Snowballs get bigger when they roll downhill. Similarly, engineering problems get bigger if they aren’t caught before product design information is fed to manufacturing production teams. PLM is designed to ensure product designs are thoroughly proven before being released to ERP. Assuming product information is good, there can still be problems if ERP isn’t set up to receive PLM data. Indeed, unless there was an overall governance plan defining all product data and processes, it’s inevitable that ERP will use different data structures, different forms, tables, and process conventions, then PLM. When this happens, the potential to have automated digital transfer of product data from PLM to ERP and back is compromised. While the two systems must work seamlessly together, PLM should be implemented first in order to ensure accurate product design and manufacturing data downstream.
PLM preserves the integrity of the design
Engineering defines the product, and Manufacturing makes it, so ERP depends upon PLM for accurate product information. Since product information, held by the PLM, is transferred to ERP, ERP can be thought of as being “downstream” from PLM. This means that PLM must define everything about the product before manufacturing begins.
Product definitions may undergo frequent change, mostly during product development but sometimes after the product is released to manufacturing as well. A typical definition might include:
- Customer requirements documentation including performance acceptance criteria
- Engineering specifications
- Sourced supplier content
- Manufacturing drawings
- Quality Management KPIs (e.g. surface finish, tolerances, etc.)
- Product baseline from which product variants are built, forming product families
- Engineering BOM
- Manufacturing BOM
- Final product performance testing
This information must be organized in a structured data model. This is necessary to preserve the integrity of the design and manufacturing records. PLM is an excellent tool to define and manage these structures and the complex relationships built into them. Whereas, ERP is an excellent tool to manage manufacturing tasks such as work throughput load-balancing, task allocation, people and equipment scheduling, inventory supply/demand synchronization, and mBOM management.
PLM and ERP must work closely together
Take this simple nut, bolt, and washer for example. Customer requirements determine the choice of the bolt. The bolt determines the choice of the washer and nut. Assuming the bolt secures two brackets together during the assembly of a product, then clearance holes must be drilled in the brackets to allow the bolt to pass through. PLM manages all the information about the product, including details about the nut, bolt, and washer. ERP will then manage everything about the parts to be manufactured including the drilling process. If the design changes and larger bolts are required, for example, then a larger clearance hole must be drilled in the brackets. PLM will issue a design revision to ERP. ERP will manage the action to drill the larger hole and order appropriate inventory to accommodate the change. But rarely is it this simple because changes like this usually occur after the product is already in production, and under management by ERP.
What should happen if PLM presents a new revision to ERP, and the affected product is already in production? Should ERP freeze production? Should existing products be scrapped or manufactured with a recall instruction? Should the mBOM record in ERP be overwritten by PLM or should it automatically be accepted and its number incremented to that which is issued by PLM? The answers to these questions aren’t obvious without knowing the consequences of the changed holes, and the details of the product being manufactured.
In addition to a simple change like this, other events are common. Each of these cases would be very problematic if ERP didn’t rely upon PLM for its product information. ERP needs timely updates on:
- Changes to a product design, such as sourced content or revision numbers
- New Product Introduction (NPI) dates
- Changes that impact one product of a production run of many (where they were all initially the same product)
- New quality inspection measurement criteria
- New design requirements or design revisions
- Additional post-production processes required (e.g. burnishing, annealing, sealing)
Without PLM you risk costly errors in production
If you purchase an ERP before getting your PLM in place there are risks to consider:
- Changes to products won’t be automatically reflected in an ERP system. A single change to an already in-production design could affect hundreds of associated parts, components, and documents. There’s no simple way to understand the consequences of that change in an ERP system without PLM feeding ERP timely information. Manufactured products may not be accurate to the original design or reflect the product’s true cost and delivery schedule. PLM includes Change Management to help carefully review this information, anticipate the consequences, and ensure the right people make informed decisions at the earliest time possible.
- Supply issues might not get back to designers in time. If your suppliers are out of stock or delayed and you need to change a component, such as a washer, in order to get your product to market in time, you need to alert the designers. For example, changing the size of the washer order in your ERP wouldn’t be reflected in the design or BOM. Without a PLM to monitor component changes and supply, you won’t be able to update the design quickly. The wrong materials might be ordered and lead to further delays in production and a potential need to reorder other components later.
Systems are essential to developing accurate processes
When we say PLM should come first, we don’t necessarily only refer to the sequence of installation of PLM and ERP. The critical thing is that PLM be the master of all product definition information spanning: effectivity dates, revision numbering, product structure, item/part/product numbering definition, change management, BOM, and document management.
PLM must flow this product information downstream into ERP. This brings confidence and enables high-performance processes to integrate product information efficiently. With a digital PLM-ERP backbone in place, sophisticated concepts such as “product baselines” and “closed-loop” digital threads can be utilized to create families of unique products based upon a common source. This allows for efficient change management and lowers the corporate debt associated with unnecessary parts and SKUs. Systems, not people, are essential to maintain accurate repeatable, end-to-end processes.