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Making PLM and ERP work together
12 July 2010
Focus on the strategic issues; don’t get sidetracked by integration mechanics, says Luciano Cunha at To-Increase.
Just 25 years ago, American Motors Corporation (AMC) was seeking a way to shorten product development cycles. Its motivation: the need to compete more effectively in the global automotive marketplace. To help meet this need, AMC (subsequently acquired by Chrysler) devised a management/control/communication system that helped resolve design conflicts and reduce engineering costs. Reflecting a nice touch of forethought, the solution also worked with a new software application called computer-aided design (CAD). AMC’s creation eventually helped Chrysler become the auto industry’s lowest cost producer, with costs running at less than half the industry average.
Fast-forward 25 years. The work pioneered by AMC has matured into product lifecycle management (PLM). This solution has become a mission-critical component for many manufacturers, and it continues to broaden its potential impact across the manufacturing enterprise. As it does, manufacturers now ask themselves what the role of PLM can be and how it should work with their enterprise resource planning (ERP) systems to collaboratively drive operational excellence.
PLM and ERP have never been more relevant than in today’s tough economic climate. Manufacturers all over the world aspire to release products to manufacturing more efficiently, coordinate change processes more smoothly across the supply chain and streamline product development processes. They are eager to leverage software tools to minimise costs and improve their bottom lines. Best-in-class companies are therefore more likely to have an integrated PLM and ERP infrastructure; going beyond CAD data in PLM and financial reports in ERP.
Combining the two, however, can raise a multitude of mechanical questions. Trying to decide which system should be the system of record (SOR) for certain pieces of information is just one example. Disagreements may arise about which system should drive data for common components such as products, parts, item costs, product graphics or item specifications. Some manufacturers may wrestle with more mysterious issues such as who owns the eBOM, mBOM, as-built, as-maintained, as-configured, or as-installed BOM. Getting caught up in the mechanics of integration though can block the path to realising the strategic benefits.
The bottom line is that processes need to operate seamlessly between PLM and ERP systems. To-Increase helps organisations running Microsoft Dynamics ERP to integrate with their PLM systems. This offers important benefits such as exposing all PLM specifications to material substitution planning at the start of manufacturing; comparison of multiple product BOMs or eBOM versus mBOM; establishment of product readiness controls; and gaining visibility into which sales orders will be impacted by a change order. Recently, in an effort to expand on its offering and help its customers achieve true PLM and ERP integration, To-Increase entered into a strategic partnership with PTC. Speaking at the To-Increase launch event in Malta, David Boulet, director of Global Microsoft Alliance for PTC said: “Deriving value from the right tool is critical and can be achieved by leveraging best-of-breed systems such as PTC’s Windchill and Windchill Product Point, and To-Increase Product Engineering and Engineering Change Managementfor Microsoft Dynamics.”
He concluded: “Bringing PLM and ERP closer together with rich, process-based integrations will help customers derive more value from both systems. Joining forces with like-minded partners, like To-Increase, will help assure this.”
This article first appeared in the Summer 2010 edition of Prime.