Does this submarine make my Boeing 767 look fat?
When was the last time Boeing changed the color of their planes because yellow was really, really hot? And then changed it again 4 weeks later because yellow was now the kiss of death for selling airplanes?
How often does General Motors introduce a completely new line of cars? And have a 50% off sale on inventory that is over 8 weeks old?
Is anyone agonizing over how to better merchandise the new self driving car to drive additional sales of submarines?
These questions are worth pondering for retailers considering the next great technology leap to increase sales and improve profits through private label and proprietary brands. In an almost lemming’s type rush towards a PLM solution, they may be overlooking some very basic facts to weigh in their selection process.
For highly engineered products such as airplanes, cars, and even submarines, your standard PLM software is great. For the companies we affectionately call the Triplets (Dassault, Seimens and PTC) the primary focus (and 92% to 97% of their revenue) is on discrete manufacturers. Manufacturers with lengthy design cycles of eight months to ten years that involve hundreds and even thousands of parts and subassemblies. In their world a three year production run can be a whopping 360 units.
In short (probably not possible at this point), the majority of customers serviced by the Triplets are not coordinating the delivery of 7000 to 100,000 or more SKUs from around the world that must arrive on the sales floor in multiple flows that are constantly being adjusted to meet consumer demand. A demand that is often measured in terms of weeks, not months or years. And where the whole process – from concept to consumer – can be repeated up to 16 times a year.
That is the retail world where merchandising is key and new lines of products are introduced mid season. The seeming chaos and emotion of retail is in direct conflict with the methodical, logical Mr. Spock approach of the discrete manufacturer. In retail, the sudden death knell of yellow as a key color can throw off the visual presentation – and sales – of an entire category of goods. Obsolescence and disposability reign supreme.
For retailers, product design and development don’t occur in a vacuum. Because it all happens so quickly, sourcing, supplier management, production tracking, and order management are part and parcel of the design process. Robust profiling of far flung suppliers to understand capacity, performance and capabilities as well as social, legal and ethical factory and product compliance must also be built into the design process. Having 8 to 14 systems to accomplish all of this can no longer be the norm. Each integration point introduces risk and implementation uncertainty.
Which is why we at TradeStone believe that PLM for retail is much broader than just the product design and testing. And because retailers are merchants and live and breathe the word MERCHANDISE, we have redefined the PLM requirement as Merchandise Lifecycle Management, or MLM. MLM offers the retailers one holistic infrastructure that unifies design, specification, sourcing, sampling, testing, order management, production, delivery and payment. It can be deployed in chunks as best of breed or as system of record. And whenever we speak to execs in the retail industry about MLM, they get it – immediately. They understand the difference and embrace it.
We must be doing something right. Recently we heard that one of our competitors (yes, a Triplet) was very unhappy with us, complaining that TradeStone was confusing the market with all of our talk about MLM. The confusion certainly isn’t on the side of the retailers, who refuse to accept their narrow PLM definition that attempts to shoe horn an end to end retail process into a very narrowly defined technology that does a great job at designing planes, cars and submarines. However, we will try one more time to help our dearly beloved competitor understand the difference by quoting directly from our respective boiler plate descriptions of what we do:
(Unnamed Triplet) provides discrete manufacturers with software and services to meet the globalization, time-to-market and operational efficiency objectives of product development.
TradeStone Software helps retailers, brand manufacturers and suppliers increase market share and improve margins through the use of Merchandise Lifecycle Management solutions that unify the design, sourcing, ordering and delivery of their private label and branded goods.