If you receive errors when attempting to view this white paper, please install the latest version of
Adobe Reader.
" Omnify Software provides innovative, business-ready Product Lifecycle Management (PLM) solutions designed to meet the needs of Original Equipment Manufacturers (OEMs) and Electronics Manufacturing Service (EMS) providers."
Source : Omnify Software
ERP and PLM: Defining Their Roles and Creating a Collaborative Environment for Success
Enterprise Resource Planning (ERP) is also known as :
ERP Selection Tips,
Select a ERP system,
ERP Evaluation,
ERP Evaluation and Selection,
ERP Selection Criteria,
ERP Selection Checklist,
ERP Process Implementations,
ERP Integration,
ERP Software Development
ERP Operations
Enterprise Resource Planning Software.
Manufacturers' business needs have changed significantly over the past several years, evolving the roles that
technology plays within the manufacturing process. Two key technologies, Enterprise Resource Planning
(ERP) and Product Lifecycle Management (PLM), have developed into critical success factors for
manufacturers. Each technology brings unique value to the enterprise, and when combined, ERP and PLM
provide a wholly collaborative environment that has a major impact on successful product development
performance and the ability to maintain a competitive advantage.
ERP and PLM address different business needs for manufacturers. There is some confusion in the industry
as to what role each system plays in a company's business process. Clarification of the key features of ERP
and PLM, where they fit in the product development and manufacturing process, and how integrating these
environments can deliver positive results is important for manufacturers to truly understand why each is so
critical to their success. In addition, having this clarification will help manufacturers maximize the functionality
of each system and gain the most from their investment.
Synchronization of Information
It is the integration between ERP and PLM systems that allows direct sharing of engineering and
manufacturing data through an automated process. It eliminates the tedious and error-prone task of handentering
information, resulting in improved data integrity across the organization. An integrated environment
decreases redundant efforts and guarantees that all departments involved in the product development and
manufacturing cycle have access to current and accurate product data. By synchronizing these two systems,
engineering teams are able to access business-level data from the ERP system to support better design
processes and manufacturing is ensured receipt of the most current design information for more efficient
production processes.
ERP, integrated with PLM, reduces data duplication, speeds product development cycles and improves new
product turnaround time, enhancing the overall process in getting products to market and ultimately sustaining
a company's competitive position.
Case in Point
Understanding the importance of creating a cohesive environment between ERP and PLM was quite clear for
a leading developer of enterprise servers.
The company was running into data inaccuracies due to manual processes and disparate product information.
Engineering, operations, document and quality control team members were each tracking their design and
operations data manually and in separate databases. Synchronization of these databases was a time
consuming task and proved to be a considerable strain on resources. The manufacturer had an ERP system
in place to manage all of the operations-centric business activities such as financials, purchasing, planning,
and work orders. But the ERP system did not address their engineering design requirements. The
manufacturer lacked a system that understood revision control and engineering change processes. In order to
gain control of their product design and eliminate disparate product information, the manufacturer purchased
a PLM system.
A PLM system is designed to manage the full gamut of engineering information in a single location through
the many stages of a design. The enterprise server manufacturer used the PLM system to manage the
lifecycle and all revisions of their Bill of Materials (a listing of components used in a product), provide revision
control of engineering documents (such as assembly drawings, schematics, and datasheets), electronically
route approvals for New Part Requests (NPRs), manage and automate their Engineering Change Orders
(ECOs), and control Approved Manufacturer's List (AML) changes. More importantly, the PLM system helped
bridge the gap between engineering and manufacturing. By providing direct data sharing with the ERP
system, any changes made in the PLM system were automatically uploaded to ERP so that engineering and
manufacturing were always in synch.
Creating a collaborative product development ecosystem by integrating their ERP and PLM environments
helped the manufacturer to completely eliminate manual synching of engineering and operations information,
greatly improving data integrity and use of resource time. Previously, more than 35% of one person's time
was spent ensuring that the engineering and operation databases were synchronized (a manual process
requiring changes made in both places). With direct data sharing between their ERP and PLM environments,
the need to perform such maintenance in both systems no longer exists.
The ability to directly share data between the two environments and pull information from ERP into the PLM
database gave engineers visibility into extended information including cost, inventory, vendor status and lead
times. Access to this type of information allowed engineering to perform analysis on cost, product availability,
and compliance early in their design/development cycle, helping make better design decisions and eliminate
costly late-stage re-design.
Understanding the function of each technology (ERP and PLM) and the value each added, positioned the
manufacturer to focus on their core competencies, cut new product introduction time in half and beat their
competitors to market.
ERP-Managing the Business Data
An ERP system is a business management tool used to fulfill the needs of many facets of a company
including; finance and accounting, distribution, human resources, customer service and manufacturing. ERP
supports these various departments by delivering improved processes such as an automated method for
order fulfillment, providing a single location for tracking cost information to ensure consistency, and helping
human resources to standardize their information.
ERP is used to manage the logistics of getting a product to market once a design is released (from
engineering). It is geared toward capturing information at the manufacturing stages of a product; prototypes,
production runs, redesigns, etc. This information typically consists of a Bill of Material (BOM), manufacturing
and test procedures, schedules/timelines, and logistics which is then used to execute the entire manufacturing
process.
Due to the inherent purpose of an ERP system, many are not designed to manage the amount and type of
information required for engineering. Most of systems do not contain the detailed information that engineers
need to drive design including part specifications, design and test notes, and vendor supplied documentation.
In addition, ERP systems typically do not provide the security or capability to enable external manufacturing
partners to directly access product data and participate in development processes.
As mentioned above, the enterprise server manufacturer leveraged their ERP system to manage all of their
business-centric information such as inventory management and purchasing processes. When they wanted to
achieve control over all of the design and development information, the manufacturer turned to PLM
technology.
PLM-Managing the Product Data
PLM was designed to manage product data throughout the product life cycle. A PLM system is crucial during
the design phase, where engineers need instant access to product data including specifications, engineering
parameters and documentation. PLM centralizes all of this information for easy access by all team members.
PLM tracks and manages component data, BOMs, product documentation, engineering changes and
revisions, as well as compliance data. PLM systems also offer the flexibility to support the many iterations of a
design before it reaches the prototype and manufacturing phases.
A key component of a PLM system is that it provides an automated Change Management facility that allows
users to electronically propose product changes (redlines) to BOMs, documents, and vendor/supplier
information. Leveraging a workflow engine, these changes are then automatically routed to the appropriate
resources for electronic signatures. Once all constituents have approved the change, the PLM system
automatically updates the affected products with the suggested changes, and then provides the updated
information to the ERP system. An electronic change process eliminates manual data entry errors,
streamlines routing, and allows all involved resources to view and sign changes simultaneously. All of these
factors results in a significant reduction in the engineering change process.
Automating product design processes can enhance overall product development by shortening cycle times for
engineering changes and new part requests, improving data integrity by eliminating the human error from
hand-entering data and ensuring all product data is accurate by sharing information between engineering and
manufacturing.
With a PLM system in place, the manufacturer referenced earlier now has all of their engineering information
under one umbrella. By eliminating the need to manually define changes, their engineering change process
has been reduced by about 30%. Once a change is released, this information is automatically uploaded to
their ERP system, ensuring both systems have the most current information.
In Summary
It's never easy to adopt new enterprise technology. It is important to understand the value that the technology
brings to each department and the enterprise as a whole. Enterprise applications that complement each other
like PLM and ERP play a key role in supporting and improving product development and achieving bottom line
operational benefits. Recognizing the distinctive features offered by ERP and PLM as well as the benefits of
creating an integrated environment will help manufacturers maintain their competitive edge. Adoption of a
PLM system to work in conjunction with ERP greatly enhances a manufacturer's product development
performance. The result is the ability to deliver higher quality products in less time and maintain a competitive
advantage in the marketplace.