5 Things To Know Before PLM-ERP Integration Project

Yesterday, I had chance to read the new paper by Jim Brown: Issue in Focus: The Integrated ERP-PLM Strategy. There are lots of things I agree with Jim. They are mostly in the area of strategic need for PLM-ERP as well as growing level of awareness about such need on the side of companies. However, the issue of integration cost is somewhat, I think, is a very critical. Unfortunately, because of complexity, manufacturers are facing the issue of PLM-ERP cost very late in the implementation process.

In my view PLM-ERP integration never comes as out-of-the-box product. The diversity of product development and manufacturing practices, product versions and many other factors are making PLM-ERP integration very complex and expensive project. I want to breakdown possible decision points related to PLM-ERP integration.

What data do you want to integrate?
It sounds obvious, but before you want to integrate systems, you need to understand what data you are going to integrate. It seems to me as an important topic is to break down data in both systems into very granular pieces and see how this data will be combined, transferred and integrated. Don’t move forward until you don’t understand what data assets do you have.

Where is data located and how it controlled?
The enterprise data management is a complex task. PLM and ERP systems are two the most complicated in the modern manufacturing. Data can be distributed in different locations, organization can use multiple ERP and, sometime, PLM systems. The ownership of enterprise systems and, in the end, control over the data assets can be very complicated. You need to see a full picture of data control by different people in the organization.

What processes influenced by integration?
There are lots of advantages in implementing PLM-ERP integration. However, such integration will introduce a change in the organization development and manufacturing process. As every change, it may bring some problems or simple additional cost in adjustment of work in the organization. You have to understand the influence from the different standpoint – people, software and processes. The cost of adjustment needs to be include into overall estimation related to your PLM-ERP integration project.

What API and development skills do you need?
It sounds like a completely technical. Nevertheless, it is very important. Your organizational systems can provide a different set of techniques and tools to develop integration. In most of the cases, enterprise systems are heavily customized. You need to understand and validate what tools and API you can use and how you PLM-ERP integration will be adjusted to all existing custom developments you have in place.

How to maintain your integration?
This one is last, but extremely important. Your PLM-ERP integration is not a single shot project you are doing once. Your organization becomes heavily dependent on this integration. PLM-ERP integrations are very often belonging to the class of “mission critical systems” in the organization. Therefore, you need to validate how you will be able to maintain this integration from all possible standpoints – people, technologies, system upgrades. The last one is also important. You obviously will manage upgrades of your ERP and PLM systems. You need to take into account that since you have PLM-ERP integration in place, this upgrade process will always be dependable on how you maintain your integration.

What is my conclusion today? PLM-ERP integration is a very expensive project. It can bring lots of benefits, but also drain a significant amount of resources. You need to understand how to make a right estimation of work and validate this project before it starts. I’m interested to discuss your experience and listen to your feedback.

Best, Oleg

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16 Responses to 5 Things To Know Before PLM-ERP Integration Project

  1. Siva says:

    Hi,

    I was a PLM developer and have worked in ematrix and agile before I started my own web development company.

    I would like to venture in to PLM business also where I would like to create a PLM that caterers small and medium scale segments.

    I want to know your opinion about what a new plm development should focus on for today’s and tomorrow’s business?

  2. Oleg, very good points! In my opinion they can and should be extrapolated for all kind of integrations, not only PLM-ERP ones. When you integrate with other PLM, some legacy applications or anything else you have to think about all issues mentioned.

  3. Douglas says:

    Oleg,
    In my experience the integration or interfacing of PLM to ERP is not a big deal. Technically that is…
    From that point of view it is not expensive either.
    But…
    Functionally it can be difficult if the owners of the EBOM and the MBOM cannot see eye to eye with respect of the data definitions.
    So, what does the EBOM look like, which structures are used and which attributes are used per item. Do the items reflect “real”items or are they merely drawings.

    The latter is a real issue as most engineering departmenst are still working in a document centric way and this has to change to an item centric way to be able to connect to manufacturing

    When the type of structuring has been solved (i.e. engineering is working item centric) interfacing to ERP can be done by using data definitions like those contained in Step PDM schema, the more recent AP 239, or by using proprietory formats like PLM-XML

    What’s your view?

  4. Siva, I don’t think I have a simple answer on this question. It depends on many factors. In my view, it is very hard to create full fledged PLM offering, and you need to focus on something specific. I’d recommend you take a look on my post from the beginning of 2010 –http://plmtwine.com/2009/12/27/top-five-plm-software-challenges-for-2010s/. Good luck! Best, Oleg

  5. Marcin, Thank you for your comment! I agree, they also can be applied to PLM, Legacy and other types of integration and many others too. Good point! Best, Oleg

  6. Douglas, Thank you for your comments and insight. I have mixed feeling about your statement of “PLM to ERP is not a big deal”. On the surface, I have seen companies that implemented a very limited subset of data integration between PLM and ERP in the efficient way (like “push your released BOM from PLM to ERP…i.e. SAP). If companies don’t have EBOM and only deal with documents it can be even easy. However, when it comes to management of engineering BOMs, configurations and may be BTO, ETO type of work, it becomes much more complicated. The successful implementations I’ve seen are not focused on STEP/AP. Maybe this is a European specific. I personally think, STEP is much more successful in Europe. Does it make sense? Best, Oleg

  7. satish says:

    Oleg,

    I can not imagine a company not having integration between their PLM and ERP systems. We implemented an integration in 2000 and just upgraded it to use the latest technology (webservices,ESB). The benefits of this integration is tremendous and saves the business lot of time….All the business needs is awareness of how much time this will save the business and the accuracy of the data between these systems due to eliminating manual entry…

    Satish

  8. Douglas says:

    Oleg,
    I jus meant that technically interfacing PLM to ERP is not a big deal. The big problem lies in the way Engineers define their BOM structures, which is in a mainly functionally oriented way that does not reflect the way products are manufactured.

    The solutions then is clear: start defining the EBOM in such a way that in becomes easier to manufacture. In the end, the only purpose that is being served by creating drawings and BOM’s is that documentation is created and delivered that enables products to be manufactured!

    By applying Concurrent Engineering in the Detail Design phase it will be possible to influence Engineering to create drawings and BOM’s that actually can be used for manufacturing directly.

    It is also a good example of Lean Product Design, taking a lot of extra non-value adding work out of the process chain.

    Douglas

  9. Satish, I agree. The need for PLM-ERP integration sounds like an obvious. However, many of the companies I know, decided not to proceed because of cost and complexity). Best, Oleg

  10. Douglas, I agree with you. The most important piece of PLM-ERP integration is to connect two different way of thinking and information structuring- engineering and manufacturing. To create a lean system is a good approach. Such system can allow you to make simultaneous engineering and manufacturing planning. The result will be obvious- reduce a cost of product (better planning on early stages) and more efficient communication. Best, Oleg

  11. bpmintro says:

    Hi,

    I dusted some memories from the “computerized drawing” as we called it then, period of 1987-1994..well, we were developing a new system based on AutoCAD, and our managers (who were not even using a computer) insisted upon having an integrated view of a project. So, we were really working hard in order to have data from a few sources put together. We even developed a feature for locking the AutoCAD drawing for a customer that had a debt.. The technichian was getting a message with the exact details, and was reporting that to the project manager..This was one way to have every one involved..
    Forgive me if I sound nostalgic.. My conclusion didn’t change – these “integrations” are first of all motivated by managenment vision…

    Thanks,

    Dafna

  12. Dafna, Thanks for your comment! I see your point. In the early days, managers led in the vision of “integrate everything”. I see things differently these days. The connectivity between design and manufacturing ends are almost a necessary part in any organization. However, before commitment to this project is done, the realistic estimation of cost and all other aspects are absolutely needed. Best, Oleg

  13. […] Things To Know Before PLM-ERP Integration Project http://plmtwine.com/2010/05/04/5-things-to-know-before-plm-erp-integration-project/ PLM and ERP are two systems that have a very long history of integration initiatives. Batch, […]

  14. Ramses II says:

    Siva,
    Pls contact contractor183@yahoo.com on ideas for PLM product development.

  15. Anunturi imobiliare…

    […]5 Things To Know Before PLM-ERP Integration Project « Daily PLM Think Tank Blog[…]…

  16. @chausseray, thanks for the comment! Yes, STEP/ISO is a possible option. Some of companies like EuroSTEP are practicing usage of this model for integrations. Best, Oleg

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