Product Life Cycles in E-Commerce

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PRODUCT LIFE CYCLES IN E-COMMERCE

A product life cycle is the entire cradle-to-grave evolution of a particular product, from its initial design to its final abandonment. Life-cycle management includes all the processes along the way your company uses to get the most out of the product line, such as assessing market demand, sharing upgrade information with suppliers, projecting future sales and market conditions, and improving customer satisfaction with the product. The keys to successful product-life-cycle management are knowledge-based planning and coordination with all entities involved in the product's life cycle, particularly other businesses you work with to design, manufacture, coordinate, and deliver your products.

SUPPLY CHAIN MANAGEMENT

Supply chain management is one of the key components of managing life cycles in the age of e-commerce and sophisticated information technology. Supply chain management involves using the Web and related information technologies to coordinate and optimize the flow of supplies and equipment as your firm goes about its operations. By building streamlined supply networks and coordinating with suppliers to improve supply chain efficiency, you reduce the cost and time involved in bringing your products to their destinations.

Traditionally, supplychainmanagementincludedlogistical concerns, such as inbound supply shipping and outbound product shipping, keeping production opera-tionsfunctioningsmoothlywithallnecessaryequipment and components, and order fulfillment. In e-commerce, higher-level planning has dictated that supply chain management systemstake into considerationevery facet oftheproduct'slife, fromitsinitialideathroughtheengineering and design stage, from customer service and repair issues to its final discontinuation.

Supply chain management carries the additional benefit of the maximum level of transparency. In other words, all design planning, orders, requests, and communications are readily accessible to all parties, which both increases the efficiency of the product life cycle in itself and streamlines accountability, pressuring all parties to boost their performance and making troubleshooting less cumbersome.

A COLLABORATIVE PROCESS

For the most efficient modeling of a product's life cycle, your firm needs extensive market data, particularly a mix of current demand along with sales forecasting—preferably several forecasts based on various potential industry scenarios. Thus, it's in your interest to involve your suppliers and other partners as early in the product's planning process as possible, allowing for greater and more efficient coordination from the ground up. Analysts coined the phrase collaborative product commerce (CPC) to describe the joint efforts by partnering firms to design a product and move it through its various stages in getting to market, and this CPC practice is increasingly important as the e-business environment creates new and more pressing demands and pressures on companies.

A ramp-up—the process of getting a product or service ready for full-scale launch—is crucial to an efficient product life cycle, and can best be accomplished by working and sharing information with all relevant parties, including suppliers, as early in the design process as possible. In this way, there can be the greatest degree of coordination, to ensure that all components will be ready and perfectly fit when your company is ready to fit them into the finished product during assembly.

SOFTWARE AND SYSTEMS

System compatibility and extranets are an integral part of a strategic partnership. Life-cycle-management tools, including computer-aided design (CAD) systems, which are designed to allow companies to share information on products with other firms and suppliers as well as between departments within the company, are becoming an enormous industry in their own right.

The proliferation of extranets and business-to-business exchanges has provided an infrastructure where effective product-life-cycle management is at your fingertips. They help ensure that the tools to effectively measure demand, assess the competition, coordinate with suppliers and other partners, and gather and share relevant data are readily available.

Enterprise resource planning (ERP) systems, which include everything from product catalogs to order files to inventory databases, are another vital component of product-life-cycle management. One common practice is to take these back-end databases and integrate them into a company-wide Web portal, which can also be shared with suppliers and partners. This way, companies can communicate across secure networks exactly what design specifications they need, the precise quantity of supplies and the exact timing of their shipment, the latest demand information for the greatest possible coordination, and all relevant shipping and order-fulfillment concerns.

Increasingly, software vendors are designing applications for sharing sophisticated design information over the Web and over extranets, so that high-level product planning and design can be shared among partners in real time, improving efficiency. If suppliers are able to view the original CAD file, for instance, they are able to more quickly and cost-effectively modify their own processes in accordance with those design specifications. In other words, CPC processes allow a smoother, more continuous ramp-up, reducing costs, adding value, and increasing speed and customer satisfaction.