Innovation On The PLM-ERP Edge

January 30, 2010

This post was born as a consequence of on-going conversation with Jim Brown of TechClarity. Jim and I have a long history of discussions on different topics offline, and we are in agreement on many of them. However, in spirit of what Jim called “healthy debates”, I’d like to open our conversation online. I’m sure it will be beneficial for us, and I hope you will find it interesting and practical in the context of thinking about strategy for PLM and ERP implementation planning.

If you haven’t seen our previous posts, I’d recommend you to go and read them first in order to have a taste of context:

PLM vs. ERP – Don’t Manage Innovation!

Mythbusting PLM/ERP Integration

PDM/PLM and ERP are two topics and domains that continue to magnetize huge amount of the attention. In my view, it was true for the last 20 years, and it continues to be true these days too. In the spirit of getting away from three letter acronyms (TLA), I’d like to put below one of the best references on the way to present discrete (or manufacturing) concurrent engineering positioning from the David Ullman’s book: The Mechanical Design Process.

What I like in this process is that it clearly presents the level of the connections in manufacturing enterprise, including logical dependencies between three major domains – Design, Production and Business.

ERP and PLM Domain
In my view, PLM was born in the middle of the Design domain, in the beginning as a system to manage Product Form (CAD) and lately by systems and modules to manage materials (BOMs), functions and facilitate connection with outside domains. The best example I can bring here is the ability of PM to connect market requirements with business needs. If you will ever have a chance to see a successful integration between business/market models (i.e. Sales Configrator) and PLM, you can see how it can be beneficial. So, within the time PLM outgrows Design domain and spread out into some functions related to production and business. In parallel ERP, was “an accounting child”, born to calculate, forecast and provide clear answers on how health your business can operate. Started from Sales, Finance, Prices, Costs and Risk, followed by successful development of MRP and MRP-II topics and, finally, becomes ERP as we know it today.

Roles of PLM and ERP
As every healthy business systems, both ERP and PLM are trying to grow and Production Domain is an obvious common target for both PLM and ERP. Since PLM came from managing the form and materials in product design, the ability to manage product and work-in-process data are much better compared to ERP. At the same time, ERP holds very strong on the ability to mange operational environment. In the very competitive business environment, both domains failed to collaborate successfully and, instead of taking route to manage openness and process transparency moved to the “marketing excellence” by starting to invent slogans like innovation and execution. But, unfortunately, devil is in details and after agreeing about “roles” and “focuses”, you will get back to bits and bytes of design data, EBOMs, MBOMs and processes that span across the organization.

ERP Business in PLM
With the clear competition state of mind, ERP vendors are trying to push technical limits of ERP foundation to manage product design and work-in-progress design information. As much as they come to the business having fewer design roots design roots, the chances to successfully stretch ERP data models and infrastructures are more successful. When you almost cannot see automotive OEM or supplier that decides to manage design product configuration in SAP PLM, you probably will be more lucky to see high tech and telecom companies managing product engineering and manufacturing BOM in ERP. Also, companies tried to reduce the cost of “process management” by concentrating it inside ERP process infrastructure.

Border Between PLM and ERP
I think, to define the right border between PLM and ERP is a very complicated task. I’m almost sure, the results will be very different for various companies even in the same domain. There are lots of factors such as existing systems, implementation, history, legacy stuff, new projects. You can find companies pushing towards implementing CAD/PDM bundles and move process oriented environment towards ERP. You may see companies that put PLM as a global product development environment worldwide, while ERP is local and specific for business in the specific countries. So, I’m sure there are some patterns we can discover. However, try to establish this boarder will be heavily overused by marketing and competitive efforts and in the end will be disruptive for industry. I think PLM and ERP need to establish some common infrastructure and maybe be even open initiatives that can simplify the exchange of the information and process flowing between systems in the organization.

What is my conclusion today? PLM and ERP are a very complicated topic. There are multiple levels of influence starting from completely technical, moving to IT-related  and ending up with very emotional aspects. I hope Jim and I helped you to navigate and find your path in your future PLM/ERP projects.

Getting back to Jim’s post, there is one topic left- innovation. I want to touch it in separate discussion. I will call it my “Golden Eggs Innovation Strategy”. Stay tuned :)…

Best, Oleg


It was good to see the same day Joe Barkai (twitter @joebarkai) from IDC Insight joined our discussion with Jim on twitter and IDC blog: ERP vs. PLM: Debating The Wrong Question?

…So now we are debating PLM vs. ERP.  Some of these discussions have a very strong, and, in my opinion, incorrect undertone of IT architecture debate: who owns what data repository, where are the boundaries, what are the integration points, and so forth.  One blog discussion attempts to separate ERP as the “execution engine” from PLM, which is “innovation focused.”…


Who Can Generate 3D/PLM Content For Apple iPad?

January 28, 2010



Well, it happened. Apple stretched up iPhone in size, removed camera and phone features. So, we have iPad now. What does it mean for people that live design and manufacturing word? Below are some of my thoughts about that. Since, I haven’t had chance to keep it in my hands yet, I cannot say for sure. But it looks cool. Technical characteristics seem reasonable for device you don’t know exactly how to use. When all my work is on cloud/server/laptop, I don’t know what will be justification to have up to 64GB flash.

Let think about what is the possible implication for 3D/PLM world. This device is not for design. Absence of a camera creates some limitation for the application like 3DVIA Mobile and all other applications that want to merge physical and virtual life. This device is probably too expensive to be used on the shop-floor and manufacturing. Potentially, I can see iPad can be used instead of slim laptops, for reviews and by mobile users.

So, do you think iPad life in PLM will be limited? No, I don’t think so. The opportunity will come when we will start generating content that can be easy consumed by iPad. Today, most of the content in design and manufacturing is tuned for desktop computers – CAD and other design systems are desktop oriented, data management and process oriented systems are, for the best case web oriented. What should be done to make this change and make a content to be consumable on iPad?

Think Content
Let’s start thinking about content around us. Design, Simulations, Bill of Materials, Project reviews, Change requests. How to get this content on such a cool device like iPad? Content will be the major driver for people to start using it.

Think Cloud
Today most of the information is somehow located in our desktop applications. Even when we have the data management system (EDM, PDM…), these systems bring information to your desktop and this is becoming a place where we can consume it. We need to re-think it and move to the cloud (public, private… It doesn’t matter- just go away from desktop). In this case, we will start thinking about how to consume it on different devices according to our needs.

Think Mobile
The main benefit to be in the office is to speak with people – not to be connected to the network. You need to be able to connect to network anywhere and get content you are looking for.

So, what is my conclusion? There is a long way to go, but I think PLM needs to think about content. It will allow long life for IP, we generate with multiple devices. Devices will come and die, but content will be forever with companies that create it.

Just my thoughts.
Best, Oleg


Do We Need Reporting Standards in PLM?

January 27, 2010

I want to raise discussion about reporting in PLM. We don’t see it much in marketing materials about PLM. I asked myself why? Maybe in there is no need for reports? Maybe the way to present report is obsolete and people are interested to see information by using normal UI of PLM and other systems? If it is so, why so many customers are in love from their “PLM Excels” with all information presented in cells and rows? My hunch is that we have a problem here… Yesterday I had chance to read blog by Joe Barkai about PLM and Sustainability, which led me to some reporting standards initiatives. So, it was a trigger to investigate it more in deep.

Reports in PDM/PLM systems
In my view, reports in PDM and PLM systems are on the very primitive level. Technologically, they seem as an obvious and during evaluation, customers, are ending up by the conclusion that all is possible, and they can extract, re-format, modify data when they will be a real need to do so. However, in practice, reports are rarely coming to the agenda of implementers (correct me, please, if I’m wrong), since normally, they’re so much other things to do…

Hidden Loss
The problem, I see that absence of reporting capabilities is not allowing to the customers to get information about a product in a timely manner and in a readable form. When user interfaces are complicated, most of the users that might be interested to see information, actually cannot put their hands on it.

Is there a place for Reporting Standards?
I don’t see any standard activity in this place, for the moment. However, getting back to IDC blog post,  as much as we can see growing regulation activities, I’d expect increases in potential to establish reporting standards. So, requests for reports will come from regulators. In these case , regulations, will play a role of the trigger in establishing of reporting standards.

What is my conclusion? In my view, reporting capabilities are undervalued by PLM systems today. PLM vendors see reports as a commodity with low value. The reporting activities for the best are part of PLM services and/or implementers. However, looking again, I’d expect to grow an interest from customers to have the ability to provide reports based on data we have in PLM systems. What do you think? What was your “reporting” experience with PLM?

Best, Oleg


PLM for Individuals – Integrate or Die?

January 26, 2010

I had chance to read CIMData paper figured out interesting facts related to the future trajectory of Autodesk as a PLM provider. You can read the paper on this link (Note, you need to be registered on CIMData site, but registration is free). In this paper, CIMData explains their vision on how they see Autodesk is going to transform from the vendor providing mostly tools used in many departments into an organization into something that allows to CIMData to include Autodesk into line of what they called “PLM mind share leaders”. So, I decided to share some of my thoughts on this topic as well as dreams about possible future trajectories of something I called – PLM for Individuals.

Autodesk and PLM
My pre-assumption for many years was that Autodesk is distant from association of their products with PLM acronym. At the same time, many of their tools used to build PLM strategy for many customers in the world. During all that time, I think, the question of Autodesk association with PLM was just about marketing. Autodesk successfully positioned themselves as a provider of tools and even put it as a differentiations of their strategy. You can take a look on the famous Carl Bass anti-PLM rap.  So, what is going on now? Some undergoing processes are convincing Autodesk to change their state of mind as a provider of tools towards something different. So, what happened?

Facebook, Connected World and File-based collaboration.
For many years, the ultimate mechanism to connect people was… “the file”. In the past, people in the organizations were able to exchange files for different purposes of design, planning, manufacturing. Availability of email with growing capacity of attachments just pushed forward need for more advanced collaborative solutions. So, Autodesk, successfully continue to run file-oriented-tool-focused business. There is no worry at all. However, change came from the outside. Huge adoption of internet in consumer space and, finally, social networks ended up successful ‘file-based” collaboration story. The same individuals in the organization that were perfectly happy with communication using files said – why life is so good in Facebook and bad on my working desk? Why should I stack with Outlook sending big attachments or uploading to the ftp site, when I can share on Facebook and/or other places?

PLM Alternative?
Personally, I don’t see Autodesk is jumping in the existing PLM runaway. On the bright side of PLM, today, is understanding of problem and companies’ need to build a framework or platforms that allow them to run product development, manufacturing. PLM supposed to connect all product-related dots in the enterprise. Autodesk is not there and, at the time that PLM buzz is moving to PLM 2.0, there is no need to join PLM club…

PLM for Individuals and Integrated World
So, what is the alternative? In the world that moving into the direction of social connection, I’d expect Autodesk to use “social integration” as a primary driver for integration of their tools inside and outside of the organizations. Connections between people can be much stronger than the “single data model” promoted by mind-share PLM vendors. Autodesk definitely can take their chance to outperform social innovation and social product development proposed by PLM vendors because of their agility.

Integrate or Die?
In my view, internet finally shifted minds of many people in an organization that change is going to happen. People will move their consumer’s habits into organizational work spaces and look how they can use better tools and experience for their work. There is no way for Autodesk to go with files for the next decade. I think, this is a major observation that stroke CIMData analysts to think about possible Autodesk movement to PLM.

What is my conclusion today? I’d not run fast to think that moving to PLM road is the only one possibility for Autodesk. My bet is on social networks, communication and internet technologies that will position Autodesk in PLM 2.0 (or whatever, we call it). I think, it will be very interesting run and challenge.

Just my thoughts…
Best, Oleg


How To Monetize PLM?

January 25, 2010

Almost a year ago, I raised the question asking if free is going to be the future of PLM? You can take a look on this discussion here. Additional discussions related to the “free” topic also happened. However, most of them were related to the notion of Open Source PLM. Nevertheless, today, I’d like to get back to this topic in the strict FREE context.

Before talking about PLM, I’d like to take you back into 19th century when two French economists – Cournot and Bertrand built models of the competitive world. They basically came to the opposite conclusions. According to Cournet, companies need to keep production lower in order to keep price high and not going to drop prices to the marginal level. According to Bertrand, model was opposite and in short assumed that manufacturers need raise production to get additional market share by taking down the product price. The second theory got back to us in today’s digital economic.

Let’s get back to PDM/PLM world. My hunch is that high prices and low profit are very typical for this space. Companies are competing with products having similar functionality (just compare portfolios of leading PLM vendors) and “successfully” driving prices and margins down more and more. At the same time, “user’s adoption” becomes a very critical topic in PDM/PLM space. In the situation when PLM products introduce more and more issues, customers are looking more and more on the alternatives (i.e. non-PLM software like Excel or emerging vendors providing open source or on-demand products).

So, what can be a solution to resolve this dead-lock? In my view, the ultimate solution can be taking price down to the ZERO level. By making basic PLM/PDM functionality free, we can expect improved user adoption and growing market share. Associated with this, quality of the software will be improved due to massive implementations for the huge amount of new customers. Now, you will ask me when PDM/PLM vendors will take money to do such action? I have few potential answers and will be interested to discuss what do you think about such options:

1. Selling support contracts and services

2. Selling online storage, traffic

3. Selling premium functionality

4. Selling information about organization work for the future improvement

Actually, I see, some of these processes already started to happen. The massive introduction of PDM functionality bundled with CAD is sort of trying to “sell for free”. There is a significant interest to model of Free Licenses etc.

Just my thoughts… What do you think about that?

Best, Oleg

Five Online Technologies for PLM in 2010

January 22, 2010

The world of computing is very unpredictable these days. However, I’d like to bet and put some of my thinking towards something called “online” or “connected” technologies in 2010. As usual, I’d be watching these technologies in the prism of PLM with some flavor of going beyond PLM acronyms trying to understand how it can impact product design, development and manufacturing.

Cloud Computing. I think, since last year, we can hear word “cloud” more and more often. However, this is also time to think what practical benefit we can take out of this in 2010.  When most of the customers trying to cross the “cloud” with “SaaS” and imagine how all Intellectual Property they are developing is going to Google-like space, in my view, 2010 benefits will be coming differently. Existing vendors and new companies will be discovering new ways to use cloud computing power to do calculation, rendering, analytic. Another possible alternative will be to use cloud space for collaboration, but here some security questions can be raised. We need to think about effective models to secure collaboration online for engineering. This is an open call, in my view.

Business Intelligence. More specific, in comparison to cloud computing, but very frustrating, for the moment. BI is complex and expensive. Multi-core machines, double digit GB RAMs, multi-display configurations. This is still a reality in BI world, but I think this state of mind will not fit engineering and manufacturing world. Operational BI trend is interesting, and I’d expect some development happens in this space too.

Enterprise Mashups. I’m a little optimistic with regards to mashup story this year, in comparison to the previous one. I hope you had chance to read my post “Is PLM too Complex to Mashup“, but I think demand for mashup is growing and some delivery will be possible. In my view, the opportunity will come from inside of companies as much as companies will go to private clouds and advanced web architectures. This will be the important exam for all PLM vendors, since they will be requested to share information using open API, SOA and other available infrastructure.

Social Software and Networking. This is a continuation of Enterprise 2.0 trend and an opportunity to capitalize on Facebook and Twitter maturity inside of the organization. I think, we’ll see lots of Facebook-clones for enterprise PLM and community collaborative experience will be replicated many times inside of organization. However, not all of them will be successful. The biggest problem is the question: “How many social platforms we need for enterprise?“. And, unfortunately, this question will keep enterprises busy without moving forward.

Unified Communication (UC). Mail, Phone, Laptop, iPhone, Messenger, Facebook, Twitter… Too many devices, in my view. How we can navigate between all these devices in the optimal way. I think UC, finally, will become mature and corporation will try to move forward in optimizing communication. While call designers over the wall using the phone, when you can chat in the 3DLive or similar collaborative application?

So, I will be interested to discuss with you my thoughts and have your feedback. Does it fit your organizational plans or development roadmaps? Do you see similar requests coming out of your communication with customers and partners?

Best, Oleg

PLM vs. ERP – Don’t Manage Innovation!

January 21, 2010

I was reading Tech Clarity insight “Evolving Role of ERP and PLM“. The topic of PLM and ERP is not new. However, I was always looking for detailed analyzes of PLM and ERP functions and roles in the organization, especially taking into account latest technological and social trends. You can find the report on this link. It provides 15 pages of analyzes, and, I think, this is the biggest publication from last time I had chance to see about PLM and ERP together.

Below my notes, emphasizing points of agreements and disagreements with Jim’s report:

Distinct roles of ERP and PLM
The roles of PLM and ERP are blurred in the organization. For the last years ERP companies successfully acquired and developed their PLM portfolio. So, their presentation of PLM as “Yet another app in ERP portfolio” was quite successful. PLM fights ERP heavily on their ability of manage product and engineering data. Unfortunately, instead of becomes an ultimate product and engineering data shop, PLM is running upstream by trying to establish themselves as “Innovation Management”… This is something that made me feel bad. Don’t try to manage innovation! You just cannot…

Design and product data management
The need for design and product data management one is clear for me.This is undervalued zone. What exist today as a mainstream PDM is only top of the big iceberg. I think PLM needs to get back to the roots and fix PDM topic. Otherwise future crash is the only question of time. PLM needs to define themselves as “product data unbreakable”. Not what happens today, in my view.

Cross functional processes.
There are no PLM or ERP processes. There are “organizational processes”. Therefore, the process’s problem cannot be resolved in PLM or ERP separately. The step toward BPMN can be good for PLM. It will set up openness to the right level and will establish a spot for process improvement in the organization.

PLM and ERP integrations
This is a hugely disappointing topic. The PLM/ERP integration reminds me ball in the air when both players are trying to keep him flying and not landing.  Demand for data integration is huge. I’d expect here some technological thinking and not process-organization. Until now, this is in complete ownership of services and smaller partners developing specific integration application.

Where does PLM stop and ERP begins?
Don’t even try to put this border. To establish this border is the same like to establish gatekeeper on the firewall between engineering and manufacturing. In my view, this is a huge mistake. We need to work toward removal of this wall by using appropriated technologies, methodology, collaboration and social application.

What is my conclusion after all? I can identify two PLM trends. (1) Cross organizational processes. By ability to connect and interplay different organizational process, PLM can be in unique role in the organization representing a product-oriented activities. (2) Future design excellence, 3D tools, consumer-oriented experience.

PLM and ERP need to stop fighting in the organization. As a first step, PLM needs to take the next level in the organization and embrace a cross-functional processes and organizational needs that cannot be served by any of existing systems.

Just my thoughts.
Best, Oleg


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