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
Our world is rapidly becoming a place where big data reigns supreme. Just like a king!
Product lifecycle management is an all-encompassing technology solution for integrating and managing all types of data inherent in the design, development, production, support, maintenance and final disposal of manufactured goods and product offerings.
The ultimate goal of product lifecycle management is to accelerate the entire cycle of product development and improve business efficiency and profitability. In its most basic sense, PLM software is a collaboration tool that facilitates organizations to manage their product information across a wide spectrum of internal and external business processes and functions.
PLM is an integrated system that facilitates the collection, sharing and management of crucial data – a broad-based approach that governs the development of a product right from the idea conception to the ultimate disposal.
One System for Everything: Product Lifecycle Management
The product lifecycle management is a business process management tool that serves as a repository for every teeny little bit of information that might affect a product offering. It is essentially the first place where all product information comes together from different stages of production – be it supply chain, production, procurement or marketing. By consolidating diverse systems in an organization, PLM helps create a coherent data structure to develop, manufacture and retire products.
One of the most compelling benefits of the product lifecycle management approach is to empower businesses to make smart, timely and information-driven decisions at each stage in the overall product lifecycle. Of course, your product development process is unique to your company and a one-fits-all PLM approach might not work for you.
However, like most businesses, your company also depends on the quality of data that is available to make critical decisions on a day-to-day basis. PLM offers a unified, collective intelligence that helps improve the strategic decision-making process, define processes and workflows, eliminate process bottlenecks and accelerate the overall product development process.
Get the benefits that PLM has promised for years
The cradle-to-grave approach of product lifecycle management offers many benefits for companies seeking more efficient, profitable product development, and management solutions.
In the present scenario, PLM has emerged as a single vital source for managing the different aspects of product management throughout the production, development and retirement processes.
It is no secret that faster product development and shorter lead times to market have become the key to marketplace competitiveness and success. With PLM solutions, the product can be developed and finished faster. As a powerful enabling technology platform, PLM applications help integrate people, processes, business systems, and of course data to streamline the product information spinal column for your company.
The innovative technology of PLM enables your business to reduce production and material costs through prototyping, waste reduction and savings through the full integration of engineering processes and workflows. This naturally leads to enhance production efficiency and increased productivity. The robust data analytics tools, such as visual analytics of a PLM application simplify the overall processes, workflows, communications and information flows throughout the production cycle.
It leverages the full potential of integrated business systems and functions across the company, from supply chain to production and from compliance to financial divisions. Product life cycle management solutions ensure more transparency in policy disclosure and the organizational decision-making process.
Acting as a line of a message between owners, managers, suppliers, employees and customers, PLM aids open communication and conversation amongst the various stakeholders. This helps you identify and understand what works and what does not work for your company.
What to look for when purchasing PLM software
When people purchase PLM systems, they essentially invest in technology which provides a wealth of ease and convenience given that the systems are extremely complicated. This is a core reason users often find it difficult to navigate these systems, let alone make full use of all the features it offers them.
When selecting a particular PLM solution for your business, it is important to ensure that it is easy to use, navigate and apply in the various stages of the production cycle.
Another feature to consider is the ability of the PLM software to integrate with and complement readily with the systems and processes already in place at your organization.
The PLM application that you procure from a vendor must come with certain features such as BOM (Bill of Materials) management, reporting and analytics, quality management, change management and product data management.
While these elements help in the overall coordination, tracking, control and management of the various workflows involved in the production, the best PLM software should also offer functionally enabling deeper supplier collaboration, flexibility and accessibility, speed of implementation, environmental compliance and support for existing organizational systems.
PLM Applications for any PLM system
So what are we suggesting? Our solution to an easier way for everyone in your organization (not expert PLM users) to use Windchill and find product data is our EAC Productivity Apps. You can learn more about our EAC Apps on our website.
EAC Product Development Solutions introduces the powerful EAC productivity applications that make it easier for you to view, understand and manage product data.
With one single, simple and powerful interface, you can make better, faster and more effective decisions at your company. Our PLM system applications are compatible with product lifecycle management systems, thereby offering an integrated technology platform for multiple enterprise systems including ALM, MRP, ERP, SLM, CRM, Accounting, and PLM (Windchill). The cookie-cutter PLM solutions by most vendors tend to be overly complicated which inhibit your ability to consolidate task workflows and streamline production processes within your organization.
Our PLM apps work as a connectivity tool, to transform the entire PLM experience. They facilitate user experiences by allowing them to perform functions without prior training, making the PLM interface easy to work with. EAC Productivity Applications provide an added advantage of connecting with a PLM system and altering the user interface, making PLM easy to understand. They have the capability to pool data from many enterprise systems and put it on one screen.
Our goal is to give power to the manufacturers.
We have successfully eliminated the common PLM system bottlenecks and complications by coming up with our own PLM solutions that reduce the bare bones you might experience in run-of-the-mill PLM software and applications available in the market. Our PLM applications were developed to offer you a perfect user experience by improving accessibility to critical data.
With our top of the line PLM apps, everyone can use the system with relative ease and businesses can fully tap into the large PLM investment they were initially promised.
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Why is it important to manage your product Bill of Materials (BoM) in a PLM (Product Lifecycle Management)? This is a tough question to answer across the board for every company, but this article breaks down what you need to know.
The level of BoM management in PLM can be dependent on your companies’ products, downstream systems, and product development processes.
With that in mind, here are some general benefits and reasons to manage the creation of your product BoM in PLM.
The benefit of bill of materials management in PLM
PLM in nature is meant to be a tool to help engineering manage their production date while allowing dynamic collaboration and change control throughout the product development cycle.
The data managed in a product lifecycle management system includes CAD and BoM information, as well as additional supporting product information and documentation.
PLM functionality typically allows an organization to store any and all product information in a structured manner. The structured manner is what properly represents the product within all stages of the product’s development.
This includes everything from initial design requirements, to manufacturing requirements and process plans, to quality assurance documents- all linked to a single product structure.
This gives you the ability to graphically see a truly complete representation of any and all products managed within the PLM system.
In addition, many of the top PLM systems (such as PTC Windchill) give you the ability to manage different views of a single bill of material.
For instance, you could see the design or engineering view of the structure and all design information needed for that BoM product structure.
You would also have the ability to look at a manufacturing view that has the structure defined in a way to support the best possible manufacturing process, while it also links to any supporting information and work instructions.
Additionally, you could see a service BoM that represents exactly what is on-site or on the hands of a customer, with linked product information specifically related to service or support (such as a service repair or product manual).
These systems focus on tracking and managing all cost and profit throughout the process.
Because of this, changes are tightly controlled and require significant steps to ensure proper applications across the system.
There are also few systems that allow for full product representation inside of ERP or MES as outlined above. Nor do they fully support many different views of the same BoM.
ERP tends to only manage what is required to properly manufacture or sell a product, which does not always represent the full product design or its full breadth of supporting information and documentation.
There many impacts on these fundamental differences.
When to use PLM for BoM Management
Here are some general concepts as to when to use PLM for BoM management.
When your product development is in the dynamic phases that require many changes and updates at each phase gate, your bill of materials should be primarily managed in PLM.
If your product requires specific requirements management, detailed manufacturing, quality work instructions, or an intensive manufacturing process, it’s in your best interest to use product lifecycle management for your BoM.
At the very least, all of your product information should also be managed, or linked to your product lifecycle management system to ensure full accountability to all information updates required in the instance of change.
Integrating ERP and PLM
At a minimum, if you have an ERP system it’s important to integrate your system together with PLM.
It’s essential to establish key integration points between your enterprise systems that send needed information back and forth to your enterprise resource planning solution. This will help you properly execute new product releases and changes.
By integrating your systems, your ERP processes will ensure all proper tasks and functions are executed in your ERP or MES systems.
From there, your ERP to PLM system integration would send information back to your PLM system to close the loop.
These are our best practices to help you get ahead and to take product data further. We would love to hear about your thoughts about this topic and answer any additional questions you might have. Feel free to drop a comment below or leave an inquiry under let’s talk.
Looking for an easy way to quickly assess your bill of materials and ensure projects stay on-time and on-track?
Here’s why every manufacturing company should be considering product lifecycle management applications.
Expand PLM software usage throughout your enterprise with PLM apps
Let’s face it, no company uses a single product data management system (PDM) or a Product Lifecycle Management (PLM) system for ALL of its organization’s needs.
Your organization likely uses an abundance of different technology software to collect and store data. These technologies can include customer relationship management (CRM) systems, quality management system (QMS) software, enterprise relationship planning (ERP) systems, application lifecycle management (ALM) systems, and so many more.
If your organization currently uses a PLM system, odds are you most likely paid a pretty penny for it. So why not make the most of that product lifecycle system investment and use your system’s complete functionality?!
Product lifecycle applications support, enable, and enhance the value and footprint of PLM software. PLM Apps go a long away to assist and ensure consistent access to up-to-date product data. They can help expand controlled access to valuable content and give functional groups a single simplified view of files, data, and content all within a single browser-accessible screen.
You’re going to want to invest in these kinds of advanced technology solutions that simplify data gathering processes and expand the value of your PLM investment. PLM apps are meant to help you find data easier which reduces user frustration and helps take productivity to new levels within your organization.
PLM applications, also referred to as PLM system plugins, deliver on the dreams of many organizations. They are a simple solution that drastically increases enterprise PLM usage.
PLM apps integrate siloed data from disparate systems
With the use of multiple complex enterprise systems, your organization’s data is most likely held captive in siloed systems. Many PLM applications help connect these disjointed enterprise systems using common application programming interface (API) connection abilities.
PLM apps simply pull data from other enterprise systems into a new user-interface through API integrations. They don’t rely on interface features from other enterprise platforms or systems (besides the data and information they extract), therefore, they are less likely to be affected by a new release of the underlying enterprise systems!
PLM apps simplify searches for the occasional PLM software user
PLM apps change the user interface (UI) and user experience (UX) of your PLM system so that it’s easier to use. This can be useful for occasional or novice users who can feel overwhelmed by the complexity of their PLM system compared to those that use their PLM system on a daily basis.
PLM applications offer user-friendly interfaces that simplify the complexity of PLM systems and make it easier to search, find, locate, and understand product information. In fact, many of these tools even allow organizations to adjust settings for specific users (such as purchasing, marketing, accounting, etc.) so they can access the direct information they need.
PLM apps Many customers we work with use complex product lifecycle management systems such as PTC Windchill or Siemens Teamcenter. Due to the robust capabilities of these enterprise systems (and other PLM systems), many users find product data hard to navigate – especially if they aren’t daily users within these systems.
PLM apps speed up product development processes by providing users with complete access to real-time complex enterprise data.
Product lifecycle applications really do make PLM easier – see it for yourself by watching this short PLM applications video.
Customize PLM apps without disrupting your PLM software
PLM applications and system plugins offer simple and easy ways to customize enterprise product data systems. A PLM Administrator can customize the apps to conform to their company’s goals and prioritization of tasks without disrupting the PLM software itself.
Time after time, we see organizations add PLM customizations to their mainframe PLM software, only to wind up facing dozens of challenges as new system software versions get released. Because PLM apps are an extension of PLM software systems, they are minimally affected by upgraded software versions and updates (if at all).
PLM apps provide organizations with the ability to easily custom tailor simplified product lifecycle management interfaces or mashups. This functionality provides additional value and integration capabilities with other enterprise systems.
PLM Applications offer a brand-new UI for your intricate product data management system; enabling a fresh and simple user experience. They also have started to help organizations solve problems easier and faster with direct, accessible, and instantaneous insights from data.
Your systems are only as good as how you use them. If employees struggle to navigate your product lifecycle system interface, PLM apps are definitely something you should be looking into!
How PLM apps drive flexibility within your organization
PLM applications provide access to PLM information to employees outside of engineering such as marketing, sales, finances, and procurement.
Access to PLM system data provides another way for teams to identify the broad scale of their day to day activities and information. This can help teams understand and prioritize tasks to be more efficient and productive.
This flexibility allows teams to work the way they want. By enhancing a complex system and tailoring each end-user experience, it’s easy to see how these PLM system plug-ins can drastically improve productivity and drive value across an organization.
What is better than providing every department with product information that they want and need to do their job?!
Want to learn more about PLM Applications and how they could pair up with your current enterprise systems? Let’s have the conversation!
