users never fully embraced the system and continued to work in known ways because PLM was not established as the source of truth and reporting was not automated
- Misplaced Implementation Leadership - Leaders of PLM implementations were in adjacent functions to product development and struggled to recognize quick wins or value from the system
For companies that experienced one or more of the pitfalls above, all is not lost! Now is the time to address the basic challenges that have plagued CPG companies for years and establish a better path for the future.
There are four steps CPG companies can take that will resolve historical pressure points and establish a strong foundation for a fully functioning PLM platform. Companies that follow these steps will develop a system that drives value from organizational improvement including proper ingredient sourcing, formulation, packaging, and finished product specifications.
Step 1: Assess
Take a look at your organization and get feedback from all functions to determine who is using PLM correctly, who likes it, and who loathes it. Note that these opinions might not be mutually exclusive. Make sure you listen and find what works with the system, especially if there are issues around data and reporting.
It is important to highlight and maintain the capabilities that have been providing value to the business. The assessment should focus on changes and areas of opportunity designed to improve the quality of data and benefits to users.
Step 2: Simplify
Reduce burdensome requirements and approvals by focusing on core PLM capabilities and sharing responsibilities across functions to speed approvals and increase adoption. PLM should be the gold standard and the single source for product data. PLM facilitates building a digital thread of product data from the innovation phase all the way to manufacturing and drives metrics for reporting at each stage of the R&D process.
One example of simplifying PLM process is to develop exceptions for line extension approvals versus establishing new product lines. Another example is to focus on establishing a centralized location where critical data, like nutrition facts, can be stored in complete set and managed to a high quality standard.
Step 3: Prepare for the Digital Thread
Based on the outcomes of steps 1 and 2, build a plan that considers the overarching digital strategy of the organization, and prioritizes issues into short-term and long-term fixes. With the right digital plan and accurate data, your organization can begin to build trust in the system. Trust is essential to establishing the PLM system as the known source of truth and curbing reliance on outside reporting. By developing a digital strategy that focuses on the future, PLM can become the backbone of the future digital thread.
Step 4: Expand Towards Value
Based on the assessment of critical needs and the digital strategy, consider expanding PLM to where it will impact the organization the most. Options for expanding PLM may include connecting with a supplier portal (if sourcing is your biggest need) or connecting to an MDM or ERP system (if manufacturing or sales is the biggest concern). Once you have the data correct and the needs mapped out, the necessary implementations for expanded capabilities can be focused, tested, and launched.
A successful PLM system is the backbone of the digital thread for CPG companies, and it is important to trust the PLM system. The entire development and manufacturing functions in an organization should work from and access the PLM system as the single source of truth. Once a PLM system is fully rooted in an organization, it will unlock capabilities including automating claims and compliance, smart connected operations, and visibility to sustainability efforts.
Check out the first article in the series covering the 5 Pitfalls of Early Implementations.
The third article in our series will dive into more detail on these opportunities.