ERP and PLM: Two Essential Pillars of Manufacturing That Work Better Together
Written By: Mark Taber
9/10/2020 Read Time : 4 min

Manufacturers rightly rely on ERP and PLM systems to drive their business. ERP makes it possible to manage financials, connect suppliers and partners, reliably plan and schedule, and optimize essential manufacturing processes, to name a few. PLM provides the context, security, traceability, and processes needed across enterprise teams and systems to ensure product data is accessible and trustworthy. As such, it enables faster time to market, lower costs, and higher quality products.

As the definition of PLM has broadened along with its impact, many manufacturers are unclear about how to develop and implement a strategy that enables them to derive maximum benefit from both ERP and PLM. PTC believes both systems play critical roles, and that the proper coordination and calibration of these systems can add value beyond what either one can deliver alone.

Unfortunately, some manufacturers make compromises that prevent them from realizing the full benefits of these systems. This is largely due to treating them as standalone solutions that serve different parts of the business. In many cases, manufacturers are forced to take this approach since these systems often capture information using different structures. Recognizing the need to ensure each of these essential systems contain the same information, manufacturers go to great lengths manually entering data to keep the systems synchronized. The potential for errors that impact time, cost, and quality can be significant. Such challenges can uncompromisingly hold back engineering teams from delivering better products on time, contributing to the top and bottom lines.

The Value of Integrating ERP and PLM Systems

While ERP and PLM systems support different business needs, they are complementary. As such, they must be connected for a seamless digital value chain. After all, once a product has been designed and manufactured, ERP helps to manage follow-on activities, including production resource planning and financials. Integrating PLM and ERP eliminates the pitfalls of managing data and processes separately in these systems while ensuring everyone in the company is using the most up-to-date product data.

No wonder more manufacturers are integrating PLM and ERP to improve efficiency and product data quality. While they may be initially motivated by a desire to eliminate data entry inefficiency and the accompanying human error, they realize benefits far beyond that. Integration between the two systems ensures all functions can access BOM data and supporting product development data captured in the PLM system. Plus, since PLM can provide routing and manufacturing process plans, integration with ERP can help link and improve critical upstream and downstream processes. The result of well-executed integration of ERP and PLM is that companies can develop a smooth and ongoing flow of innovations such as new and more highly differentiated products and continuous cost and quality improvements.

Consider these examples of how both ERP and PLM users can benefit from the integration to inform their decisions:

  • Instead of storing PLM/IoT information in ERP systems to drive workflow logic, ERP users can access it directly from PLM. This proves valuable for enabling things such as dynamic 3D and augmented reality visualization, for instance, when factory and service workers need work instructions and sensor readings.
  • Rather than store ERP data in the PLM system, PLM users – such as engineers accessing part cost and quantity information – can access it directly from ERP via integration.

Unlocking the Synergies in SAP and PLM

Many leading manufacturers are already realizing the benefits of integrating their ERP and PLM systems. Let’s explore a few real-world examples where customers have integrated SAP and PLM.

Nidec Global Appliance, the largest manufacturer of compressors for refrigeration, significantly reduced duplicate efforts by integrating Windchill – PTC’s award-winning PLM solution – with SAP. Prior to the integration, developers were forced to separately input their work into Windchill PLM and SAP, doubling effort and increasing the likelihood of mistakes. Moreover, since data in SAP was different than the data in Windchill, people were unsure which was the source of truth.

While this did not disrupt individual project teams, it caused failures at the enterprise level due to the lack of process control, supplier control, and inspection/test governance. For example, a single part could be assigned to two different assembly steps, or a single assembly step could potentially use two different parts. Uncertainty about whether Windchill PLM or SAP was the definitive source of product truth caused delays in delivering products to market. Now, with integration between PLM and SAP, Nidec can seamlessly move designs from development into production since the BOM and related work instructions are in sync.

Vaillant Group, a global market and technology leader in the field of heating, ventilation, and air-conditioning (HVAC), uses several different design and productivity software platforms such as CAD (PTC Creo, AutoCAD, Mentor), PLM (Windchill), and ERP (SAP). Previously, it handled process and data management tasks manually using a combination of spreadsheets and emails. It took significant effort to manually track maturity and approval status of product BOMs, 3D CAD models, 2D CAD drawings, technical specifications and other documents. Moreover, manual search for documents and information within documents was difficult and inefficient. The overall impact was slowed time to market and high levels of rework. In fact, 50% of first physical samples required re-work.

By integrating Windchill PLM with SAP, Vaillant now automatically communicates changes to product data, including manufacturing BOMs, to its ERP system. Workflow functionalities are provided by Windchill and SAP MDG-M with automatic and transparent cross-systems status tracking of changes. Critical functions such as pre-defined rules are automatically generated. Since the integration between SAP and Windchill. where there is a hard link between both approvals in Windchill and SAP, there were no deviations at the start of series production. Further, Vaillant reduced the average process run time by 25% from January 2019 to December 2019.

Bosch Rexroth, a global manufacturer of drive and control technologies, created a simple user interface (UI) that combines parts lists loaded directly from SAP with information stored in Windchill (torque, pressure, etc.). Bosch is using ThingWorx Navigate Apps, which allow users in downstream ERP systems to access Windchill data without transferring or duplicating the data in the other system.

The Bosch Rexroth UI includes an interactive 3D model that supports selecting, highlighting, annotations, and animations. Even non-engineering users can easily create, search for, and download documents in and from Windchill. Moreover, Bosch Rexroth has eliminated the manual effort previously associated with creating mounting documents and collecting all documents associated with a parts list in Windchill.

VCST, a world-class automotive supplier of powertrain and brake components, leverages ThingWorx Operator Advisor App. This specialized app allows access to work instructions from Windchill, ensuring that the shop floor always has 3D-based, rich, and up-to-date work instructions coupled with work order information from SAP. With it, VCST is creating digital continuity across the organization. Specifically, it has improved shop floor execution and monitoring, equipment monitoring, maintenance execution, quality control/capture, and provide guided instructions for a PLM/SAP experience linked to master data management.

As these examples illustrate, by harnessing the complementary nature of ERP and PLM systems, these manufacturers are enabling the digital transformation that gives them a competitive edge. Breaking down the silos between different parts of the business means unlocking the full potential for innovation in their organizations.

If you’re interested in learning more, I recommend you read the whitepaper “PLM and ERP: Their Respective Roles in Modern Manufacturing.”

Tags: Product Lifecycle Management (PLM) Windchill Industrial Equipment Digital Thread
About the Author Mark Taber

Mark Taber is Vice President of Marketing. In his current role, Mark is focused on helping manufacturers drive digital transformation, with a foundation of PLM and the digital thread, within the enterprise and across enterprises.

Mark has more than 30 years of experience working in the areas of process automation, application integration, cyber security, and development. Prior to PTC, Mark was CEO of Active Endpoints (acquired by Informatica), a process automation firm. A graduate of the Wharton School, Mark currently lives in Raleigh, North Carolina.