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
