PLM, ERP and Managing of Effectivity

PLM, ERP and Managing of Effectivity

One of my blog readers asked me few questions about managing of effectivity. I decided to share this information. In my view, the conversation about Effectivity is always complicated. There are lots of opinions about how you need to manage effectivity, what system serves the best the purpose of effectivity management and how to solve potential complication when dealing with effectivity management.

Effectivity in ERP vs. PDM/PLM

Effectivity definition originally comes from MRP/ERP environment. The most typical example is “date effectivity” which defines the available to a particular Part/Item. The “effectivity” term is not specific for manufacturing environment. However, I found it useful in many related to manufacturing systems. PDM/PLM originally was created without effectivity in mind. Most of engineering systems are “revision” oriented rather than “effectivity” oriented. It means PDM/PLM is managing different revision of objects (i.e. Parts, Documents, etc.) rather than defines their effectivites. However, with the increased need of integration between PDM and ERP as well as the introduction of PLM systmes on the market, the need to manage effectivity on multiple Bill of Materials int the environment different from manufacturing increased significantly. Effectivity might be defined as a date, serial number or, in a more complex way, as a “unit” (think about a particular car configuration / model).

Effectivity: Part vs. BOM

The difference between effectivity in the context of a Part and the effectivity in the context of a BOM is often getting misunderstood. These two effectivities can be managed independently. Part effectivity scope is only Part itself. An example is a manufacturing part effective from 1-June until 31-August. At the same time, you can define effectivity of a particular part in the context of the assembly. In the case of assembly, a Part can be used in different assemblies /BOMs with a different effectivity.

Effectivity Management

What means management of effectivity? Some of the elements of effectivity management related to the definition of effectivity dates, S/N, units, etc. They are coming as an information from suppliers (in case of standard parts), subcontractors, manufacturing planners, etc. At the same time, there is another aspect of efectivity management related to proliferation of effectivity during the management of Bill of Materials and ECO. One of the examples can be a change of Bill of Material related to the ECO implementation. There are many other situations. They can be very specific and depend on company practices and development/manufacturing processes.

Effecitivity and Different Industries.

Some elements of effectivity management can be different, depends on the industry. Development practices in discrete manufacturing are from electronic and others. In addition, different effectivity types can be applied in case of managing highly configured equipment (i.e. cars, airplanes, etc.)en. The diversity between industry are caused by differences in product development methodologies as well as by differences in data modeling.

What is my conclusion? Effectivity management can be complicated. It can be especially complicated, in the case of multiple environments – PDM, PLM, ERP. The synchronization between systems as well as effectivities updates can be challenging to be implemented. To maintain a consistent system is a crucial part of implementation from the standpoint of a standalone system as well as multiple connected environments. I hope this summary provided you with the basics of the effectvity management. At the same time, I would be interested to hear about your practices in how you manage effectivity in different environments.

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.


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  • Paritosh

    The value add of effectivity date is entierly from Disposition for outgoing part and allocation of supply resource for incoming part and this works only during release of change orders to ERP with right effectivity date (assuming those dates are not altered in ERP as the effectivity date is identified in CCB meeting)

    Also, Effectivity date plays important role to update BOM structure (in terms of Quantity, Ref designatore change or substitution of part using deviations orders temporarily) when the date is arrived.

    Above all, effectivity date function makes sense if PLM is used as master product data and used in End to End process in supply chain.

    Otherwise, Synchronization of Effectivity date from ERP to PLM does not add value. Also, it would not add value when regional parts and globsl part information is managed using regional values in attribute as the effectivity date is not maintained for region specific value.

    With this one can see the practical ineffectiveness of managing region specific parts using in singlesite PLM.

  • beyondplm

    Paritosh, thanks for your comments and insight. I agree. I think differentiation you mentioned between ERP and PLM comes mostly when we are talking about “date” effectivity. What is your view on usage of effectivity as a concept for managing configurations? Best, Oleg

  • It depends where the MBOM resides, which is typically in an ERP system. Managing effectivity is one of the areas where my company is struggling. Parts are revision controlled in the PLM system and transferred to ERP with a “future” effectivity date. As Paritosh highlighted, effectivity dates are driven by the disposition. If the dispositon is “use up” then the effectivity is determined by the inventory and demand. This could become very tricky as demand is a variable factor and cannot always be predicted well. In my opinion, the inventory/demand management group should set the effectivity dates in the ERP system based on the demand at the time of releasing the change but need to constantly monitor the demand and adjust the dates accordingly, which could be very challenging.

  • Paritosh

    With the understanding of your Article, I would see as Effectivity is more like a PLM with SOA model. where the real time information part/product information is needed in downstream applications. It could be to ERP, CRM for Field service function, 3rd party logistics, could be anywhere. From Managing configurations point of view, this would work only when part information is manage with lifecycle specific revisions. separate revisions for each lifecycle phase.

    Organization where process and need for real time data is dynamic are better poised to adapt.

  • Aravinth Rajendran

    Hi Satish,

    I have a doubt. Is the following case valid? Engineering team which released the latest revision mandating the usage of the latest released revision…does this scenario happens at your company? If yes, how does the demand management / inventory / MBOM managing team handles this?

  • Paritosh


    Generally, Disposition analysis for the items that are outgoing and incoming are picked up and Supply chain data from ERP (Inventory, Open Purchased order, Qty intransit, Qty in WIP, Subcontractor qty are bumped against MRP plan) this way one would get planned order based on Demand and Supply. Then MRP analyst, checks the impact against the item that whose revision qty or deletion on that day. based on demand and supply. he may prepone or postpone the effectivity date.

    Unfortunately, this activity is done in excel or in some analytics. it is not done in ERP because, the change order is still in PLM.

    But companies, port the change order from PLM to ERP and rerun the MRP plan. MRP program in any Package ERP has an ability to pick the effectivity date into account and its quantity into consideration for bumping demand and supply from that day on ward.

    However, In the whole process. the MRP analyst has to everytime update the effectivity date and rerun MRP plan to arrive at minimum disposition cost for quantiy reduction or obsolescence.

    But I belive, this can be done easily using BI as the date from PLM and MRP date from ERP can be ported in a datamart like schema and execute what if analysis so that the out come of the analysis and disposition with right effectivity date is update directly from PLM to ERP.

    SierraAtlantic has developed this kind of solution. which save lot of time and provides effectivty solution to customer.

  • Paolo Zotti


    the use of effectivity to manage differernt product configurations, especially occurrence (BOM) effectivity based on units, is very widely used in different industries, especially A&D (install InstrumentX on unit 4-7, and InstrumentY on units 1-3 and 8-10).

    In my opinion , this stems from the days where configurations were managed on paper, and leads to a lot of administrative overhead, especailly when you want to track configurations from the as-designed, to the should-build, to the as-built and as-maintained.

    Modern PLM systems have much better capabiltiies to manage a configurable BOM with options (for the as-designed and the should-build phase) , and the In Service (or MRO) BOM, for the as-built and as-maintained configurations.

    Especially the first one in design is now the golden standard in automotive, but the adoption of such technologies in A&D is lagging behind, because of the need to maintain legacy configuration data created with the old standards and processes; you can’t change the way a plane configuration is described, while the plane is still operating, you will have to recertify it with the authorities if you do.

    Hope this helps, Paolo

  • beyondplm

    Paolo, thanks for your comment and clarifications! Yes, I agree. I’ve seen a massive usage of effecitivity concepts for A&D and other industries where management of complex configurations is important. Date Eff. is mostly for ERP. Best, Oleg

  • beyondplm

    Paritosh, thanks for your comment and sharing information! I believe lots of optimization can be done when merging information between PLM and ERP in terms of planning. The term “operational BI” is probably suitable. Btw- are you talking about ECOLense product? Best, Oleg

  • beyondplm

    Satish, You are right! The adjustment of Revisions in PLM and Date Eff in ERP is a very challenging and complex procedure. Once is set well, it works. Company has to have a valid drawing revision associated with ERP Part is one of the most challenging tasks, in my view. Best, oleg

  • Paritosh

    @beyondplm, Yes, ECOLens Product. It is Java based Agile SDK application interfaced with Oracle APIs. However, the same can be easily done with any PLM and Any ERP in BI Mode. Even South Korea’s top electronics company uses similar approach to in optimising its supply chain costing. But the approach is little differing it uses for Supply chain Operational Measurements for parts, product at product line level. They call it as SDS system.

  • beyondplm

    Paritosh, thanks for sharing this information! Good discussions… Is there any presentation explaining more about ECOLens and optimization approach you mentioned? Best, Oleg

  • Paritosh

    @beyondplm:disqus I have sent you email with presentations of SDS system and ECOLens for your perusal.

    Let me know your views. Best regards, Paritosh

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  • Kim

    Hi Oleg,
    first I want to think you for the videos and blog you have about PLM. I think is very good and there are not a lot of people doing this.

    I wanted to ask you a “simple” question. What is then the purpose to use effectivity in parts and in BOMs? I mean I have seen some definitions but I was wondering what is the value or purpose that it brings.

    Thank you,


  • beyondplm

    Value proposition of effectivity is to filter BOM or Parts with a right context (eg. date, configuration,etc)

    Effectivity is a mechanism that define when Part can be used. Part
    effectivty is usually global (eg. you can use this electrical motor from
    date1 to date2). BOM effectivity defines that Part can be used in a
    specfic context (eg. Electrical motor is used in this specific BOM for a
    date1 to date2). Effectivty can be date, option, unit, etc. and defined
    as a filtering criteria.