Product Lifecycle Management vs Enterprise Resource Planning

22 September 2016

Bob Hillier shares the best practice for companies caught up in the Product Lifecycle Management vs Enterprise Resource Planning debate and argues that the future is about collaboration rather than rivalry

Take the human body with its 600 muscles and more than 200 bones. Although the muscular and skeletal systems fulfil separate functions, they also work together to facilitate movement.

In many ways, this analogy describes how Product Lifecycle Management (PLM) and Enterprise Resource Planning (ERP) operate within a manufacturing company.

PLM manages the innovation and design process, while ERP ensures quality products are manufactured in a timely, cost controlled manner once a product has been engineered and approved.

The capabilities of PLM include the management of design, engineering and simulation data, Engineering Bill of Materials (EBOM), as well as materials and export compliance and quality and document management.

ERP is normally used for manufacturing resource planning, HR, purchasing, inventory management, order management and accounting.

So, despite what some industry voices may say, it can be argued that PLM and ERP actually enhance collaboration between engineers, operations and suppliers.

Both systems have distinct purposes, but they also have a number of overlapping capabilities, which is where some of the confusion can originate. However, there are practical reasons why ERP and PLM can work harmoniously together, improving the end-to-end business performance.

In fact, combining the two has already proven to be necessary, with some ERP providers acquiring or developing their own PLM platforms.

According to an IBM study, 97 per cent of mid-sized companies are already running an ERP application. This is because ERP was the first to establish itself as an essential business tool, however without PLM the ERP system is likely to consume and manage inaccurate data from design and engineering, which delivers minimal or no improvements to the business.

PLM as a priority

PLM software is developed specifically with the total product definition in mind.

PLM delivers complete configuration control of product data from all stages of development, from initial concept, through to design and production; to include complex product and materials data, associated files, issues and engineering changes.

PLM is also designed to communicate engineering changes to the entire business and supply chain in real time. Put simply, PLM is all about product development — the very first stage of the manufacturing process.

This makes PLM a building block for any company that designs and manufactures its own products, or manufactures to print.

PLM software also provides the single point of product truth used by ERP to manage product resources and fi nancials. For example, by using EBOM data from the PLM system, ERP can accurately generate purchasing and inventory management records, enabling seamless management of both resources and production.

Ultimately, an organisation that implements an ERP system without a complementary PLM system risks mismanaging product changes and therefore conducting inaccurate financial planning. Without accurate PLM data, the ERP system becomes Sisyphean.

In an ideal world, companies should not have to choose whether a PLM system is required to complement their ERP investment. Instead, they should be focussing on gaining the benefits of the seamless integration of the two. Industry’s huge uptake of ERP demonstrates the importance of the software, but PLM remains the undisputed king of product development. When used together, the combination of systems can give an organisation seamless control of its manufacturing process.

Intergrating PLM and ERP

When implementing PLM software, one of the most important considerations is integration into existing systems, to fully deliver accurate product data to all consumers irrespective of the platform they are using.

Although many older ERP applications remain, with older technologies for data integration, there can still be success when attempting to move data from PLM software into the existing ERP — and vice versa.

Despite the perceived rivalry between the two systems, we are seeing new partnerships and collaborations between PLM and ERP providers to ensure seamless communication between the two systems.

At Design Rule, we have integrated the Dassault Systemes 3DEXPERIENCE PLM platform with Columbus Global Microsoft Dynamics AX ERP. This helps our clients align their product design to wider operations management supporting a single source of truth.

Winning combination

In today’s competitive environment, manufacturers face increasing demands to deliver the right product, with zero defects, on time and in budget.

Meeting these requirements often means short design and product engineering cycles. Providing a single source of truth, a successful combination of PLM and ERP can aid the seamless delivery of products from design conception, right through to manufacturing and distribution.

Admittedly, there are many cultural and technical challenges to overcome before the integration of PLM and ERP becomes seamless. However, as this age-old rivalry turns into collaboration, industry will start to reap the benefi ts of integrated PLM and ERP.

And just like the world’s best athletes, companies will start moving faster and become stronger.

Bob Hillier is the managing director of Design Rule, a supplier of PLM services to engineering, technology, consumer products and other global high spec industries.

For an example of the work it gets involved in, click here

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