The ever-expanding demands of private label markets combined with evolving distribution channels pose unique challenges for Consumer-Packaged Goods (CPG) retailers. As consumer interest in questions like sustainability in packaging grows, and competition intensifies, it's more crucial than ever for retailers to select a scalable and effective Product Lifecycle Management (PLM) software partner to help manage the growing amount and complexity of information for the private label products they offer.
Industry Snapshot
The growth of private label CPG brands in Europe, the US, and Asia Pacific illustrates the opportunity for leveraging PLM to get to market faster:
Europe:
- Private label brands achieved a 36% market share in Western Europe in 2023. (Source: NielsenIQ)
- Store brands increased their sales by 6% in Europe in 2022, reaching €213 billion. (Source: PLMA)
US:
- Private label sales exceeded $230 billion in 2023, with a 25.5%-unit share. (Source: PLMA)
- Private label brands accounted for 19.4% of total FMCG value sales in the US in 2023. (Source: NielsenIQ)
Asia Pacific:
- Private label brands have been growing rapidly in Asia Pacific, with a market share of around 15% in 2023. (Source: NielsenIQ)
- In Australia, private label brands account for around 30% of the grocery market. (Source: PLMA)
Effectively using software solutions for product lifecycle management can help retailers offering private label brands take advantage of this growth with a centralized platform to manage product development, supply chain, and quality control processes. Major retailers use PLM software to streamline operations, reduce costs, improve speed to market, and support ESG initiatives.
Once you’re ready to make the move up to dedicated product lifecycle management software yourself, here are some do’s and don’ts to consider when drafting your specifications and requests for proposals.
Do's of Reviewing PLM Software
- Work with Industry-Experienced Providers
Evaluate software provider’s knowledge and experience with your industry’s needs. Generalized solutions are often unwieldy or incomplete when applied to specific requirements you may have around supplier sourcing and management, regulatory compliance, and packaging needs. Look for industry specific features like:
- Comprehensive supplier sourcing and onboarding which includes social compliance
- Automated supplier, ingredient, and process documentation management
- Fully integrated product development and packaging management
- Establish Collaborative and Communicative Teams
The right PLM software can powerfully promote cross-functional collaboration, with tailored workflows and a variety of tools for collaboration and communication, such as:
- Product specification templates
- Workflow management
- Centralized document management
- Dashboards and reporting
- Ensure Robust Regulatory Enablement
Look for built-in regulatory compliance expertise. Key features and benefits to consider include:
- Automatic compliance checks against relevant regulations
- Alerts for upcoming regulatory changes
- Regulatory reports and audit trails
- Assess Infrastructure Requirements- like eCommerce, ERP
Choose a PLM software with a cloud-based, scalable infrastructure, that integrates seamlessly with existing systems to gain end-to-end integration for functional teams. Key features to consider:
- Scalable infrastructure that can grow with your company and data
- API access to connect systems together and coordinate data across ERP, PLM, e-commerce, and other software
- Availability of custom integration support from PLM provider
Don'ts of Reviewing PLM Software
- Avoid PLM Without Supplier and Vendor Management
Keep a checklist of solutions and features supporting your end-to-end supply chain, and avoid software without key features such as:
- Supplier document management
- Supplier scorecards
- Supply chain mapping
- Don’t Forget to Include Robust Automation
Ensure your PLM software automates tasks like sample tracking, feedback forms, and documentation workflows. Key automation capabilities to check for during your review include:
- Automatic data validation
- Automated notifications
- Batch processing
- Don’t Overlook ROI and Business Case Development
Consider ROI of a PLM system to support business case building, using tools like Trace One's ROI calculator. Factors you should track with ROI include:
- Reduced product development costs
- Improved time-to-market
- Enhanced regulatory compliance
- Infrastructure cost savings
- Don’t Neglect Cloud Enablement
Consider a cloud-based infrastructure for decreased costs and support for innovation. Key cloud considerations for PLM software:
- Automatic software updates
- Technical support and Service Level Agreements (SLAs)
- Elastic resource scaling—find a cloud-based solution to support your growth or any growth that comes from acquisitions or mergers
- Libraries for regulatory information that are updated by the software and that you can query to handle new compliance needs as they arise
Recap of Key Considerations
When selecting the right product lifecycle management software partner for your CPG retail needs, prioritize industry experience, collaboration tools, regulatory enablement, infrastructure, automation, and cloud-based solutions. By following these dos and don'ts, CPG retailers can confidently choose the ideal PLM partner to drive efficiency, innovation, and regulatory compliance within their product lifecycle management processes.
