Future digital transformation will reshape boundaries between PLM, ERP and MES. But how..?

Future digital transformation will reshape boundaries between PLM, ERP and MES. But how..?


Digital environment is changing habits and behaviors of people. Think about how your individual behaviors changed for the last decade. Mapping application are helping us to navigate and avoid traffic even if we drive in our own neighborhood. We call Uber after comparing prices on parking in the nearest location and leave a car in the garage. We check prices on Amazon before buying something in a store. “IoT buttons”can help us to deliver supplies on time. This is only a short list… I’m sure you can bring more examples here.

Same happens in manufacturing, which is transforming to become digital and connected. Manufacturing companies are facing significant challenges in modern digital environment. Cost competition, distributed environment, global market and suppliers. To be efficient and competitive manufacturing companies should think about how to optimize business processes across the organization. It means connecting dots between application silos. 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.

In one of my old articles two years ago, I predicted that manufacturing future will depend on solving old PLM-ERP integration problem.

Fast forward in 2016…. My attention was caught by the following article – How Siemens PLM is prepared to help customers’ digital transformation published by Siemens PLM community blog. The article speaks about connecting dots and future integration between ERP, PLM and MES. The following passage is a key in my view.

Companies need to understand that three of their major IT systems can no longer be viewed as separate entities. Product lifecycle management (PLM, enterprise resource planning (ERP) and manufacturing execution systems (MES) will not deliver as much value to companies if they continue to be improved independently of one another. Instead, all three systems need to be incorporated into a closed-loop process.

Later in the article we can learn what is the vision of Siemens PLM to solve the problem:

Today, product baselines – including as-designed, as-built and as-maintained baselines – are kept in different systems. But to ensure traceability in the future, this information will be linked together.


For this successful integration to occur, companies will need a Digital Enterprise Platform that includes major enterprise software tools, such as PLM and MES, to master technical product data information and its processes along the product lifecycle, including manufacturing with closed loops. ERP will still play an important role and be more tightly integrated with PLM and MES than it is today. However, ERP will focus more on released data and will manage logistics and financials processes. Compared to today, it will have reduced functionality for engineering and manufacturing operations.

I wonder about the following passage – “ERP will still play an important role…“. I’m pretty sure this is a way you say that ERP won’t be important as it was before.

The article made me think about re-shaping of enterprise software boundaries. The digital enterprise platform is a place where all activities around product data will be located. And Siemens PLM clearly sees Teamcenter for that role. Which makes a lot of sense. But, it leaves very limited space to ERP to “manage released data”. In the era of IoT and connected products, released data is pretty much live and needs to be connected to other product data.

In the vision of Teamcenter to keep all product data and snapshot data to ERP system for reference? What will be the value of this snapshot if master data will remain in PLM (Teamcenter) backbone? These and many other questions are coming to my head and I don’t have immediate answers. It reminded another article I published back in 2014 – PLM fight over BOM will require to solve data synchronization problem.

The problem of data synchronization between different BOM representations is a real one. The level of complexity is huge. PLM companies are trying to leverage their sophisticated data platform to control the overall product data complexity. The fight is two fold – technical and political. The heart of every CIO is usually with ERP system. PLM companies need to think how to deliver technologies to solve the level of integration complexity.

What is my conclusion? Modern PLM suites will try to reshape a current boundary of data silos between PLM, ERP and MES. The vision of digital transformation requires from PLM vendors to have a full control over the integrated product data in a way it can be optimized and used between organizations and business functions. The vision is grandiose, for sure. Do you think manufacturing companies are ready for such transformation? An alternative is not clear as well since ERP systems cannot manage an integrated engineering and manufacturing BOM. The time to reshape boundaries are coming. PLM systems will have to improve their data management capabilities to keep up with a growing demands for product data complexity and scale. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

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.


Share This Post