Yesterday, I was mapping out a PLM implementation for a food manufacturer. With the VP of R&D, we defined the traditional new innovation, line extension, plant localization, cost improvement and general change request processes. As I was leaving, the President pulled me aside. Within 18 months, the company is planning to enter a new sales channel and several new categories. To execute this strategy, they would be acquiring at least one company and introduce copacking to minimize CAPEX requirements. I provided a high-level overview of our proposed processes and the ability to support their strategic needs. If the recent KPMG study is accurate, 75% of you will be looking to increase your partnerships.
Other than reduced cost or CAPEX requirements, many of you have resource gaps, and may struggle to meet emerging customer or market mandates. These articles on a quality agreement and remaining relevant highlight how partnering and M&A can extend your internal innovation and development capabilities.
If your strategy depends on increased partnerships or M&A, are your PLM processes capable of supporting your strategy? An effective M&A assimilation design needs to build into your PLM configuration. I have worked with several companies that aggressively acquire or spin off companies and brands. One company averaged a new acquisition every 18 months and could assimilate >$100M companies in less than 6 months. Within this time period, they would rationalize all critical or high volume materials and could make most formula in multiple plants. As a public company, they usually projected cost savings to be achieved within 2 years, and often delivered most of the savings within a year.
Effective Partnerships need to integrate your partners into your processes. Extending your processes using Partner portals is an effective method and the impact on your PLM solution can be minimized. Leading companies will have multiple touch-points:
Many of you, if not most, need to design your processes to support partnerships, assimilate acquisitions or snip-offs. As part of PLM multi-generational planning, you should start to evolve your capabilities. Plugging in Systems of Engagements type solutions can minimize the impact on your PLM solution. A recent post provides a strategic view of the future of Systems of Engagements. Most of you can get started, incrementally implement it and evolve into this vision.
Over the next few weeks, I will continue to share my PLM Odyssey, “better practices” and business strategies for agile innovation and compliance strategies. No two process companies or PLM implementations are ever the same, but many are remarkably similar. Stay tuned to find out how you might benefit from the PLM journey of others.