PLM vs. ERP: Weird or Different?

Discussion started last week with Jim Brown got me think more about ERP and PLM. I have to say, this is not a new topic, but thinking about it, I’m always finding new angles to see differences between ERP and PLM viewpoints. I want to make some breakdown on how things different in both systems, but before, I’d like to suggest you to watch the following video from TED.

Identification: Documents, Parts, Item Masters

When you think about identification systems, you can clearly see that PLM and ERP starts from different foundations. PLM (especially systems that got founded around CAD) think first about Documents and related Parts. Even for systems that taking Item centric approach, definition of Item is pretty much similar to Document. On the opposite side, ERP is all about Item Master, Bill of Materials and Dates (!). Everything starts and ends with “The Date”. Without the assumption about what date you are talking about, you won’t be able to get anything done in ERP.

Versions vs. Effectivitiy

The main identification mechanism in PLM systems is a version. Documents, Parts have versions on it. This is how work-in-progress environment works. Whatever you change, you put version on it. On the opposite side, everything is effectivity oriented. You have a date on everything you are going to change. This date will show when it is effective. It is pretty complicated to combine these two opposite sides to work together.

Changes

This is last in top three core different fundamentals of PLM and ERP, but for sure not least. When you think about changes in CAD and PLM, you can be pretty flexible. You can always get new version of almost everything you are doing. World of PLM structured information comply with your will to change, and you are getting to the next level. The previous one easy becomes obsolete. The life is absolutely different on ERP side of the world – everything you want to change – think dates. Your manufacturing system is up-to-date to manufacturing life. All your change may and will impact manufacturing production systems. All processes are formal, requires ECN/ECOs, signatures, confirmation, etc.

So, Where we can go from here?

These bits and bytes are, in my view, fundamentals of differences between two worlds of PLM and ERP. On the upper levels, buzzwords of execution and innovation are flying, but here inside Bill of Materials, Parts and Items are struggling to live together and magically represents the same product company is doing business on. I think it is very logical that everything PLM people like to see as normal, seems different (or weird) on ERP side. Opposite is also true. Now, my question is how to balance this system? There are few possible ways, and I will try to analyze them.

Data Exchange

This is the old and straightforward way to do PLM/ERP business. If you’re familiar with “drop over the wall” approach – here you go. Just drop Bill of Material from PLM to ERP and forget. But, I’m not sure this is the most efficient one.

Process Orchestration

The most complicated. You don’t care about data first – you think the process wise. This is the right way to do business in the organization. However, compare to the construction industry, if you build you house on the badly prepared foundation (enterprise data) you are in the high accident zone.

Mashups

This is the potential alternative. This option is not developed much these days. Instead of fighting about how to own data, let’s try to focus on how to consume data in the way that users will be less worry where information resides and more focused on decision making. However, this option is still requiring a lot of investigation and research.

What is my conclusion today? It is hard to say “where PLM stops and ERP begin”. Things are getting connected, weird and unbreakable if you want to insure your organizational processes are running smooth. And this is probably less about PLM, ERP and even other systems. This is about how your organization work. And connecting it to the video you had chance to see before, think about your product and not about how it represented in different siloed systems.

So, how do you see? Does it make sense? What are your experience and view on how things need to be connected?

Best, Oleg