The battle for PLM in China has begun

PLM is expanding and vendors are always looking for new market segments and niches. One of the well known white fields for PLM vendors was small and medium companies. Another one was industry segments like fashion and apparel, consumer production goods and others. However, I can see also geographical factor in place.

China is an interesting place for manufacturing. For the last decade it accumulated lots of manufacturing facilities. These places are growing from low-level commodities competing for outsourcing product cost towards innovative manufacturing facilities.

PTC blog addressed China in one of the latest posts – Chinese Manufacturers Use PLM to Drive Higher Value. Here is an interesting passage I captured explaining why PLM became an interesting technology to discover for Chinese manufacturing:

Rising costs are one reason. As Aaron Lo, Partner, KPMG China, has noted: “Labor costs have increased by 15-20 percent per annum on average over the past four years. This together with an appreciating Chinese currency has meant that China is no longer a low-cost manufacturing base.” At the same time, Chinese manufacturers can now call upon a skilled labor force, a large domestic market, and new networks of suppliers to serve the country’s growing consumer market. Together, these factors have accelerated the growth of more sophisticated manufacturing in China as manufacturers feel both the need and the opportunity to move up the value chain.

So, what Chinese manufacturers are looking from PLM implementations? Here is the short list – rapid product design, improvement product data management, optimizing and simplification of development processes. The constraints of Chinese manufacturing companies clearly include global deployment, collaboration with OEM/Suppliers in other GEOs as well as significant security requirements. Cost is not the the last factor in this game as well.

What is my conclusion? China is clearly a potential market for PLM software manufacturers. Some of them are already there working heavily with partners and local organization. Some others can consider Chinese invasion to battle a potential of Chinese market. Just my thoughts…

Best, Oleg

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3 Responses to The battle for PLM in China has begun

  1. I can’t agree more.. recently I was in China consulting a luxury auto manufacturer on PLM.. with increase in OEMs from China, China is no more only a manufacturing destination, rather it want to grow as a “Exporting” (designed and manufactured in China) destination.. China is focusing on designing (with support from outside, where expats are working heavily in design department) and producing locally.. China is definitely a nex PLM destination and I am aware many PLM service providers have already opened their shops in China..

  2. Simon says:

    And this is good news for translation and localization vendors. The volume of workload to be executed is enormous as far as I am concerned.

  3. Rahul, thanks for your comment and data point. I agree, PLM vendors will be getting more focused on Chinese market. Best, Oleg

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