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PLM For Apparel PDF
PLM For Apparel PDF
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n the 10 years since the first joint survey between Apparel and AMR
Research (later Gartner), the percent of respondents reporting hav-
ABOUT THE SURVEY ing invested $500,000 or more in PLM technology has grown a
Apparel magazine and Gartner’s 10th annual remarkable 92 percent, from 24 percent to 46 percent of respondents.
survey of the apparel industry’s adoption and Expectations for return on investment have grown as well. In parallel,
use of Product Lifecycle Management (PLM) both driving the growth and being driven by apparel users’ functional
technology provides the industry an requirements, software has evolved from product data management
opportunity to look back over a decade of
(PDM) functionality to product lifecycle management (PLM) function-
development and a decade of progress in
ality, and is now wavering at the border between PLM and Product
designing the PLM discipline and implementing
Innovation Platforms, defined by Gartner as next-generation informa-
supporting technologies. In this time, PLM has
tion technology platforms that facilitate continuous creativity, yielding
definitively moved from its traditional bailiwick
improvements to products, product portfolios, and multiple related
of product design teams to take a much larger
supply chain processes throughout their various life cycles. Over time,
role as a process and technology backbone for
this next stage of evolution will drive a new round of investments in
retail, footwear, and apparel supply chain,
second only to ERP in terms of business PLM processes, technology and business talent.
criticality in many companies. Apparel companies today believe PLM evolution will be driven by
The survey was conducted in March 2015 to factors such as the desire to standardize an expanding list of PLM activ-
seek out industry participants’ opinions on the ities across multiple channels and geographies, reducing time-to-mar-
latest PLM investments, future spending plans, ket, improving product quality, and generating better designs. Lower
and strategic objectives being set by process product costs, which ranked as the No. 2 expected business benefit in
and technology leaders in apparel, footwear, 2006, now ranks fifth. Apparel companies continue to watch costs
accessories and home fashions. We offer our closely, but with many costs squeezed out of supply chains over the
sincere thanks to the 51 companies that years and the pursuit of low-cost manufacturing above all other busi-
participated and shared information about ness goals coming under critical scrutiny, this is not the competitive dif-
their PLM plans and initiatives; without your ferentiator that it was a decade ago. As noted in our 2014 report, PLM
participation, making this study available technology providers will be asked to provide the functionality to sup-
through Apparel would not be possible. port the orchestrated processes that apparel companies are building to
This year, 43 percent of survey respondents drive value. This, along with the interest in business intelligence and
were manufacturers; 35 percent were analytics to make intelligent tradeoff decisions throughout a product’s
vertically-integrated companies that design life, the appeal of using social and mobile technologies, and the attrac-
and sell apparel and other products directly to tion of cloud-based deployments, will drive functional progression.
consumers through their own retail channels; This year’s portion of survey respondents with plans to make further
and 22 percent were retailers that sell investments in PLM technology rebounded to 63 percent from 50 per-
branded apparel merchandise or a blend of cent in 2014. Among companies planning to make future investments,
branded and private-label merchandise. Of the portion expecting to invest $500,000 or more jumped to 41 percent
the 48 companies that indicated an annual after dropping to 21 percent last year. While companies are planning to
revenue range, 10 percent had annual sales of
make further investments, the likelihood of those investments happen-
more than $5 billion, 31 percent had annual
ing in the next 18 months dropped slightly from 52 percent to 43 per-
sales of $1 billion to $5 billion, 36 percent had
cent. For those investing over the next 18 months, 56 percent are plan-
sales revenues of $100 million to $1 billion,
ning to add customized capabilities and 36 percent plan to roll out
and 23 percent had sales revenues of $100
additional software modules alongside their installed PLM functionali-
million or less.
ty. For the second year in a row, the top-ranked benefit that apparel
This report is meant to be a useful
and fashion companies hope to achieve from investments in PLM strate-
benchmarking and research tool to help guide
your company’s thinking about the current gies and technologies is the standardization of processes.
state of your PLM process and discipline, Still emerging is the next role that PLM will play as a true competi-
compare your investments to date and how tive differentiator; just 18 percent of companies describe PLM’s role in
they measure up to your industry peers, assess their businesses today as a differentiator, and another 16 percent as
your PLM maturity and map your path to the being embedded within their end-to-end supply chain processes. Given
next level of PLM maturity. We welcome your the scale of investment to date, the planned investments, and the
suggestions and feedback for the kinds of hoped-for benefits and returns on those investments, there is a lot of
data you would like to see collected and opportunity for executive and supply chain leaders to leverage PLM for
presented in next year’s survey. a much broader set of benefits.4
13
• Order-to-shipment: For example, the creation of the pur-
chase order, visibility to manufacturing status, creation of
2015 SNAPSHOT AND EVOLUTION
the outbound delivery notice or ASN, creation of shipping
Defining the Scope of PLM documentation, traceability to the dock and invoicing the
One of the greatest challenges in tackling PLM within the (B2B) customer.
apparel industry is that getting a consistent definition for what • Shipment-to-cash: For example, visibility to the location of the
companies include in the scope of PLM is difficult, if not impossi- shipment and import status, distribution of product to ware-
ble, yet essential for getting PLM initiatives right. For the purpos- houses or stores, allocation to channels or stores and visibility
es of this research, Gartner defines PLM as a discipline for guid- to merchandise, inventory and operations execution (MIOE).
ing products and product portfolios from ideas through retire- Gartner takes the position that, at this time, a PLM for RFA
ment to create the most value for businesses, their partners and application and processes must support the design-to-order
their customers. PLM applications have traditionally been focused span of activities. Company definitions of the scope of PLM, and
on the subset of PLM activities that occur from ideation capture PLM applications offered by vendors, may also cover a range of
and product data management, and typically conclude at either activities that include order-to-shipment, shipment-to-cash,
tech pack creation or the cutting of the final purchase order, product portfolio management and product phase-out process-
though this is changing. Our survey focuses on how apparel com- es. The important thing is that your company have a shared
panies — whether they be retailers, vertically-integrated retail- scope, definition, and language for PLM as it evaluates initia-
ers, brands, or manufacturers — conduct PLM activities within tives to improve processes and the application of technology.
their companies and use technology to support those activities. Without this, PLM investments are less likely to achieve target
In apparel, more so than other industries, enterprises have benefits and returns-on-investment.
blurred the boundaries between the discipline and the technol-
ogy, resulting in confusion regarding what is and is not a PLM Where Are We Now?
application for these industries. PLM is described by retail, The apparel industry has come a long way in 10 years as
footwear and accessories (RFA) companies in endless combina- measured by investment, deployed technology and benefits
tions to cover process steps in: achieved from that technology. In 2006, just 15 percent of sur-
• Design-to-order: For example, inspiration capture, line plan- vey respondents reported having invested more than $1 million
ning, storyboarding, product specification development, raw so far on their PLM initiatives, and half of respondents had
materials visibility and management and finished goods sourc- spent less than $100,000. In 2015, 33 percent of respondents
ing. May include the creation of the purchase order. said that their companies had spent more than $1 million on
9% 9% 9% 36% 18% 9% 9%
Bill of Materials/
Product Data Management 82% 8% 10%
Collaborative Design/
CAD File Sharing 51% 22% 27%
Merchandise Planning/
Management 45% 35% 20%
Other 2% 2%
The last of these, using big data or business analytics/intelli- costs (21 percent) and better designs (18 percent). Reflecting
gence within the context of PLM, appears to be a sticking point now over what has actually been achieved, we can see that PLM
for apparel companies. In 2012, 30 percent of survey respon- has delivered on standardization of PLM processes (as a means
dents had business intelligence technologies encompassed to manage costs and reduce risk), reduced product develop-
within their PLM initiatives, and in 2015, 25 percent reported ment time, and improved product design (see Figure 3). Faster
having business intelligence within the scope of PLM. time to market and improved product quality are two areas
Meantime, business intelligence and analytics ranked No. 1 as where PLM processes and technologies have not yet met the
the top functionality apparel companies would like to see soft- hoped-for expectations, as we will further explore herein.
ware and services providers add to or enhance within their Indeed, time-to-market remains unchanged for many products.
applications (see Figure 7), with 51 percent of survey respon- The focus on improving planning functions such as costing and
dents. This has been a consistent theme throughout our decade line planning may be a reaction to slow progress on cutting
of research, and yet remains an opportunity for apparel compa- times-to-market; if benefits achieved lag in one area, a natural
nies and PLM technology providers to explore. It may be that reaction is to invest in other areas showing greater promise for
business intelligence, both as a technology and as a role exists faster ROI.
somewhere else, such as within marketing, merchandising, or
demand planning organizations, and needs to be linked to Apparel Companies Will Invest in Planning Functions
product design and development planning and execution within PLM
process more effectively to drive results. It appeared in 2014 that the apparel industry took a bit of a
In our first survey, conducted in 2006, we asked apparel com- breather on PLM investments as companies assessed the next
panies what the primary business benefits were that they hoped round of business opportunities. Simultaneously, the last appar-
to achieve from their PLM implementations. The top three el technology trends survey, conducted in late 2013, showed
answers were: faster time to market (23 percent), lower product that improving new product commercialization and launch and
OPTIMUM.
2014
15% 35% 50% (N=23) 4% 35% 17% 4% 17% 22%
2013
16% 21% 63% (N=37) 3% 26% 18% 13% 18% 21%
2014
15% 35% 50% (N=23) 17% 35% 26% 13% 9%
2013
16% 21% 63% (N=37) 11% 32% 30% 16% 11%
<No <Don’t know <Yes <In the next 6 months <In the next 6 – 12 months
<In the next 12 - 18 months <More than 18 months from now <Don’t know
Figure 6. Primary Benefits of PLM Strategy, Hoped For vs. Achieved, 2015
<Ranked 1st <Ranked 2nd <Ranked 3rd
Other 2%
Accelerate
Develop the right collections and styles more quickly
and satisfy customers sooner.
Collaborate
Bring creative, technical, and commercial skills closer together.
Other 28%
Costing 16%
Bill of Materials/
Product Data Management 8%
more experimentation with center-led models being applied to design, development, and sourcing organizations only. Among
PLM. Cloud/SaaS deployments of PLM technology are one lever apparel manufacturers, the numbers are similar. If anything,
for providing consistent functionality and workflows based on apparel manufacturers are more fixed at the reactive stage of
best practices defined at least loosely by center-led PLM teams. PLM maturity, reflecting the struggle that companies have in
We expect to see a surge of organizational innovation as being both responsive to customer (retailer) needs and con-
apparel companies more clearly define the role of PLM in their sumer preferences, and bringing innovative designs, textiles,
supply chains and then design the organizations needed to and even supply chain services to attract and retain customers
effectively support the chosen strategy. This was the first year in and consumers. Evolving PLM strategies will require bold appar-
our survey that we asked companies to describe the primary el industry participants to create aspirational plans for supply
role PLM plays in their companies. Among retailers, just 17 per- chain leadership that may precede their companies’ abilities to
cent describe PLM as a business differentiator, a startling figure execute on the new organizational design from a cultural, tech-
in light of the growth of private-label activities and the parallel nical, process or talent perspective. The case for doing so will
growth in design, development, sourcing and launch activities become more compelling as companies limit race-to-the-bot-
that retailers must support. Another 22 percent describe PLM as tom cost cutting and increasingly focus on innovation and top-
embedded within their end-to-end supply chain process, and line growth for enterprise success.4
fully 50 percent describe PLM as belonging primarily to product
Materials management
Environmental compliance
Other 4%
22% 12%
24%
11% PLM Links Design/ PLM Develops PLM Links Design/
PLM Develops Development and Expertise, Resources Development and
Expertise, Resources Sourcing Processes and Common Sourcing Processes
and Common Processes
Processes
point), create designs more efficiently, and reduce or manage rently constructed better aligned to be a “lights-on” opera-
product costs. The apparel industry is now showing a greater tional system, more like a manufacturing execution system or a
appetite for taking a critical look at PLM processes and strate- payroll application — essential to business but fundamentally
gies, which, if not exactly broken, may not be the right ones to unglamorous? We hope next year’s survey will tell us more
take companies into an increasingly multi-channel, global, con- about whether the industry wishes to move the PLM discipline
nected, data-driven, and cloud-based PLM future. Will the forward as a differentiator or whether a new generation of
apparel industry increasingly put PLM into the role of a true PLM organizational structures and Product Innovation Platform
competitive differentiator, or is the PLM discipline as it is cur- technologies better represent next year’s big runway success. n