At PLM Ecosystem we believe that Product Lifecycle Management (PLM) should be implemented before Enterprise Resource Planning (ERP) whenever possible. This ensures that engineering remains the master source of truth and only the latest product information is passed downstream into ERP for manufacturing. If changes to product records are only made under ERP’s management, there is a high risk the as-manufactured product will differ from the as-designed record, making it problematic to maintain and update throughout the product’s service life. There are also risks of the following: the product not meeting its specification, duplicated or redundant work, manual corrective actions, and costly errors. Read why in our previous blog post.
PLM and ERP must also work seamlessly together. Traditionally, a Systems Integrator (SI) would be engaged to configure a connector between the systems and incorporate business logic. This ensured the right actions and protections were built into the product manufacturing process, but it was time-consuming and costly. Today, manufacturers need to be much more agile and avoid funding complex consulting projects to connect PLM to ERP. Cloud-native solutions offer a much simpler solution. They provide manufacturers with out-of-the-box (OOTB) tools that can be connected simply with a single click.
Lengthy consulting engagements were traditionally needed to construct a digital bridge between PLM and ERP
PLM and ERP solutions are fundamentally different. PLM solutions are architected to help product engineers manage their product designs. Product structures have high complexity, incorporating hundreds or even thousands of components. But the number of transactions a PLM solution handles is relatively low at any one time. ERP solutions are architected to help manufacture products one component at a time but in high volume. The single product structure from PLM gets decomposed into its most basic components for manufacturing purposes by ERP. While they have very different characteristics, as described here, both solutions are vital for designing and manufacturing quality products.
Getting the right information to flow between PLM and ERP has been challenging. Consulting engagements were required for business studies and to match up the different tasks and data fields to build the digital bridge between legacy on-premises applications. According to one report, “an ERP implementation can cost anything between $150,000 and $750,000 for a mid-sized business”. Not only did this add to the costs for getting a product to market but engineering and manufacturing teams continued to work in silos. This led to gaps, rework loops, manual touch, duplicated tasks, incomplete master data management, and consequently quality and time to market issues.
Today’s engineers need greater flexibility
In today’s globally connected world, it’s no longer an option to spend months integrating PLM and ERP systems. It’s imperative that the way information is presented by PLM to ERP through dedicated bridges is flexible to support frequent change. Product life cycles are getting shorter, especially for hardware and electronic products, and these products rely heavily upon external global suppliers to provide sourced content. A flexible digital bridge is necessary because hardware products have these characteristics:
- Short life span because of ever-changing price and performance ratio
- Short lead time from engineering release to production manufacturing
- Smaller production volumes
- Product portfolios configured from product baselines
- Supply chain shortages and changing workforce
- Production run intercepts
- Product packaging variants
- Unique configurations tailored to individual customer’s preference
Product designers and manufacturers need a more flexible way to work and an easier way to share information between PLM and ERP. The connector must be flexible to adapt, without interruption to production. The table below shows how PLM and ERP work together to manage complementary tasks. PLM is the engineering product master. ERP is the product manufacturing master. PLM issues product information and ERP acts on that information.
Unless the PLM to ERP connection has sophisticated business logic and is all-digital, inefficiencies creep in, people become the connection governance, and the risk of errors rises. Quality and efficiency suffer when data transfer relies upon people.
Cloud-native PLM and ERP tools provide flexibility without sacrificing intelligence
Organizations increasingly rely upon easy-to-use OOTB cloud-native software to lower cost, improve flexibility, and gain industry best practices. With advances in cloud infrastructure, phrases such as “easy to use” and “out-of-the-box” don’t have to mean unsophisticated. Solutions built upon Google Cloud are even more powerful and intelligent than the systems they replace. They incorporate performance and security guarantees, ITAR compliance, and backups, which used to be the responsibility of the application software company and the end customer IT staff. In addition, Artificial intelligence (AI) algorithms can perform mundane tasks and reduce tedious button clicking.
PLM enables a single-click connection to ERP
Manufacturers face a challenge. To survive, they must be globally competitive, flexible, and efficient. Expensive, custom connectors linking PLM to ERP have proprietary business logic built in. With help from consultants and SI’s, manufacturers have changed the software to reflect how they want it to work. This unintentionally perpetuates old ways of doing things but rarely are these the best ways, especially as time goes by. New, rapidly growing manufacturers approach software solutions differently. Since they don’t have enough history to know which ways are best, they rely on the leading cloud-native OOTB solutions as progressive industry professionals. These manufacturers adapt to how the software works because velocity and cost are business imperatives.
PLM Ecosystem has engineered a new approach for connecting PLM to ERP with an advanced connection hub. The hub has built-in logic and integrates with both systems. Using AI and active listening algorithms on each side, PLM connects to ERP with a single click. For example, when a new BOM revision is released by PLM to ERP, ERP data fields are automatically populated with the updated information. ERP’s business logic prevails from then on. To take advantage of this level of automation, PLM Ecosystem recommends the following three-step process:
- Pause, step back. Consider which engineering to manufacturing processes, forms, templates, and approval stages are critical to keeping, and which could be replaced with OOTB best practices.
- Choose a team or business unit with openness to change. Pilot PLMES’s PLM to ERP connection hub with a team who already uses cloud-native software. Verify that the OOTB workflows support the engineering to manufacturing processes (while anticipating that they are different).
- Measure success. Decide which Key Performance Indicators (KPIs) are important to the business and so should be measured. Example KPIs include:
- Cost of integrating PLM and ERP
- Cost of maintaining the PLM to ERP integration
- Reduction of rework loops, manual touch, tasks and actions, duplicated tasks, delays, number of staff involved in PLM to ERP data flow, and product recalls
- Accuracy of product margins, NPI dates, and planned inventory levels
- Accuracy of master data management. As-designed matches the as-manufactured product.