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War between PLM and ERP – Who will win

War between PLM and ERP – Who will win

Every product irrespective of its type and business value has a life cycle which it goes through. The life cycle starts from the inception of the product passes through designing, development, manufacturing, service phase before reaching the final phase of disposal.  The process of managing the life cycle of any product is known as product life cycle management.  PLM is therefore a business activity that integrates processes, people, data and business systems to frame a backbone of information for the product and enterprises involved.

With the advancements and innovations in technology, PLM has become the driving force behind the experiments and expansions of businesses and products across geographical regions. Such circumstances bring to fore the role of information systems in every business irrespective of its size and type. The present technology enabled business world showcase that in today’s scenario product life cycle management or PLM is one of the four cornerstones of industry’s IT structure, the others being supply chain management, enterprise resource planning and customer relationship management.

At PROLIM, we have been discussing with many of our PLM customers ranging from Automotive to Aerospace to Consumer Packaged Goods. In many cases the customers in pure IT Organizations getting confused over the entire Enterprise Automation.

PLM and ERP: Who will win?

While supply chain management maintains the logistics handle, enterprise resource planning (ERP) is a system used in business environment to manage the financials which includes accounting, sales forecasting, manufacturing planning execution besides providing support to customer care. ERP systems though carry out varying features and functionalities, such as planning out orders that need to be manufactured or outsourced, tracking inventory levels, production and delivery it gives accurate financial reporting based on profitability factors and real time financial status.

In today’s technology based business environment PLM and ERP systems have distinct purposes with an increasingly overlapping capabilities and processes. While PLM Solutions focuses on virtual product creation, digital manufacturing, innovation, virtual construction, product and plant simulation, project engineering and product compliance ERP is focused on the physical product. However, these systems are not interchangeable but together can bring in improvement to the business initiatives and yield better benefits. Hence, neither ERP nor PLM replaces each other.

The five pillars of product life cycle management that will strengthen the business are:

  • Business Processes
  • Product Data
  • Information Systems
  • Organisational Change Management
  • Project/Program Management

In any business, the primary areas where PLM process are involved are

  • Systems Engineering
  • Product And Portfolio Management
  • Product & Engineering Design
  • Manufacturing Or Development
  • Process Management
  • Product Data Management

Though PLM application is not a necessity, the changing technologies and increased complexity of today’s business environment requires rapid execution of the processes. Use of PLM systems will help the enterprises in managing the complexity of production related challenges brought forth by the global competitors.  Here is the PROLIM”s Enterprise Automation Model that we successfully implemented at our global customers.

A PLM for the information systems of any enterprise helps manage the product data including matters like the bill of materials, approved list of manufacturers or even product files. With an aim towards long term benefits, this paves way for innovation and waste reduction and ERP works towards cost reduction.  Moreover, the PLM Advisory system enables the enterprises to track any changes to the information provided for any products and communicate the same to the supply chain system. With information systems becoming the communication vehicle for any business, the PLM functions provide the ability to centrally manage the product information through Computer Aided Design (CAD) Applications, Computer Aided manufacturing (CAM) and product data Management (PDM). An integration of all these tools with the processes and people will help enterprises to easily manage the various stages of a products life cycle.

The bi-directional integration of PLM and ERP leverages on the strengths of the project life cycle management.  An ERP system can work efficiently only when an effective PLM is in place. A business cannot run on the ERP system alone. Implementing a good project life cycle management system will go a long way in helping the enterprise to accurately manage the product information. Running a business with solely an ERP system will result in a gap in the manufacturing process. By implementing a PLM system beforehand, organizations can be confident that the product information will be accurately managed and the ERP system is working fine.

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