What I learned this week … came from a question in response to my post on The Evolving Roles of ERP and PLM in Manufacturing. The question came from a knowledgeable source, and I had to think hard before answering. 
I thought I would share my thoughts here instead of responding via e-mail for two reasons. The first is I think there are other questions that should be asked first, and other readers might get some value out of the answer. The second is that some of you might be able to answer the initial question better than I can. It also caused me to go back and review a report from five years ago to refresh my memory on my recommendations, and I think they hold up pretty well today (sigh of relief).
The Question
The question as asked was “For a mid-size company that has a complex Bill of Materials, are there specific ERP systems that integrate well with CATIA and SmarTeam?” It was a good question, and I started developing a mental list of solutions that I thought might fit will with SmarTeam. Then, a red flag popped up in my head. What level of priority are we giving integration to PLM in making an ERP decision? As much as I firmly believe in the need to integrate ERP and PLM, making the right choice of each system overrides any ease of integration between the two. As I wrote in my first paper on this topic titled The Complementary Roles of ERP and PLM “relative capabilities should be based on analysis of products and references, as not all systems are alike” and “clearly a manufacturer can’t choose between product innovation and corporate execution – both are critical elements of the manufacturing business model.”
Implications for Manufacturers
For manufacturers that are looking for an ERP system, please put PLM integration on your list of priorities. But also consider where in the priority list it should really be. Having the wrong ERP system well integrated to PLM is far worse than having the right ERP system without integration to PLM. ERP is essential to running the modern manufacturing enterprise. And as much as everyone likes to call ERP a commodity and say they are all the same, they are not. If I was advising a company to look for an ERP system, here are some things I would put on the priority list before integration with PLM. If I thought about it harder, I might add some more, but these are off the top of my head. Part of this was included in the original question, and I am sure they would have taken these into consideration as well, but I thought it was worth sharing:
Industry – Does the ERP system work in my industry? How many references do they have like my company?
Manufacturing Model – Am I a make-to-stock, make-to-order, assemble-to-order, engineer-to-order, or project-based job shop manufacturer? ERP requirements for each are very different.
Sales Model – Do I sell directly or through a distribution network? Do I rent or lease products in addition to selling them? Does the ERP system address those? What about service?
Company Size – Does the solution fit the complexity of my business? If I am a small to midsize business (as many SmarTeam customers are) then do I really want a highly complex ERP system designed to support multi-nationals?
Geography – Particularly if the ERP is supporting financials, does it meet the regulatory and accounting needs of my country. Taxation? Human resources? Are they up to date?
Technology – Can I support the technology? Does it fit with my strategic IT infrastructure?
Support – This isn’t about the product itself, but about the whole solution (including training, hotline support, new releases, etc.) Is their support sufficient for my needs? Can I find local resources to help? As I said in the original paper, “For best results, the analysis of ERP and PLM should extend beyond the product into the software vendor’s capabilities for training, provision of best practice templates, business knowledge and solution implementation.”
After that, I would look for the ability to easily integrate with other solutions. If there was pre-integration with my existing PLM system that would be great. But first, I would make sure that I bought the right ERP system. By the way, this goes the other way as well. I would not buy a PLM system just because it came pre-integrated with my ERP solution, or even because it came from the same vendor. First it has to work to support it’s intended function. Then, and only then, is it worth integrating to other enterprise systems.
So that is how I feel about integrating ERP and PLM, I hope you found it interesting. I realize I jumped up on my soapbox a bit here, but I thought it was important that people understood that I wasn’t promoting integration over functionality. And as for the original question, please feel free to contribute your thoughts on which ERP fits well with SmarTeam and I will pass them along (with my above caveats that it should be checked first for other factors).
Good analysis and to the point. I fully agree your ERP should be focussed on your business needs and using the PLM module from this ERP vendor (if they provide one) is not a natural choice for me.
When I look to the major ERP vendors most of them have PLM as an add-on in their portfolio, not always with the strategic focus on PLM. The module is their to be able to have a tick in the RFQ. Main question I am always asking customers who want to implement a PLM module coming from the ERP vendor is: Do they have a PLM vision also in execution ? Are there in the top managment of these ERP companies executives that can push PLM as a strategey. If not, the PLM module will be probably an add-on with no real focus
I also understand it is hard to answer the question about which ERP system integrates well with SmarTeam and CATIA. Although I can change the question . In fact we are talking about can SmarTeam and CATIA handle complex EBOM-MBOM structures – an option to be investigated customer specific and can SmarTeam connect to specific ERPs. The last question is probable for most ERP systems YES WE CAN.
In several posts in my blog I wrote about what I believe should be a proper connection to ERP and handling of the MBOM
Best regards
Jos
I agree with you 100% that ERP selection should be based on the value addition to the company rather than integration to the PLM system. With the wide variety of integration technologies available today it is possible to integrate systems much more easily. I would recommend any ERP system that fits their business needs and have the capability of hosting web services. I know Enovia offer webservices capabilities and there are lot of middleware software in the market that could be used to integrate the two systems. If not there is always the “file drop” integration!
Thank you Jos for your comments. Your point about a PLM strategy is a good one. Regardless of whether the software is up to the task, if the business looks at PLM as a module of ERP they are likely missing the point by a long distance.
And thanks for the feedback on integrating with SmarTeam. Are there any particular ERPs that have packaged integration to SmarTeam (out of the box, or close to it?)
Best,
Jim
Satish,
Ideally the integration is more real-time such as web services, but depending on the needs a file transfer approach may suffice as well. From my research, I have seen everything from “swivel chair” integration (manually rekeying) to some very sophisticated hub-and-spoke approaches. Regardless of the integration approach, I couldn’t agree more about selecting the ERP based on business value.
Thank you,
Jim
Jim,
An answer to your question related to exisitng OOTB exchanges.
The SmarTeam Express offering contains a cinfigurable XML Import/Export function targeted to work with an ERP exchange. As a Proof of Concept I was involved in an integration with Axapta, which with the right modules on the Axapta side completed the solution without customization. More configuration and deciding on the bi-directional scenario
Regarding SAP there is a Bussiness Process Accelerator (BPA) which comes as an add-on on the SmarTeam environment and which has been implemented successful in many mid-market companies around the world
Other ERP integrations are mostly done through point-to-point integrations by the implementer unless the company has a middleware strategy. In that case the gateway adapter is used with commercial available adapters on the ERP side (Orcale, JD Edwards, SAP)
Best regards
Jos
Hi Jim ,
Good analysis – what I would like to add is that cost of having integrations through third party tools – Sometimes cost of having third party tools over longer run can prove to be expensive over the applications which have inbuilt intrgrations.plus it adds one more level of applications in enterprise architecture.
Although we can’t have seamless integrations between PLM and ERP its good to have check atleast technical compatability between two on some parameters like what level of numbering flexibilty does ERP supports , what can be maximum length of decription it can support.
Enjoy,
Prashant