PLM vendors are in risk to follow ERP dinosaurs

June 22, 2015

old-flying-cars1

When it comes to PLM and ERP, you may always get some feeling of rivalry at the air. PLM and ERP domains are not competing. However, ERP and PLM vendors are clearly competing for customers strategic mindset. After all, it always comes to the competition for strategic budget allocation.

For many years ERP vendors came first to the corner office of CIO. These days some ERP dinosaurs are fighting for surviving in a new era of cloud computing and SaaS software. Toolbox.com article – 6 Reasons Why The Dinosaurs of ERP Are About To Go Extinct provides an interesting perspective on what happens in ERP software domain and industries today. 6 reasons in the article is the answer why traditional on-prem software solutions provided by companies like PeopleSoft are eaten by rivalry of cloud newcomers.

The article made me think about trajectory of some implementations and vendors in PLM domain. I can clearly see some similarities. Do you think some 20-30 years old PLM vendors will follow the path of the dinosaurs of ERP? Here are some of my thoughts about PLM domain and on-prem / cloud trends.

1- Old platforms need to retire

For the last 15-20 years, manufacturing companies adopted 2-3 generations of PLM software. For some of them (especially very large companies), the process of adoption was long and expensive. It took time to align processes and systems together. At the same time, technology is moving forward. To move forward, many customers need to drop old products and move to support new operational systems, hardware, devices, internet browsers, etc. It is obviously raises a question of how to retire old platforms. But this is a very painful question for many companies.

2- IT managers and upgrades

Upgrades are painful and IT is the department that traditionally spending a lot of resources and cost to upgrade all systems for a company. Cloud systems are going to change it. Since data centers and cloud infrastructure are owned by software vendors, they are also taking responsibilities for the upgrade. Some innovative PLM vendors such as Aras is including upgrades into their subscription also on on-prem installations.

3- Mobile and site independence

Our working environment is changing. 10-15 years ago, out work was mostly on site. These days the workforce is distributed. People don’t need to be at their desk to do a job. Multiple locations is a reality even for small companies. Mobile devices are in everyone pocket. To have a system that capable to work in such environment is an imperative for every company.

4- How to get small customers on board

PLM vendors made multiple attempt to provide a solution for smaller companies. It never worked. I can list number of products that were announced, retired and discontinued. However, the importance of smaller companies will only increase. New technologies and online market communities are making smaller manufacturing more competitive. It will bring an additional need for cloud PLM systems.

What is my conclusion? Manufacturing companies are slow in their adoption of new technologies. PLM never been a first place to innovate for cloud companies. But the reality of the outside world and online business are bringing manufacturing companies to the point that they will need to have a competitive software for product development and manufacturing. Old systems won’t survive and will have to retire. It is a time for PLM vendors to think about innovation and new platforms. Otherwise, it might to be too late to build and too expensive to buy. Just my thoughts…

Best, Oleg


PLM + ERP = cloud… what?

June 9, 2015

cloud-plm-erp-and-what

Enterprise resource planning is well established domain for many years. ERP in manufacturing made a very long history of transformation from early days of MRP and MRP II and it is usually a suite of integrated applications used to store data from multiple activities – inventory, product planning, manufacturing, service delivery, sales, etc. For many manufacturing companies, ERP is a fundamental element company use to manage business on daily basis.

Product lifecycle management originally came out engineering activities and management of engineering data – CAD files, engineering bill of materials and later on focused on product development processes and product innovation.

The relationships between PLM and ERP aren’t simple. While both PLM and ERP systems are complementary as a vision, in practice both are very competitive when it comes to customer budgets and controlling specific element of customer information – parts, bill of materials, etc. You might remember my very old blog post – The ugly truth about PLM and ERP monkey volleyball. PLM and ERP are clearly separated by a common bill of materials. BoM is a centerpiece of product development and manufacturing data and it sits accurately between PLM and ERP occupying minds of sales and consulting providers and advisers from both domains.

The increased complexity of products combined with even more increased complexity of manufacturing processes and business relationships often put both ERP and PLM on the line for streamlining business processes, simplifying data integration and optimizing product cost. In my view, the future of manufacturing will depends on solving old PLM / ERP integration problems. Old siloed enterprise models used data ownership as one of the fundamental models. To own data and allow access in a silo (such as PLM, ERP or MES) was one of the first priorities. Today and tomorrow the speed of communication will be more important. To make collaboration and communication fast will be a criteria for future models to survive.

Cloud technologies are restructuring existing software domains and changing established business relationships. It happened in many industries. Will cloud become a force to change an established status quo between PLM and ERP businesses?

Diginomica article – Autodesk, NetSuite – chaos theory in action? put some lights on a trajectory of business between NetSuite – a leading cloud ERP vendor and PLM360 new cloud PLM product business established by Autodesk few years ago. The article has a some marketing and promotion flavor speaking about expanding of Autodesk PLM business. Also, author disclosed that Diginomica is a premier NetSuite service provider. However, NetSuite and PLM360 can give you an interesting perspective on new relationships between PLM and ERP in the cloud.

One of the imponderables about working with any cloud delivered service is just what it might add to an established business that could not have been predicted or foreseen. The combination of an established business, with well-defined product families, can still find itself having new business opportunities thrust upon it in a quite chaotic manner by its association with a cloud services provider.

There is, of course, an obvious complementary fit between a CAD toolset and an ERP system – one manages the design of something and the other manages its appearance as a reality. So Autodesk had spent some time talking to other ERP vendors about potential partnerships. But the company had realized that none of them were the right fit.

The company realized that what they were looking for was a cloud component and it was Netsuite’s cloud focus that fitted them best. According to Locklin the fit was good enough from the onset that the two companies were soon talking about a close alliance rather than just a loose relationship.

Traditionally, integration between PLM and ERP is a very painful process. One of the aspects of complexity can be attributed to differences between PLM and ERP technologies and APIs. Cloud cannot solve the complexity of PLM/ERP integration – it is still hard to make it happen. But, cloud technologies can simplify the integration process by establishing common technological grounds for companies creating business on top of PLM-ERP integrations. Jitterbit a company both NetSuite and Autodesk are partnering to integrate PLM360 and NetSuite. Jitterbit is a software outfit built specifically to integrate cloud applications.

Having worked with it as a core part of the Autodesk partnership, the relationship has now spread to NetSuite, which has also formed its own partnership with Jitterbit. It is now being used to provide NetSuite users with connections to over 250 applications. This was formally launched at the recent SuiteWorld conference in San Jose.

What is my conclusion? Cloud is changing businesses and product boundaries. The traditional boundaries of CAD, PDM, PLM and ERP business suites were created by many years of selling on premise products using established partner channels. Cloud removes barriers between applications makes it more transparent. What about business? Will cloud remove barriers between PLM and ERP? Will it create a more granular set of applications provided by multiple software vendors and orchestrated by ERP service providers? The time is to change a traditional marriage relationships between PLM and ERP that I can see conflicting in many ways. Are we going to see Cloud (PLM+ERP) product offering soon? I’m not sure about that, but changes are clearly coming to manufacturing domain. Just my thoughts…

Best, Oleg


Bill of Materials (BOM) and product lifecycle open loops

May 19, 2015

integration-loop-bom

It is hard overestimate the importance of Bill of Materials for product development. In my keynote at ProSTEP iViP symposium in Stuttgart earlier this month I’ve been sharing my thoughts why developing of single BOM across multiple disciplines in critical for organization. I wanted to bring few examples that can demonstrate why having a single BOM strategy can bring benefits to product development and manufacturing organization.

Earlier today, at Siemens PLM connection event in Dallas, I captured the following slide demonstrating an integrated approach in design, manufacturing, planning and production. What is really interesting is how as-design, as-planned and as-build views in PLM are integrated with design, manufacturing, planning and production.

integrated-bom-plm-mes-mom

Few days ago, I the following article by 3D CAD World article caught my attention – Progress in closing the product lifecycle’s loops  by Peter Bilello, president of CIMdata. The article speaks about the importance of collaboration across diverse enterprise groups.

For many years, the PLM industry has greatly benefited from a steady stream of improvements in collaboration among ever more diverse enterprise groups—in data interoperability, for example, and in the transparency of workflows and processes. The development, manufacture and support of globally competitive new products are, however, still hamstrung by the remaining open loops new and old.

Later in the article it came to the topic I was looking for – Bill of Materials. According to article, BOM is a biggest remaining challenge to make integration running smooth. Here is the passage, which explains that.

Between engineering, manufacturing and finance, a big remaining challenge is the bill of materials (BOM) in its many forms—the as-designed BOM, the as-engineered BOM, the as-manufactured BOM, and so on. Generated and managed with PLM and often executed by enterprise resource planning (ERP) systems, BOMs themselves are loop closers. PLM-ERP connectivity and interoperability are steadily improving, but some open-loop issues are resolved only after time consuming face-to-face meetings.

What is my conclusion? Single BOM could be a great thing if vendors will figure out how to implement that. As you can learn from Biello’s article, PLM-ERP has open-loop issue and BOM is a tool to close that. However, companies are concerned about bringing single BOM strategy since it can raise lot of organizational challenges for them. At the same time, the demand for better integration and collaboration can put companies in front of decision to bring single BOM to close open loops between engineering, manufacturing and production anyway. Just my thoughts…

Best, Oleg

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 


PLM and ERP: Separated by a common Bill of Materials (BOM)

May 6, 2015

bom-lifecycle

Yesterday, I had a privilege to share my thoughts about Bill of Materials and BOM management during my keynote at ProSTEP iViP Symposium in Stuttgart. That was my first time at ProSTEP conference. The first day is over. I will be publishing  updates in my live blog here.

The discussion about Bill of Materials is always interesting and entertaining. BOM is a centerpiece of every engineering solution. As an organization you have to manage different aspects of Bill of Materials during design, engineering, manufacturing and support stages. These days, as companies are moving from selling products into services, support and maintenance BOM is getting more into the focus of discussions. After all, Bill of Materials is complex topic. On the following picture you can see multiple dimensions of BOM complexity:

bom-complexity-1

In every organization, Bill of Materials has two notions  – technical and political. The first one is absolutely important. The following three characteristics are absolutely important if you think about reliable BOM management solution: 1/ ability to manage multi-disciplinary data; 2/ scalability; 3/ user acceptance. User acceptance is a tricky thing. The demands of people in an organization about BOM are different. Engineering, manufacturing, support, supply chain, sales – these organizations have want to see BOM differently.

enterprise-bom

However, regardless on the role of a person in organization, the following demands are absolutely critical: 1/ No errors (each mistake in BOM is painful and can lead to significant problems in an organization ; 2/ No painful date re-entry (nobody wants to enter information into BOM multiple times); 3/ No painful synchronization of data between PLM, ERP and other systems.

bom-management-demands

Below you can find a full deck of my presentation:

PLM and ERP: Separated by a common Bill of Materials (BOM) from Oleg Shilovitsky

What is my conclusion? Bill of Materials and BOM is a very interesting topic. My hunch, it is getting even more in the focus of people as products are getting more complex. These days every single product is a combination of mechanical, electronics and software. Manufacturing companies are selling it as a services. Customers are demanding configurability, high quality and low cost. How to manage all these things together? The following three questions are absolutely important when you think about BOM management – 1/ How to support connected processes in an organization? 2/ How to stop synchronizing BOM between silos (PLM, ERP and others)? 3/ How PLM and ERP can support a concept of “single BOM”? Just my thoughts…

Best, Oleg

PS. If you want to discuss more about BOM management, please feel free to contact me directly.

 


How to prevent cloud PLM integration mistakes

February 2, 2015

connected-plm-erp

Cloud is huge enabler for collaboration between people. It makes your data and processes accessible everywhere from a browser. It can help you to collaborate between engineers and suppliers. It can help you to integrate systems and people across enterprise.

Let me speak about the last one. The integration topic is actually tricky. I’ve been sharing some of my thoughts about cloud integration challenges – Integration is holding back PLM cloud adoption few months ago. Last week, I had a chance to attend two webinars about PLM and integration.

Become a Connected Manufacturing Enterprise with Agile Integration by Jitterbit. The following picture gives you a perspective on a problem of “connected manufacturing” and architecture solutions like Autodesk PLM360 and Jitterbit are solving this problem.

plm360-jitterbit-1

Here is the view that shows you the reality of mixed (cloud and on-premise) integrations.

plm360-jitterbit-2

Another webinar by CIMdata – “PLM & ERP: What’s the Difference, and Why Should you Care?” is providing another perspective on integration challenges between engineering an manufacturing.

cimdata-plm-erp-1

cimdata-plm-erp-2

Companies are moving into mixed cloud and on premise environment. This is a reality and we cannot avoid it. So, for a foreseeable future, we will have to deal with integration of multiple systems – some of them will continue to run on premises and some of them will be elsewhere (public cloud). It made me think about potential mistakes you can run into while integrating systems.

1- Lost data semantics

Most of integration scenarios are about how to send data back and forth between systems. It is hard to keep semantics of data and not to loose it when exchanging information. So, define what data means and keep an overall integration data schema. Otherwise, the result can be messy.

2- Data transfer limitation

Although some of integration infrastructure can allow you to implement data exchange quickly, you can underestimate the bandwidth requirements. Sending large packets of data can cause significant latency and create runtime errors and problems. Check what monitoring tools are available to handle such situations.

3- Transaction management

Most of manufacturing systems are sensitive to transactions. To manage distributed transactions can be tricky and require some fine tuning. Pay attention on how you handle error processing when integrating transaction system managing ordering, lifecycle and bill of materials.

What is my conclusion? The complexity of integration is growing. Cloud systems are bringing many advantages, but will create additional challenges to IT and professional services. Most of integrations are not working out of the box. New tools running from the cloud can help you to integrate it faster, but it will require good coordination with IT and planning upfront to prevent potential mistakes. Data integration is hard and requires experience and familiarity with manufacturing systems. Just my thoughts…

Best, Oleg

photo credit: freefotouk via photopin cc


When BOM is not BOM

December 17, 2014

walks-like-BOM-quacks-like-BOM

Bill of Materials (BOM) is a central part of everything in product development. Sometimes, people call it product structure. Manufacturers are using BOM to define list of raw materials, parts and sub-assemblies with corresponded quantities need to manufacture a product. This is over simplistic definition. As usual, devil is details and BOM story is getting quite complex. Depends to whom are you talking, people see a different aspects of bill of materials – sales options, design hierarchy, product configurations, manufacturing process, service parts. Many systems are defining BOM differently. It depends on their roles and functions in overall product lifecycle.

In one of my recent articles – Thoughts about BOM ownership, I discussed some ideas about how BOM can be shared among organizations and enterprise software tools. That was my attempt to think about how to resolve a conflict between two major BOM stakeholder – Product Lifecycle Management and ERP systems. The BOM management landscape in the organization is complex. In my view, companies are not ready for a single BOM management tools – it was my observation 2 years ago.

At the time a major BOM master ownership dispute is between PLM and ERP vendors, I can see an interesting trend which can put some lights on how PLM companies are articulating their BOM strategies.

Dassault Systems ENOVIA is coming with their "zero BOM error" strategy. I posted about it earlier – PLM and Zero BOM errors: the devil is in details. In a nutshell, ENOVIA is trying to improve process of Bill of Material generation by direct connection between CATIA design and product structure. In my view, it might lead to potential formal elimination of EBOM, which will be replaced by a bundle of design and engineering information. Practically, product structure in CATIA/ENOVIA will represent everything that happens on engineering level. According to ENOVIA strategy, it will eliminate errors between design and engineering.

In parallel, I’m observing the way BOM is positioned by Siemens PLM. Teamcenter blog – Introducing BOM management speaks about BOM information as a vital part of many processes supported by PLM. I found interesting how "BOM management" term was replaced by "Product definition". Here is the passage:

I just noticed that as I am writing this I am using the words “bill of materials” less and “product definition” more. I would go back and correct – I wanted to keep it a surprise! But I think it’s ok – it helps me get to this next part. To us, it has become abundantly clear that one of the problems that come up when you talk about bill of materials (BOM) management is that the scope of what people might mean is so broad. To call all those things listed above “BOM Management” is not sufficient. We’ve collected these capabilities into an umbrella we call the Integrated Product Definition. This is an area where we have been leaders, and it continues as a high priority for us – we have the breadth and depth to address these issues like nobody else can.

In both situations, I can see a strategy by PLM vendors to redefine BOM and bring up the extended value PLM environment for customers. This is a very important transformation in my view, since it helps to streamline processes. The problem of synchronization between design and engineering environment is well-known and not solved in many companies. Teamcenter is connecting BOM management into varietly of topics such as part management, master data management, configuration management, coordinate change and variability and others. It helps to create a solid platform to manage product data.

However, the biggest fight over the BOM is between PLM and ERP environments. Engineering.com outlined it in their article – The next big boom in PLM is a battle over MBOM ownership. Muris Capital Advisors outlined the sam conflict in the blog post – The Battle for BOM Control. According to Bruce Boes of Muris Capital, service integrators will play a leading role in making alignment between PLM and ERP and forming BOM master model. Here is an interesting passage:

We predict that System Integrators have a unique opportunity and from our recent experience, the desire to bridge the gap and add value during integration with the BOM as a key point of integration. In doing so they open the market for process consulting and integration services surrounding the master model concept.

The last one make sense. In many PLM implementation projects, SI teams are actually leading development of PLM-ERP integration on site or using different middleware or integration toolkits. Unfortunately, the cost of these implementation is high and overall process is very complex.

What is my conclusion? PLM vendors redefining BOM by tight integrating of product information into development processes. From what I can see, both Teamcenter and ENOVIA are trying to redefine Bill of Material (BOM) as a wider topic. This is an interesting strategy to fight over MBOM ownership. Integrated "product definition" can help to streamline processes between engineering and manufacturing. However, the end game should be total BOM experience including all manufacturing aspects – manufacturing process planning, cost and orders. The last one brings PLM-ERP integration topic back on the table. Just my thoughts…

Best, Oleg


SAP has a magic technology to improve enterprise integration

December 4, 2014

digital-integration

Integration is a big deal. When it comes to enterprise organizations and specifically manufacturing companies of different kinds, enterprise integration is one of the major challenges that influence broad PLM adoption and ROI. Enterprise integration isn’t a simple problem to solve. It requires a diverse set of tools to support data exchange and process orchestration. PLM vendors are providing a diverse set of solutions for that. On the side of the strategic position, re PLM companies are expanding their data reach by attempting to cover larger scope of data and process. You can read about it in my post about ECO and EBOM/MBOM synchronization complexity.

My attention caught by betanews article – SAP launches new manufacturing solution to improve enterprise integration. It speaks about new technologies developed on top of new SAP HANA in memory database to manage real time integrations. Here is the passage that gives you a glimpse of what is that about:

SAP Manufacturing Execution includes the SAP Manufacturing Integration and Intelligence (SAP MII) application and SAP Plant Connectivity software. This allows it to provide machine-to-machine integration and orchestrate intelligent manufacturing. Using the existing SAP HANA platform it offers global visibility into operations by making manufacturing big data more accessible and enabling predictive analytics capabilities to be used in house or in the cloud. This gives businesses advanced problem solving ability and ease of access to manufacturing data so they can make improvements in cost, quality, asset utilization and performance.

I’ve been touching SAP HANA topic before in my post – Future PLM platforms and SAP / Oracle technological wars and Is SAP HANA the future of PLM databases.

I’ve made a trip to SAP MII website to dig for more information about integration architecture. Here is an interesting document (with lot of technical details) that worth looking if you are interesting in SAP MII HANA integration – SAP Process Integration Act as Adapter for SAP MII integrating with Enterprise Applications. The document is available here. I captured the following architecture slide that give you a detailed view. More information is available here. From that picture you can see SAP’s view on how PLM and other business apps are going to be integrated with manufacturing and shopfloor system.

sap-mii-architecture

What is my conclusion? Modern manufacturing requires high level of integration. It goes from design and engineering to manufacturing and operation. Data integration and transparency will allow to companies to optimize performance, save cost and streamline processes. However, to make it happen is not a simple job and it requires lot of hard-wiring, data transformation and openness. PLM vendors’ demand to have control over MBOM to make vertical integration easier. As you can see on pictures and documents above SAP is working to create a grand vision of data integration from shopfloor to business applications and services. How and where PLM and ERP vendors will meet to create an integrated manufacturing solution is an interesting question to ask.

Best, Oleg


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