Let’s talk about ERP and PLM, the differences, the benefits and everything you need to know in order to be successful.
Our most popular blog throughout the years has been a defining article of what the differences are between ERP, MRP, and PLM. If you want a high and fast overview of the terms read our previous blog, “ERP/MRP/PLM” – or keep on reading below for a more in-depth look at ERP vs PLM.
Oftentimes organizations wonder: Do you really need both a PLM and an ERP system? Should you, or can you, use just one enterprise system to manage all of your product information? Which system is best? An ERP (enterprise resource planning) system or a PLM (product lifecycle management) system?
We hear these questions all the time.
This article breaks down the similarities as well as the differences between ERP and PLM so you can make the best and most informed decision for your specific situation.
As an organization, it is in your best interest to use technology as a competitive advantage – therefore it’s important to understand the ins and outs of both systems.
With everyone needing to get products to market faster and more efficiently, it’s good to understand that building and sustaining brand equity is just as important as speed to market.
As your company searches for technology that will give you a competitive edge, it’s crucial that you choose the right technology to serve as the foundation for your digital transformation initiatives.
This means choosing technology that will boost your innovation efforts, fulfill your operational and strategic business goals, and help you get closer to your end customers.
While your company continuously faces tough decisions when it comes to technology investments, you may be wondering if it is better to go all-in on an ERP system or invest in a PLM solution.
After all, both ERP and PLM vendors ‘claim’ they can manage both Bill of Materials (BoMs), costs, changes, and other information related to products.
My goal is to help you learn what system or systems are best for your organization.
What is ERP and how does it work?
First, let’s breakdown what ERP is and its benefits.
ERP stands for Enterprise Resource Planning systems, software, and solutions.
One of the biggest driving factors for an enterprise-class ERP system revolves around finance and accounting. ERP systems are important because they ensure your quality products are manufactured in a timely, cost controlled manner once they have been engineered and approved.
This could be why approximately 97 percent of mid-sized companies already use an ERP application.
It’s important to also take into account that ERP solutions are considered to be one of the first software solutions to be categorized as an essential business tool. This could also be why so many organizations are already familiar with ERP.
Although there are many ERP software solutions on the market today, systems you may be familiar with might include Oracle ERP, SAP, Epicor ERP, Microsoft Dynamics AX, and a variety of others.
The fact is, ERP systems are generally built to satisfy the needs of business operations.
This means they are often used for manufacturing (such as manufacturing resource planning), human resources (HR), finance, accounting, purchasing, inventory management, order management, distribution, labor, customer service, and more.
An ERP system can take a product to market and is known for handling operational concerns such as logistics, warehousing, and inventory management.
These systems also provide vast amounts of transactional data which can be used to gauge your financial position and make informed choices about future business decisions.
What is PLM and how does it work?
PLM stands for Product Lifecycle Management software, systems, and solutions.
While ERP systems take transactional units to market, the data and information these systems use should originate in PLM.
PLM is all about the management of the process behind the product, as well as the history and collaboration that goes along with it.
Some PLM systems you may be familiar with include SAP PLM, PTC Windchill, Area PLM, Teamcenter, Siemens PLM, and more.
By adopting PLM software you can reap many rewards.
PLM solutions allow anyone involved in design, development, and manufacturing to work collaboratively with one set of comprehensive, accurate, up-to-date information.
PLM software works by supporting processes that define your brand, engage your customers, and differentiate your company’s products in the marketplace.
The unique value of PLM provides is that the software delivers a “single source of truth” about your product to anyone and everyone who has anything to do with product development.
The difference between ERP and PLM
A simple way to think about the differences between ERP and PLM is to focus on what each system was intended for, especially because both of these systems originate from very different foundations.
Product lifecycle management systems focus on planning.
Enterprise resource management systems focus on execution.
To take a deeper dive, the focus for each system influences the key and unique features that the system provides.
PLM is a collaborative planning tool for your products.
The typical users of a PLM system tend to be product designers and engineers who need to work together to figure out what a product looks like and what it should be made of.
Since PLM is about planning everything about your product, it provides capabilities around managing designs, related services, collaboration with red-lining, task management and more.
Most PLM systems even have a PDM (product documents management) system inside of them. This how they often control the history of the intellectual documentation needed to design and manufacture a product.
These systems control and manage everything from CAD (computer aided drafting) files to program, project and change management processes. A PLM system combines all this functionality and integrates it into an overall product lifecycle management process.
This is why PLM solutions have a higher impact on revenue and brand image.
ERP on the other hand is a system focused on making and executing a product. The primary user of an ERP system tends to be people who deal with manufacturing operations.
Since ERP is about execution and fulfillment, it focuses on capturing information around things such as inventory, purchases and more.
While ERP systems focus only on traditional entities such as item masters, bill of materials and dates, PLM solutions encompass all of the iterative, collaborative, and creative processes that make up the vital elements of your product’s lifecycle.
In short, both solutions are vital for a company to develop and make products as efficiently as possible.
How PLM and ERP work together
Despite sometimes being viewed as competing solutions, ERP and PLM systems work very well together.
In fact, these enterprise systems complement each other, and it is in your benefit to have both! We can help you work through a Return on Investment (ROI) analysis if you’d like. Just contact us.
So how do enterprise resource planning and product lifecycle management systems work together?
PLM software provides the single point of product truth used by ERP to manage product resources and financials.
For example, by using eBoMs (engineering bill of materials) data from your product lifecycle management system, ERP can accurately generate purchasing and inventory management records, creating a unified management of both your resources and production.
Essentially, ERP systems pick up from PLM solutions and take finalized products forward.
This means that design, development, sampling, fitting, approval, assortment planning and all other activities essential to creating great products have already been signed off by the time your products reach the ERP system.
PLM systems help define, design, and plan your product. PLM integrated to ERP allows the systems to feed relevant BoMs and file components, so your manufacturing teams can efficiently order, make, and ship your products.
In fact, combining these two software solutions has only improved end-to end business performance and has already proven to be necessary. This is why so many ERP providers have started to acquire and develop their own PLM platforms!
By using ERP and PLM together, your organization can create a powerful source of data, information, processes and workflows. It can make it easier to create and deliver products from idea generation through design to manufacturing and distribution.
Now that you have a better understanding about how PLM and ERP solutions can positively affect the profitability of your entire company, you are in a better position to understand why it is best to invest and integrate both solutions.
PLM ERP integration benefits
Oftentimes, PLM only gets associated with engineering. In fact, many people don’t even realize that the full product lifecycle management system can integrate with ERP.
Rather than considering whether or not a PLM system could complement an ERP system, you should focus on the benefits your organization will gain by integrating the two.
When used together, your organization will have unified control over your manufacturing process and here’s why.
Today, in order to stay ahead of competition it is essential to deliver the right product, on time, and under budget.
To meet these requirements your organization must shorten design time and product engineering cycles.
By using PLM and ERP systems together, you will increase collaboration throughout your entire organization. ERP and PLM work best together as they collaborate and facilitate movement throughout your organization.
Without PLM, your ERP system is likely to consume and manage inaccurate data from design and engineering. This in turn is likely to deliver minimal (if any) improvements to your business.
Only using an ERP system without a complementary PLM system puts your organization at risk of mismanagement of product changes – which could lead to instances of inaccurate financial planning.
Together, PLM and ERP enhance collaboration between engineers, operations, and suppliers as they provide a single source of product truth. This will help you to seamlessly deliver products from design concept through manufacturing and distribution.
Because these two solutions both focus on products, they help create one single version of your product truth. This helps reduce errors and guarantees that your product documents and product versions are under control.
Seamless PLM to ERP integration will enable your organization to be more agile and reactive in all business activities including traceability, cost, delivery, quality, innovation and more. It helps ease your manufacturing process and creates a more cohesive environment.
By integrating both PLM and ERP, your organization will accelerate innovation, increase productivity, improve quality, and boost your overall performance.
Our Solution: Windchill PLM System
PTC Windchill is our PLM solution that we offer to our customers – so for the 97% of you that already have an ERP system, you should consider complementing it with Windchill. A popular blog called, “What is Windchill?” distinguishes all the ins and outs of this system.
Customer Testimonial:
“Windchill and our new ERP system make it very easy to manage customizations and helps us to make sure that we have materials in-stock and on-time to meet those needs. We save about four hours per job with just the front-end BoM load and getting the information into the ERP system – which has been huge for us.” – Myron Pundt, VP of Engineering, ALM Positioners
Watch our video to learn more about ALM Positioners’ success with PTC Windchill
In last week’s post I walked through a manufacturing use case without Product Lifecycle Management (PLM). I hope you noticed the possible issues and costs related to restricting Manufacturing direct access to PLM and engineering data.
If you missed last weeks post, you can read it here:
Product Lifecycle Management in Manufacturing: Part 1
This week I will use the same use case story. The only difference will be manufacturing has access to PLM. I have also included manufacturing specific modules, which are run through PLM as well. Manufacturing has access to these modules and uses them for all Manufacturing planning.
As before, Engineering completes a new product design and starts a release process of the product in PLM. One major difference now, is Manufacturing personnel are included at appropriate points in the new release process. There is a full integration between PLM and Enterprise Resource Planning (ERP) systems as well. This integration allows for automatic transfer of the Manufacturing Bill of Materials (BoM) to Enterprise Resource Planning (ERP) when appropriate based on processes managed in PLM.
One thing to note on the outline below; each system task, since it is in PLM, has links to all the required information engineering released as well as any supporting information. This is including manufacturing information, customer specification, and supplier specifications on purchased parts.
Part 1: Release Process
The lead Manufacturing Engineer receives a PLM task asking him to begin manufacturing planning for this associated new products design.
Part 2: Manufacturing Planning
The manufacturing engineer begins the layout of manufacturing processes in the PLM Manufacturing Planning System. This includes planning at each work cell. Each cell is linked to required resources, parts, CAD data, and manufacturing documents required to complete that cell action. With the correct system, this will have included all metrics required to properly and completely plan a manufacturing process.
If required, a Manufacturing BoM is based off of, and linked to, the Design BoM. This allows the Manufacturing Engineer to restructure the BoM as needed to allow for the most efficient manufacturing processes without losing ties to the design BoM and parts the manufacturing BoM was created from.
Once complete, work instructions can be created in web form or be printed to paper from this plan. The work instructions would include links to the correct Engineering data and required manufacturing documentation.
Part 3: Release Process Continues
Once the Manufacturing Engineer completes their planning tasks, all required parts and Manufacturing BoMs, are automatically added and/or updated into the ERP system via an integration to PLM.
During this same process, PLM system tasks are sent to purchasing to start the procurement process.
Tasks are also sent to the tooling designers to start tooling generation.
As mentioned, these tasks are automatically linked to all the required engineering and manufacturing information to appropriately complete each task.
Part 4: Tooling and Controls Tasks
Tooling designers access PLM to generate their tooling data and controlling programs directly from engineering 3D data.
The resulting CAD and other tooling data are also saved to the PLM system. This data is linked to Engineering data, Manufacturing data, and the Manufacturing process plan.
Machining paths and other controlling programs generated are also created and saved to PLM with the same functionality mentioned above.
Having these links from manufacturing to engineering data allows for full impact analyses of any potential changes being planned for the product by the company. As well as insures all downstream data is updated appropriately when an engineering change does occur.
Part 5: In-Process Change by Engineering
While ramp up is happening, Engineering makes a last-minute change. Once the change is complete in Engineering, they start a change process that includes all downstream departments. Each department receives a PLM system task with the all required information related to the change linked to the task. This includes purchasing, manufacturing, tooling, etc. Each department acts upon the change, completing all internal department actions required.
Once all of the departments have completed their tasks in PLM, the change has been completed. Manufacturing ramp up continues leading into the initial manufacturing process.
Part 6: Issue Tracking and Correction During Manufacturing
During the initial manufacturing process, a manufacturing team member notices there is a clearance issue with the design. The team member verbally notifies their cell leader of this issue. The cell leader creates a change request in the PLM System. During that process, he creates a digital markup that is saved with the change request. The change request is created referencing the engineering data the issue is related to.
The engineer responsible receives a PLM system task notifying of this problem. The engineer takes the needed corrective actions and updates the CAD data. This CAD data is then revised released and included in the problem report.
The cell leader receives the notification the problem report was approved and corrected. The updated CAD data is included, the cell leader and the manufacturing floor team member can now reference the new data directly from PLM and make the needed correction.
This happens many times during the initial manufacturing process. The necessary PLM processes are initiated based on the issues found during the initial manufacturing run.
Manufacturing uses PLM to gain access to engineering data because it always references the latest released information. This insures nothing is made from outdated information.
Part 7: Final Product Release
The final product is released to the customer.
All as-built information has been saved in PLM, meaning most of the related engineering data has been changed via the PLM process capturing changes. Anything that hasn’t been corrected yet is also saved via electronic markups to be processed later.
Part 8: Another Manufacturing Run
One year later, the company needs to do a manufacturing run on this same product. However, they have a large turnover with their manufacturing employees. Only a few people are there that worked on the first production run of this product. Without the use of PLM, this could be a disaster. However, all as-built changes where captured in PLM for the first production run of this product and manufacturing is still using PLM to access all build information. This allows manufacturing the ability to properly prepare for the next run. This resulted in very few, if any, issues during the next production run.
Hopefully it is easy to see the benefits of giving manufacturing direct access to PLM, even based on this limited use case example.
There are many benefits to utilizing PLM in manufacturing. Much more than is appropriate to list in a blog. If you’d like to take a deeper dive, please contact one of our experts here at EAC. We would love to talk you through all the benefits PLM utilized in manufacturing could offer you.
In the meantime, reading our eBook, “Designing an Effective Change Control Process” may be helpful. We walk you through how to design a change control process to improve productivity and reduce quality issues.
Many still think that a Product Lifecycle Management (PLM) system is only for the Engineering department. At one point that may have been true. However, I am starting to see a shift in that mind set. More companies every day are starting to see the benefit, and even the necessity, in giving manufacturing direct access to the appropriate engineering data through a robust PLM system.
In this two part series I am going to outline a fictional use case both with and without PLM. My intent is for this to highlight the benefit of PLM in manufacturing. Please realize the use cases are not all inclusive. There are many possible actions that need to be taken to start manufacturing of a new product. I am simplifying for purpose of maintaining a storyline that is easier to follow along.
In the first use case, engineering is working in a PLM system and Manufacturing is not. Engineering uses PLM for data management, process management, and controls their release process utilizing this system. However, only engineering has access to this PLM system.
When a new product is released to manufacturing, only the drawings associated to this product are printed on paper and put in a folder and then physically handed to manufacturing. Once manufacturing has this folder, they begin the required tasks to begin production of this product. I will outline below what a possible workflow might look like in manufacturing without a PLM system.
Part 1: Initial Manufacturing Product Release Tasks
The required parts are manually entered into the Enterprise Resource Planning (ERP) system. In many cases, the parts are entered into a manufacturing Excel file instead. Requests made to purchasing to procure parts and raw materials required, utilizing copies of the 2D prints to send to the suppliers. After that, a Bill of Materials (BoM) structure for the parts is manually created to support the required manufacturing processes.
Part 2: Process Planning
Manufacturing will then begin the layout of processes required to manufacture the product. In many cases, the layouts are also created in Excel.
Part 3: Tooling and Controls Design
The tooling designers recreate the required 3D models from the 2D prints. The designs are typically saved in an uncontrolled manner such as on a local drive on a user desktop. The machining paths and other controlling programs are generated from these uncontrolled tooling files as well.
Part 4: In Process Engineering Change
While the ramp up is happening, engineering has the ability to make last-minute changes. If a change is made, a new 2D print must be created and supplied to manufacturing. Manufacturing must attempt to replace all copies of the printed design with a new copy. When this happens, there is great risk associated with having two of these copies floating around. Designers are manually notified to make the required changes, as are the supplies to make the required changes to the new prints. Manufacturing planning must adjust processes based on these changes as well.
Part 5: Finish Ramp Up
Manufacturing ramp up continues leading into the initial manufacturing process.
Part 6: Begin Initial Manufacturing Run
During the initial manufacturing process, a manufacturing team member notices there is a clearance issue with the design. The manufacturing team member verbally notifies their cell leader of this issue. The cell leader will then make a phone call to the engineer whose name is on the print and explains the problem. The engineer tells him to grind down the part to allow the needed clearance. The cell lead marks by hand on the print how much the part must be grinded down. If the engineer remembers, he will also update the 3D design to match this. It’s unlikely they would request a formal change to be release. One thing to note here is that there is no history of this interaction anywhere but on the market up print on the manufacturing floor.
This happens many times during the initial manufacturing process. Typically, only major issues are formally documented which will drive a full change process in Engineering.
Part 7: Out-of-date Information on Manufacturing Floor
One sub-assembly was made using out-of-date information due to outdated prints being used. Rebuild of this sub-assembly was required.
Part 8: Product Release
The final product is released to the customer.
Most of the as-built documentation is saved on paper in a folder in the manufacturing offices.
One year later, they need to do a manufacturing run on this same product. However, they have a large turnover with their manufacturing employees. Only a few people are there that worked on the first production run of this product. They were not aware of the as-built mark-ups manufacturing had in their folders. So, many of the same issues were found and had to be corrected in this manufacturing run again.
I listed a few possible issues that could come from uncontrolled information used in manufacturing. I am sure you can imagine, or even experienced other possible issues.
Keep your eyes peeled for next weeks post where I review the same manufacturing process, but this time with manufacturing having direct access to Product Lifecycle Management (PLM). If you would like to learn more about the benefits of PLM in manufacturing you can download our eBook, “Designing an Effective Change Control Process” here. This eBook discusses how following a change control process would likely improve productivity and reduce quality issues. The benefits of having a controlled process in place substantially outweigh the initial time and resources to get started.
This is part one of a three part series regarding PTC Arbortext, deciding whether to customize or not. In this series, we will discuss the benefits of customization, the costs of customization, and deciding whether to customize or not.
You’ll often hear of DITA in the technical documentation world. DITA stands for ‘Darwin Information Typing Architecture’ -it’s an XML-based open standard for structuring, developing, managing, and publishing content. Quite the mouthful huh? What you need to know about DITA is that it leverages XML to be used as a way of writing and storing your data so you can manage it like an asset. What does it have to do with PTC’s Arbortext? PTC was the first company to ever deliver a complete DITA solution – one where organizations can finally start to maximize their investment in service lifecycle management.
One of the most fundamental questions you have to face when considering an Arbortext implementation is whether to use the technical documentation software out of the box or develop customizations to adapt the software to your specific use cases and work processes.
In practice, this is not so much of an either/or decision, as a how-much decision. In other words, nearly every implementation has some amount of customization, even if it’s just tweaking a composition stylesheet to add your own appearance specifications to the composed output. For some applications, where one of the standard doctypes such as DITA or DocBook is adequate, that’s all you need. For other applications, you may want to add custom features, user interface elements such as toolbars and custom dialogs, a tailored doctype or schema to support specific data requirements, connections to other enterprise systems such as ERP systems, and so on.
Adapting Arbortext software to your specific business environment can provide a number of advantages. Here are some examples where customization can add value to your implementation:
Author Efficiency
Custom features and user interface controls allow the author to work more efficiently.
Example: if authors frequently need to change one type of element into another similar element, then adding a toolbar button and/or keyboard shortcut to trigger the operation can let authors do it with a single click or key press, as opposed to using the Change Markup dialog.
Workflow Integration
Custom integration with software can streamline processes in the workflow.
Example: Suppose you have part data stored in an ERP system, and you are writing support documents associated with the part data. In a stock Arbortext installation, you might need to export the part data as an Excel spreadsheet, and then copy portions of the exported data in Excel to paste into the XML document in Arbortext. In contrast, a customization could allow authors to click a toolbar button, make a few quick selections in a dialog box, and automatically extract, format, and insert the part data in the correct location in the document.
New Capabilities
Customizations allow you to add new features to Arbortext Editor.
Example: Suppose you have a metric that you want to track on your documents that depends on the number of specific elements in each document, such as graphic elements. You can easily add a feature that would count instances of a specific element and report that for a document. You could also generate a report for a set of documents found in a directory tree or a folder in a content management system (CMS). This would let authors get this information directly within Arbortext Editor, without having to switch to an external tool to do the analysis/reporting.
This publishing engine software can be customized in a number of ways, and frequently we see users customizing their stylesheets to make them look better or compliant with their publishing standards. Arbortext stylesheets are used to publish documents that have consistent styling and formatting, no matter who authored the document. Sometimes these stylesheet customizations can be significant and complex, but often we see a need to make simple modifications to the fonts, logos, and page margins. EAC QuickPubs provides users an easy way to make those simple style modifications and create great looking documents.
Stay tuned for the next post where we discuss the cost of customization.
If you’re looking for ways to adapt your environment to fit your organizations needs, EAC QuickPubs may be for you. It’s an add-on designed to style documents that fit your organizations brand at a lower cost than a customization to PTC Arbortext. You can create aesthetically pleasing part manuals, owner’s guides, service manuals and more with ease. Publish fast, cheaper, and better today!
Transform the way you design and publish product information through QuickPubs, an EAC product for PTC Arbortext. For more information about QuickPubs contact us. Publish faster, cheaper, and better today!
Why bother with the Internet of Things (IoT)?
Great question! Maybe to understand your product, make a deeper connection with customers, create a new business model, increase revenue or even build a new revenue stream. Perhaps you’d like to find out what your products are doing after you sell them and figure out which features to include or remove from your next iteration. There are piles of ideas and ways to make the IoT work for you. In short, however, it depends on your initiatives — and the IoT could be just the thing you need to move your initiatives from “How are we gonna do that?” to “This is gonna be awesome!”
When considering your corporate initiatives and the IoT, I’d encourage you to integrate them rather than looking at them as separate things. At EAC, our Connect Services (the way we help customers achieve their IoT objectives) starts with strategy. You’ve got to make a connection between the motivation to have smart and connected products and your initiatives. In other words, your approach to the IoT could be the central catalyst of your initiatives. Otherwise, it’s just a fun and techy science project without clear direction.
Let’s say you’re a forward thinking company and you call yourself innovative while having a goal of improving dealer service capabilities and increasing end-customer engagement. Perhaps you could build a whole new business unit that collects data from your product in the field and distributes use and service information back to your dealers as they provide service. It could increase revenue (data/subscription sales to dealers), increase your ‘innovative edge’ as perceived by your end customers (through apps and product information) and feeds feature and performance data back into your design cycle. You could aggregate the data from your products in the field to your ERP and MRP systems and have truly integrated (connected) PLM into your business. Just for the sake of argument, this could include role-specific mobile device apps for dealers, DIY repair, data junkies and regional usage maps. We could even weave this into production and procurement roles and have data actually ‘flowing’ in several directions. Who knows where it could lead.
Ok, now back to avoiding the ‘science project.’ The key is to have a strategy — figure out why you want to be part of the IoT and then go do it. Our goal at EAC is to help companies transform the way they design, manufacture, connect to and service their products. As a part of that, we’d like to help you build your strategy, devise ‘connected things,’ and implement a facilitating platform easing the access, sharing and use of the information. This 3-legged stool is what we place our IoT strategy on — next time I’ll talk more about the ‘things’ or the ‘platform.’ For now, how can we help you build your IoT strategy? Let us know…
I find that people tend to blur the lines between ERP, MRP, and PLM. The purpose of this blog is to summarize the high-level intent of most ERP, MRP and PLM systems.
ERP — Enterprise Resource Planning:
One of the biggest driving factors for the need for an enterprise-class ERP system revolves around finance/accounting. Anything that is related to income or expenses must be tracked in extreme detail. To properly manage finances, many other aspects of the business need to be tracked and controlled in a transactional manner. Everything from human resources, sales, returns, shipping, inventory, and so on. To ensure all information remains accurate very strict rules and processes are set up. There are a vast amount of ways ERP systems can help a company manage their business. Many companies find benefit and are almost required to have some sort of ERP system. These systems help them manage their business in today’s market full of government regulations and reporting requirements.
MRP — Material or Manufacturing Resource Planning
Both of these have a very high level of detail around material tracking. Material Planning tends to focus more on the cost of material and its location at any point in time. This can include everything from shipping, lead times, actual cost, to material movement throughout the manufacturing process and the cost associated with it. Manufacturing Planning also has a detailed tracking of material. However, these systems tend to focus more on the manufacturing process. One specific thing they tend to track is work cell details. Some examples of this tracking are the material going into and out of a work cell, the resources required for the work cell to operate, tooling required at each work cell, and in some case detailed work instructions for each process required at the work cell, and much more. These systems still have a very tight process that must be followed for control of the manufacturing or assembly process. Variations to the process are not typically permitted unless it is a defined; pre-approved process variation.
PLM — Product Lifecycle Management:
Good examples of these systems tend to have a completely different mindset from ERP or MRP systems. PLM is all about the management of the process behind the product, from conception to sunset, as well as the history and collaboration that goes along with it. The focus tends to be on a more dynamic and flexible way to allow people to focus on the development of a product, not on transactional functions related to it. Most PLM systems also typically have a PDM (product documents management) system inside of them. PDM is used to control the history of the intellectual documentation needed to design and manufacture a product. Everything from CAD (computer aided drafting) files to general production specification documents. PDM ensures this data stays as accurate as possible through versioning and access control based on the state of the object in the overall design process. Better PLM systems also have Program, Project and Change Management processes built in. PLM then combines all this functionality into an overall product lifecycle management process.
Many larger ERP systems offer modules to do MRP, PLM and even PDM. In many cases, these add-ons just do not have the detailed functionality needed or the flexibility required to accomplish what the customer is looking for. For instance, I personally have participated in the development of an MRP system. While the ERP system we used had a type of MRP module, it did not track the details or allow the flexibility we needed at the work cell level to control our assembly process.
I have seen many examples of larger companies also using a major ERP system to do PLM. These same companies then find out these systems are just too limited in both functionality and flexibility to allow engineers to develop and design new products freely. Another area ERP tends to fall short of the companies expectation is with PDM. Often the problem is with the lack of integrated control of the CAD files. Due to this limitation, it makes the interaction between engineers and the ERP system tedious and time-consuming.
I personally feel these ERP systems tend to fall short in these areas is due to their focus on transactional functions and very tight controls. Based on their origins around finance, this type of control is completely and understandably needed. Because of this, there is little to no development around the flexibility needed for free-flowing processes often required in the product development environment.
Some best examples of a complete implementation of ERP, MRP and PLM I have seen are companies that have utilized the best of each system based on their business needs. They then utilized integration methods so appropriate data is shared between all systems. Some of the most painful examples I have seen are companies trying to change and force their internal business processes into the envelope provided by an OOTB ERP system. Or worst yet, paid a very large amount of money to recreate the wheel and customize their top level ERP system to do what they need.
In the end, all of these systems have a place in today’s business. They each have strong points and weaknesses. Just be cautious of any company that claims they can do it all. Remember the quote; “Jack of all trades, master of none.” Why not get a team of “masters” and have them work together.
