Why PLM? Visual representation of Product Lifecycle Management for ROIC.
Welcome back to the second part of this series on Product Lifecycle Management (PLM).
This time, let’s dig into how PLM contributes to ROIC (Return on Invested Capital) — not just as a system, but as a strategic management approach that shapes how your business creates value. Understanding Why PLM is essential in this context.
To better understand ROIC, please refer to the overview below.
ROIC-Driven Management to Enhance Business Value
When you connect PLM-related KPIs to the ROIC tree, one realization stands out:
PLM isn’t just about managing product data — it’s a strategic engine for business performance.
In its broader meaning, PLM is about managing the entire product lifecycle — from concept and design to manufacturing, sales, and disposal — as one integrated value creation process.
By doing so, PLM helps improve the key drivers of ROIC:
For industries like automotive, where compliance and quality standards grow stricter every year, PLM has become a critical enabler of competitiveness and innovation.
If you want to boost ROIC, focus on the early stages — product development and pre-production.
That’s where PLM has the biggest impact.
By tracking the right KPIs in these phases and turning insights into action, companies can shorten development lead time and get products to market faster, at the right cost and quality.
The earlier PLM is applied, the bigger the business payoff.
PLM only works when everyone’s involved.
Ownership doesn’t sit with one team or department — it’s an enterprise-wide challenge that connects engineering, production, procurement, quality, and even finance.
In the past, teams often worked in silos, optimizing their own processes. But markets move fast now, and companies must respond to customer needs in real time.
That means market changes, design changes, and production changes all need to flow smoothly across the organization.
PLM enables exactly that — breaking down organizational walls and building one connected value chain.
Here’s a key success factor that often gets overlooked: defining KPI ownership.
A KPI owner isn’t just someone who measures results — they’re responsible for driving improvement.
Here are a few simple but powerful guidelines:
When responsibility is structured this way — aligned with the ROIC framework — PLM becomes far more effective and actionable across the enterprise.
Next time, we’ll look at how SAP adds value to PLM from a business perspective — stay tuned!
References:
You may also find the following articles helpful:
Overview of PLM
What Is PLM? Understanding Product Lifecycle Management
How PLM Contributes to Business Performance
Why PLM Enhances ROIC for Better Business Outcomes
Parts of this article were developed with reference to generative AI suggestions and were reviewed, refined, and supplemented based on the author’s professional expertise and judgment.
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