Nobody said that decoding retail software terminology would be easy. Few retailers truly understand the difference between PLM and SCM. The reason for this goes far beyond similar sounding acronyms: The functions of PLM (product lifecycle management) and SCM (supply chain management) solutions often overlap, so it can be hard to define which functions fall under which umbrella term.
The situation doesn’t lend itself to easy comprehension. But shipping costs will remain abnormally high into the new year, driving inflation. Retail leaders need to understand industry terminology to make the right software decisions to mitigate the costs that they pass on to customers. That’s why, in this article, we’ll break down the functions of PLM and SCM in layman’s terms. We’ll talk about what these solutions do, where they overlap, key differences, and whether one can replace the other.
Let’s get into it.
What is supply chain management (SCM)?
So, what is supply chain management (SCM)? It’s one of the largest industries in the world. The global market for supply chain management solutions is predicted to reach $21.95 billion in 2023. Supply chain management is the process of tracking goods and services throughout your company’s supply chain. It refers to everything from transforming raw materials into a finished product, to your distribution and returns process. SCM is largely focused on production centers and warehouses where physical goods are made, and the people involved in producing those goods.
So what, then, is a supply chain manager? Supply chain managers oversee products throughout their lifecycle. This includes everything from converting raw materials into a finished product to communicating with stakeholders, meeting production and safety requirements to managing warehouse and shipping budgets, and more.
A supply chain manager’s job requires them to have a comprehensive understanding of multiple branches of a business across multiple locations, all at once. No human without superpowers can do this all manually. Supply chain managers are leaning on SCM and PLM solutions to gain the overview and control they need to excel.
What is product lifecycle management (PLM)?
Next up is product lifecycle management (PLM). So, what is product lifecycle management? Product lifecycle management solutions focus on product development, sales, and the people involved in both processes. PLM software helps retailers and suppliers determine what products they want to bring to market, as well as who the best partners are to help them do that. Product lifecycle management offers transparency throughout the buying, designing, developing, sampling, and production phase of retail goods.
Most PLM software gives retailers and suppliers insights into their product lifecycle. PLM solutions help retail teams find product details and collaborate internally. Details such as where a product is in the production process, who did what throughout product development, how many iterations of a product exist, and more are housed in product lifecycle management solutions.
Now, for the caveat. The retail industry requires buyers and sellers to get product images and data from external entities. Simple daily tasks like customizing quotes, posting on eCommerce sites, and finding image attachments can monopolize employee hours on the clock. Since most PLM software isn’t built to serve the retail industry, it lacks the capability to interface with external entities. This means that, despite having PLM software in place, most retail teams still communicate with Excel documents, emails, image attachments, WhatsApp and text messages. Only a retail PLM gives teams the ability to collaborate with internal and external stakeholders… right on product images.
Where PLM and SCM overlap
They don’t just have similar acronyms, many of the functions of PLM and SCM mirror one another. PLM and SCM both focus on product development and distribution. They both provide a comprehensive overview of multiple business branches that enable more accurate reporting and decision making.
Both PLM and SCM are focused on the “who” of a retail operation –– they track which branch or individual completed tasks. They both provide a communication platform that teams can use to collaborate throughout the process. They even both track data throughout the production and distribution phases… but the similarities end there.
Key differences between PLM and SCM
Now let’s get into the nitty gritty. PLM is focused on product development; SCM is focused on the manufacturing process. In the retail industry, PLM answers the questions of “What” and “Who”: What does a team want to bring to market and who are the best partners to help them do that? PLM gives an overview of the buying, designing, developing, sampling, and production processes of an organization, and the people who fulfill those tasks. PLMs are traditionally focused on the product development functions that take place in-house: sourcing raw materials, product design and development, confirming details with external stakeholders, etc. Most PLMs are internal-only tools –– they’re built to help teams communicate with one another about products. However, to facilitate product lifecycle management in the retail industry, teams also need the ability to interface with external stakeholders.
SCM, on the other hand, answers the questions of “Who” and “How”: Who is fulfilling a manufacturing, testing, shipping, landing, or distribution task; and how is that product being produced, packed, shipped, tested, landed, or distributed? Supply chain management is a large umbrella term that encompasses specific software solutions that specialize in manufacturing, shipping/packing, shipping/freight forwarding, logistics and distribution.
Can PLM replace SCM, or vice versa?
While a complete supply chain management solution is actually comprised of multiple solutions that are overseen by a supply chain manager, product lifecycle management can be housed within a singular solution. PLM software has evolved significantly to oversee not only product development, but also the shipping, sales, listing, distribution and returns process. A comprehensive retail PLM can now replace most existing SCM solutions, providing suppliers and retailers with 10x ROI on their software investment.
Surefront’s product lifecycle management solution is a true retail PLM –– built by a retailer to service the retail industry’s unique needs. Surefront goes beyond the functionality of traditional PLM software by allowing teams to interface with external suppliers, confirm product orders, and customize eCommerce listings in seconds flat. Don’t believe us? See how we helped home furnishings retailer JIA HOME achieve 150% RPE (revenue per employee). With Surefront, success metrics of 150% RPE and 10X ROI are the rule, not the exception. It’s time we got better acquainted. Book a custom demo with one of our product lifecycle management experts today!
Product lifecycle management is a quickly evolving industry with a lot of moving parts. We do all of the research, so you don’t have to. Stay ahead of news & trends by subscribing to our Product Lifecycle Management Blog.
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