The Integrated ERP-PLM Strategy

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Insight: The Integrated ERP-PLM Strategy: Closing the Loop on Product Innovation reviews the importance of an integrated ERP-PLM strategy to provide a rapid, confident flow of innovation information to and from Manufacturing. The paper discusses a strategy to close the loop between Engineering and Manufacturing to get the most business value from innovation in all its forms.

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Table of Contents

  • Introducing the Issue
  • What to Expect from ERP
  • What to Expect from PLM
  • Closing the Loop on Product Innovation
  • Developing the ERP-PLM Strategy
  • Conclusion
  • Recommendations
  • About the Author

Introducing the Issue

The modern manufacturer relies on strong enterprise systems to stay competitive in today’s global, challenging, and uncertain markets. Of all of the solutions that manufacturers employ, ERP and PLM are the primary systems driving product profitability. As reported in Tech-Clarity research report The Complementary Roles of ERP and PLM, ERP and PLM play important, distinct, and complementary roles. The integration of these solutions has increased and advanced as manufacturers’ use of the systems has matured. Combined, ERP and PLM can provide greater value, closing the loop on product lifecycles and product innovation. After all, a major product innovation such as introducing a new product can’t contribute any revenue if the enterprise can’t execute on sourcing, manufacturing, and selling it effectively. PLM’s role of innovation and ERP’s role of execution are not only complementary – they are dependent on each other.

As clear as the lines between ERP and PLM have become, innovation is not limited to Engineering. While major new product developments typically come from Engineering or R&D, Manufacturing and Service organizations frequently identify smaller innovations that can improve quality or reduce total lifecycle costs. These day-to-day innovations, such as minor part revisions to improve manufacturing efficiency or make products more robust, are frequently implemented in a disjointed way. For example, drawings may be manually marked on the shop floor or manufacturing bills of material (BOMs) may be changed in ERP independently from the engineering BOM. This leads to disconnects between Engineering and Manufacturing and prevents capturing the innovation for future products.

An integrated ERP-PLM strategy, on the other hand, provides the opportunity for a rapid, confident flow of innovation to and from Manufacturing. In today’s lean and competitive business environment, companies can’t afford a disconnect. Manufacturers must develop a strategy to close the loop between Engineering and Manufacturing to get the most business value from innovation in all its forms.