There are three main life cycle models discuss in chapter 3:
- Product life cycle (PLC) – originally proposed by Dean (1950) in the Harvard Business Review and popularised by Kotler, this was essentially a marketing oriented view of how product sales changed over time.
- Product lifecycle management (PLM) – sometimes referred to as the engineering product life cycle, it was proposed in the early 1990s and extends the PLC concept by considering the total life of a product from its conception to its cessation.
- Service firm life cycle (SFLC) – originally proposed by Sasser et al (1978) this is an organisational perspective on how service firms develop over time.
Given that the PLC was proposed 70 years ago, it is not surprising that the literature on this topic is huge. Two articles provide insight into this. Rink and Swan (1979) review the PLC concept and research conducted between 1950 and 1979, whilst Cao and Folan (2011) bring this more up to date, as well comparing the PLC with PLM. A Google search reveals no article that reviews research into the SFLC.
The theory that underpins all of these models is that over time aspects of a product or a service vary, and that this variation can be broken down into distinct stages. The importance of understanding this is that some aspect of operations will be different depending on what stage a product or service is at. For instance, production capacity will have to be increased during the growth stage of the PLC, or production technology will be selected during the multi-site rationalisation stage of the SFLC.
Both the PLC and the SFLC are described as bell (or S-) shaped. The problem with this is that there are demonstrably many products or service firms that do not behave in this way (as we explain in the chapter). Indeed as Phelps et al (2007) explain there are in fact many alternative “life cycles”. They argue that rather than try to understand the challenges that growth present by categorising stages, it is better to think in terms of “a typology of issues that all growing firms are likely to face” and their “absorptive capacity” (i.e. their ability to learn and apply new things). This may be especially relevant in the context of i4.0 which may provide opportunities to grow in a number of different ways.
Phelps, R., Adams, R. and Bessant, J. (2007) Life cycles growing organisations: a review with implications for knowledge and learning, International Journal of Management Reviews, Vol. 9, No. 1, pp 1-30
Cao, H. and Golan, P. (2011) Product life cycle: the evolution of a paradigm and literature review from 1950 to 2009, Production Planning and Control, Vol. 23, No. 8, pp. 1-22
Rink, D.R. and Swan, J.E. (1979) Product Life Cycle Research: A Literature Review, Journal of Business Research, Vol. 7, No. 3, pp 219-242