Recognizing the Value of PLM in Health Sciences

How stakeholders in a global value chain can create an innovation environment that leverages product lifecycle management to drive today’s most important health sciences business initiatives.

Medical devices are highly complex and increasingly networked in today’s healthcare delivery facilities. Designing these devices requires their developers to recognize and isolate faults and protect the patients that use them while preserving product and process data for regulatory compliance and continuing improvement.
For example, in recent years, hospital medical procedures have been automated and managed on a centralized basis. As these systems increase in complexity, hospitals and other healthcare facilities are faced with the challenge posed by the rising potential for error. Since almost all of these devices are defined as safety-critical, the failure of medical devices can be catastrophic.
Furthermore, facilitating communications between various healthcare delivery facilities and the product development systems employed by multiple medical device manufacturers is intricate and complex. In addition, all medical devices must be verified according to stringent U.S. Federal Drug Administration (FDA) standards. This puts the onus on medical device manufacturers to implement tests and procedures that demonstrate and prove the safety and effectiveness of their products. Additional challenges for this environment are described in ENEA Embedded Technology, “As if that isn’t enough to give any medical applications designer a chronic stress-related headache, a parallel development is the escalation of research into the use of a plethora of new electronic devices that will be marketed within the next 2 to 5 years. That means designers must anticipate tomorrow’s requirements as well as today’s needs. In addition, the designer must keep up with new emerging standards as well as the ones already in place – and devices using different standards must be made compatible with central management systems.”1
To successfully compete in today’s healthcare industry, companies need to implement cost effective collaborative information management solutions that are robust and flexible enough to respond to the ever growing needs of the medical care community. That means analyzing their current position and innovation investments with brutal honesty – and then moving quickly to either solidify that position or reposition themselves to increase their competitiveness and plan for renewed, long term growth.
From a business perspective, the medical device industry is becoming more mature, facing slower growth and lower margins. It is particularly at risk in today’s political and cost-conscious world. During the past year, many companies across this sector have laid off up to 12 percent of their workforce while restructuring their operations to meet current business demands. 
Since many of their devices and services are increasingly being commoditized, today’s manufacturers understand the need to differentiate their products on the basis of features, design and usability. Embedded software and electronics are becoming more prominent in many devices as more functionality is provided in smaller packages. For example, many manufacturers now provide software-delivered intelligence in chips that drive their products. In addition, the current economic situation is requiring companies to decide whether the time is ripe to adopt new technologies to gain a competitive edge – especially in terms of innovation’s ability to facilitate new product content, cut cost, reduce process complexity and enable operational downsizing.
Simplification strategies, such as virtualization and cloud computing, offer real saving opportunities to companies that understand the risks of adopting any new technology and implementing it properly. But companies looking to introduce the next new innovation (such as customer relationship management or marketing software) will face an uphill battle – unless, again, they are able to deliver a measurable, short-term benefit to their bottom line.
Key trends affecting the health sciences industry
Medical device companies are facing significant business challenges given today’s declining global economic conditions. Going forward, successful life science companies will need to take strong actions to protect their existing competitive advantage by more effectively managing costs, deploying their human, capital and technology resources, and developing core capabilities and strategies to squeeze the most out of their streamlined product portfolios.
With this in mind, companies are expected to adopt innovation-driven initiatives that address:
  • Today’s intensifying cost pressures; 
  • Ongoing integration of their products into hospital information systems;
  • Greening requirements for product technology;
  • Regulatory compliance;
  • Increased demand for all-in-one technology devices; and
  • Cloud computing or virtualization. 
Introducing PLM
The technology for facilitating these initiatives is called product lifecycle management (PLM). PLM is viewed differently across the industry. Some companies view PLM as a business system; others see it as an IT tool. Regardless of what view is taken, companies commonly mistake PLM’s various components, such as its product data management (PDM) capabilities, as the only functionality provided by the technology. Perhaps the best definition for PLM is:

The key operational components in this definition are references to PLM’s “management approach,” “integrated methods” and ability to facilitate “cooperative development.”
Risk and value
It is important to recognize the risks associated with implementing a PLM strategy. The most common failures occur when organizations view a PLM program as a technology installation and fail to consider the complexities of strategic change. Successful PLM initiatives require a balance of people, processes and technology; a strategic plan balances and addresses all of these considerations equally.
The success of any enabling technology depends on its ability to deliver productivity, cost and quality improvements. For example:
  • The more people helped, the greater the potential benefit; 
  • The more often the system is used, the greater the potential benefit; 
  • The more costly the task or activity, the greater the improvement benefit;
  • The greater the re-use potential, the greater the realizable benefit; and
  • The greater the standardization, the greater the realizable benefit. 
The key to all of this is developing both a short- and long-term strategic plan based on accurate information and the flexibility with which the plan can be varied and adapted to the flow of your particular business.
Like all mission-critical initiatives, PLM solutions challenge decision makers to determine how and where to make an impact. Questions that need to be answered include:
  • What are the highest PLM priorities?
  • hat PLM projects will deliver the biggest pay off?
  • Where to start?
  • What decision-making process should be used to focus a PLM investment?
  • How can you align a PLM implementation plan with your PLM business case?
  • How can you measure the business benefits derived from PLM?
Today’s mission-critical IT solutions need to be fully cost justified and aligned with tangible business value and quantified ROI targets. Accordingly, they need to:
  • Continuously assess and improve performance as a strategic investment
  • Eliminate unwanted surprises
  • Minimize risk more effectively
  • Use success metrics and best practices to test and validate PLM’s business case
  • Produce an active model of the PLM investment strategy
By working with the right PLM software provider, you can derive a key strategy and vision attainment roadmap to model the ideal performance of your product development operations – including your requirements and product planning, concept engineering, product engineering, sourcing, manufacturing engineering, product test and quality, manufacturing production, distribution and logistics operations. In addition, you also benefit by quantitatively defining and comparing best practices against actual operational performance and determining what business value, ROI or cost savings can be attained before the PLM implementation starts. This advantage can only be gained by working with PLM subject matter experts.

1. Mike Christofferson, ENEA Embedded Technology, 
2. “A Cup Half Full: PLM in the Automotive Industry,” IBM Global Business Services, September 2008.

About Siemens PLM Software: 

Siemens PLM Software, a business unit of the Siemens Industry Automation Division, is a leading global provider of product lifecycle management (PLM) software and services with 7 million licensed seats and more than 71,000 customers worldwide. Headquartered in Plano, Texas, Siemens PLM Software works collaboratively with companies to deliver open solutions that help them turn more ideas into successful products. For more information on Siemens PLM Software products and services, visit

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