PLM and ERP: Putting Each in Their Place

Tech4PD: Episode 6

PLM and ERP play extremely important roles in product development. PLM is crucial for automation and enablement of product development overall as well as engineering and innovation efforts, while ERP is key for the execution side of product development and the business of manufacturing. Integration of these two tools and how they work together can be very influential. Watch this episode of Tech4PD and see the debate on the roles of PLM and ERP in managing product data.

PTC’s View

The debate of PLM versus ERP has been running for years. While many companies and vendors often view it as one system versus the other, both domains are necessary. PLM is critical for managing the strategic planning and development of a company’s differentiating products. ERP is required to manage production execution so production is cost-effective and scalable. PLM and ERP complement each other. Manufacturers need to develop strategies and processes that consider communication and collaboration between domains. However, these strategies must also take into account the nature of each domain. PLM is product-information oriented with data models that account for highly-iterative, complex definitions. ERP is transaction-oriented with emphasis on actions related to delivered goods. Both domains are necessary, but require different capabilities.

At PTC we believe that PLM and ERP are two essential parts of a manufacturer’s product development strategy. PLM provides management of a company’s complete product definition including requirements, mechanical components, electrical designs, software, and documentation. PLM enables optimization of product design and product quality before execution and before release to market. Once a design has been optimized, the PLM system should seamlessly release information to production. Likewise, critical ERP and MES information that influences quality measures and future design decisions should be available to PLM users.

When product information is viewed as ‘enterprise information’ that flows throughout functions, companies are free to develop best practices that differentiate themselves and their products. Once these practices are defined, manufacturers can then evaluate and assess system needs for all domains including PLM and ERP.

Video Transcript

Jim: Hi. Welcome to Tech4PD. I’m Jim Brown.

Chad: I’m Chad Jackson. Today, we’re going to be talking about the roles that PLM and ERP play in product development.

Jim: Chad, why is it important to talk about the roles of ERP and PLM?

Chad: Both types of systems are very important to product development, there’s no doubt about that. PLM is very important to automate and enable product development overall, as well as engineering and innovation efforts. ERP is very important to handle the execution side of product development; it’s really about the business and manufacturing. They are complimentary in what they do for product development.

Jim: Yeah, I would say absolutely. I know you like my fancy frameworks, so I’ll share one. I think ERP and PLM make up a big part of a manufacturer’s enterprise ecosystem. Really, the ability for PLM to become to master for the product information, and then push that down into ERP for execution and manufacturing, or MES as well, for execution, but also systems like service lifecycle management, CRM, supply chain, and others. I think we’re seeing quite a bit of that integration happening as well, really, with PLM being the master, though, and then driving into these.

Chad: OK. If you look at some of the PLM players, they certainly, have integrations with ERP tools. You look at the 4 standard ones: PTC, Siemens PLM, Dessault, and Autodesk, obviously, will connect, but also, the smaller guys like Arena, Aras, and some of the newer guys; it’s seen as very important.
The other thing to think about too, is Siemens PLM has a MES offering that they integrate with, as well as PTC has a service lifecycle management solution that they integrate with, as well.

Jim: Right. Autodesk is really broken because of the Cloud nature of their PLM systems; it’s broken into, really, Cloud integration which is a new thing in the PLM industry, which is I think, very interesting. You also have the ERP vendors themselves: SAP has built a PLM system. Oracle acquired Agile. InForce acquired a couple of companies. You’re seeing partnerships, but also, ERP companies with solutions. Integration is still an issue there, not just because they come from the same vendor, even, maybe on the same platform, you can’t always assume that they’ll integrate.

Chad: Jim, obviously, PLM and ERP are important to work together. How do you see them working together, exactly?

Jim: I think it’s very important that PLM serves as the master and that we’re defining all of the information about a product in PLM, and then moving it out to other systems for execution. The PLM is really the master across ERP for product data, but also for other solutions, like service, and others as well.

Chad: I think it’s a good vision. I think in reality, though, it’s too big of a bite to take. I think at a minimum, you need a one-time push from PLM to ERP; relates to manufacturing, and also, whenever you have a change. When you change process, you got to rerelease that information. I think that’s really all you need at a basic level. I think going beyond that can be a little tricky.

Jim: It can be tricky, and it’s an evolution to get there. The speed of business today and the errors that come from manually moving information or just one-time push; I think we need to be a lot more fluid in what we’re doing and be able to quickly understand the impact of changes. When we make a design change, what does that impact on the manufacturing process? What is the impact on, maybe, test cases, service parts? Have that in one place and then push it to the other systems to execute.

Chad: Interesting. I think the one thing that you said that stuck in my mind is that you got to make the right decisions. I think what’s important there is to have the right people participating in the process. That doesn’t necessarily mean you have to get everything into a system. Again, I think it’s tempting, but it’s a little too big of a bite.

Jim: I agree with having the right people involved, but I also think you need to have one source for that information, it’s going to have to be automated, and then you start to pull that information back around and get feedback, not just from the people, but also from real data.

Chad: All right. Luckily, they get decide who’s right.

Jim: All right. Let’s see.

Chad: All right. Let’s take a look at what’s going to happen in the future related to this topic. Jim, what do you think’s going to happen?

Jim: I think we’re going to see more closed-loop integration. I think we’re going to see more and more people wanting to take the output of execution, whether it’s service information, manufacturing information, information from CRM on complaints or requests, and bring that back up into the design environment in PLM.

Chad: OK. All right. I think that’s fair. Personally, I think that’s going to mainly happen through partnerships and alliances; a lot of what has been happening so far, although, I think the one thing that will change is those integrations will be lighter touch integrations instead of getting everything over, just picking out the most important pieces of information that needs to go to each system, and keeping it simple.

Jim: I’ll make a wild prediction. I think that we’re not done with consolidation. I think we’re going to see a major ERP vendor probably acquire . . . I’m not sharing any information of anything I know, but I think it’s inevitable that a large ERP vendor will acquire a PLM vendor and have ERP/PLM and design CAD and engineering tools all in one place. You heard it here first.

Chad: They all have PLM systems already, right?

Jim: Yeah. Maybe they want the CAD systems.

Chad: All right. OK. Interesting. That was predicting what’s going to happen in the future. Now let’s take a look at the consequences from the last episode.

Jim: This should be good.
Here I am getting ready to take the polar bear plunge. Of course, because this is an engineering show, you wouldn’t expect me to do this unprepared. The water today is 35 degrees Fahrenheit. I’ve taken a few precautions and I’m getting ready to go.

Chad, you did just such a good job being polled; you did such a good job with beating me on this bet. I still believe PLM’s the right way to go. My hat’s off to you.

Thank you for joining us on Tech4PD. We’d like to thank our sponsor, Autodesk, and also our founding partner, PTC.

Chad: We’ll see you next time on Tech4PD.