PLM and ERP: Can't We Be Friends?

Recently, Joe Cocker passed away. If you don’t know, he was an iconic front-man for several rock groups in the 70’s, and he sang with a unique style. He was best known for singing covers of other people’s songs including the Beatles. One of his best known covers was of the Beatle’s song “With a Little Help from My Friends”. I am thinking about PLM and ERP today, and wondering why they can’t be better friends.

PLM and ERP are both part of most major manufacturing companies. But, their relationship can often be rocky. Both are needed to create innovative, high quality products that delight customers. But, how they are deployed across the company is often a hotly contested topic.

I wrote a blog in 2013 titled: PLM and ERP: Can’t We All Just Get Along? In this blog I talked about the often rancorous relationship that PLM and ERP have at many companies. A harmonious relationship between PLM and ERP can help provide a more efficient product development process and get more innovative products out the door faster to paying customers. 

Below are a few things that I think are important when wondering how to balance the needs of PLM and ERP:

First, it is important to understand the definition of PLM and ERP. The simplest definitions I can think of are the following:

PLM – Creating, capturing, sharing, and managing product information that relates to the VIRTUAL PRODUCT.

ERP – Gathering, coordinating, organizing, and managing the information that relates to the REAL PRODUCT.

With these two definitions in mind, what can we do to make them work together more harmoniously?

First: Make sure you are creating, capturing, sharing, and managing your information in PLM consistently, proactively, and effectively so that design personnel can always find needed information. After all, PLM is where the product design begins. If you do a bad job gathering, tracking, and sharing information at the beginning of the design process, who thinks that you will suddenly do a good job once the product is being manufactured?

Anyone who needs information must be able to find it easily and directly without knowing multiple secret information locations that no one can find. Once information is found, it must be clear, concise, and valid in order to have a positive impact on product design. If you do a good job with information, passing it on to ERP will be much more successful, and any changes that require information to come back from ERP to PLM will be accurate.

Second: There must be a way for information to flow back from ERP to PLM when changes are made. Integration can allow this to happen easily, automatically, and consistently so there is no doubt about information accuracy. Often, information is thrown over the wall to ERP, and then nothing is returned to PLM when changes are made. This leads to re-work, and does not support design re-use, which can save time and money.

Third: Work hard on the cultural change aspects of PLM and ERP relationships. Our experience has shown that there is often a cultural disconnect between PLM organizations and ERP organizations. There is often a poor relationship between these two groups. The failure of PLM and ERP integration starts with integration of the two organizations.

There is much more to this topic. I am planning to have a free webinar to discuss these items along with several others coming up on January 28, 2015.  Please join me and learn more about how you can improve the relationship between PLM and ERP. A link to learn more about his free webinar is below:

http://www.cimdata.com/en/education/educational-webinars/plm-erp-what-s-the-difference-and-why-should-you-care

Cheers,

Jim McKinney - CIMdata

PLM is a Team Sport

The other night, as I sat watching Lebron James and the Miami Heat play basketball, I was reminded of PLM. Not because of the excitement, fouls and bad language, but because basketball is a team game. The selection, implementation, and continuous improvement for PLM should also be a team game. Is this the case in your company?

First, we should recognize that the PLM team leader must occupy an important place in your company. The PLM team leader should be someone that is competent and recognized as capable and tenacious. He or she should be able to get the resources needed to make PLM happen in a significant way within the various organizations of your company.

Second, the members of the PLM team should also be subject matter experts and well-seasoned members of their own organizations. They may not spend full-time on the PLM team, but they must always be available to support PLM activities. They must always be looking at how PLM can be used and enhanced in their own organizations, and bring these ideas to the PLM team for future projects.

Third, the PLM team must continue to function even after significant roll-outs and implementation activities have finished. There is always a need for continuous improvement in the PLM space, and there must always be a leading team to make sure this happens. The roll of continuous improvement cannot be assigned to one person; all members of the team, and everyone in the company, is ultimately responsible for continuous improvement.

Best practices have shown that companies with a permanent PLM team have had far greater success with PLM than companies that do one PLM project, and then disband the team. PLM is a team game after all, and you must keep working to make is successful.

What do you think? How is your PLM team doing? Who are they? Where are they?

Cheers,

Jim

PLM vs. ERP: Can't We All Just Get Along?

Recently I've read several posts about PLM vs ERP. First, one from Oleg Shilovitsky about the differences, and one from Arena Solutions about how they might work together. We often hear this as a big challenge in our PLM certificate classes from many students. This is an important topic, and one that can cause a lot of contention in any business. I want to address some basic issues and see what you think.

PLM - ERP - What's the difference?

The most basic way that I can think to categorize the difference between PLM and ERP is this: PLM manages the virtual product and ERP manages the physical product. The virtual product must ALWAYS match the physical product, and thus the two must be seamlessly connected. This requires integrated systems that include sophisticated configuration management tools to accommodate changes and updates.

Choosing the right tools

Given the complex nature of keeping PLM and ERP synchronized at all times, we must decide which tools are best suited to do this. ERP tools tend to be very transaction oriented. Their goal is to move a product from one step to another until it is complete. ERP systems must keep track of parts inventories, resources needed to manufacture the product, available tools and processes, along with costs and scheduling of all activities. ERP tools are great at making sure all the steps for manufacturing happen on time and under budget.

PLM on the other hand is usually tied to 3D CAD models and accommodates changes, options, modifications, and frequent updates to models parts and products. PLM is also a very visual environment, with  many people looking at models, exchanging ideas, and viewing the product as it is designed. PLM is also very collaborative: a group of people must often review any updates or changes as they happen. Engineering review often happens across the globe and around the clock as many engineers and designers are involved. Understanding changes requires sophisticated visualization tools that allow models, parts, documents, and other information to be shared in real time.

PLM must also manage changes and links to CAD files, assemblies, docs, test data, software, EDA files, and more. PLM  must always provide an updated view of the As-Planned, As-Designed, As-Manufactured, As-Maintained, and other views of the product information. Product information must also be connected to the product requirements documents so there is always a link to the original specifications.

When we look at the tools needed to manage all the permutations of products throughout the product lifecycle, it is clear that PLM is much more suited to this task. PLM can always track the changes to the products out in the field, and then easily use that information to start creating the next version of the product; ERP has no such tools.

Who owns the data?

There is always a big argument about where the data should be mastered, and who should own it. The truth is, ultimately, the company owns the data; ownership changes as the product moves from one state to the next. While the product is in Design, the data is owned by the PLM system; while the data is being manufactured, the data is owned by ERP. Once the product is out the door and in the field, it is owned by the Service group, or Warranty, or whatever you want to call it. It does not really matter who owns the data as long as the most up to date version is always tracked very carefully, in PLM.

Start at the beginning

To me, it makes sense for most businesses to carefully master their data in PLM at the beginning of the product lifecycle. PLM is where the product starts, and any mistakes made here will eventually find their way into ERP. Over the years many companies have gotten use to fixing problems with unclear, incomplete, or incorrect information coming from ineffective PLM systems during the manufacturing process. Companies have also invested almost nothing in PLM when compared with the millions upon millions of dollars invested in ERP. Is it any wonder that most PLM implementations leave a lot to be desired?

PLM supports product innovation

ERP does not readily support product innovation. ERP supports innovation in manufacturing processes and technologies, but not product innovation. Innovative products are imagined and created during the PLM design activities, and not in ERP. By the time you get to ERP it is too late to add much product innovation. Commitments to product innovation are locked in during the PLM phases of product development. This supports the need to invest in more and better PLM technology to support the goal of creating more innovative products.

Conclusion

There are certainly exceptions to what I have said here. Many process industries, like CPG, food and beverage, chemicals, and others will be much more ERP-centric. Also, those companies without the goal of creating new and creative products, but only cheaper "knock-offs" will want to invest more in ERP. Products without much 3D CAD and those that have little engineering IP may not need a ton of PLM.

In my experience, most companies have under-invested in PLM. With PLM you can create innovative, higher quality products that get to market faster. If you are a manufacturing company that wants to create innovative products that delight your customers, and if your products require strong engineering design with 3D CAD models, you will want to invest more in PLM than you do in ERP.

What do you think? Have you invested enough in PLM?

Cheers,

Jim

The Basics of Configuration Management - Part II

In part 1 we talked about some of the basic steps you should take to make sure Configuration Management (CM) is working well in your company. Following strict rules around CM provides the foundation for product innovation. In this post I want to cover a few of the rules you should follow to make sure CM is helping support your business properly.

Change Processes

The first set of rules you should evaluate covers how changes are initiated, tracked, and completed. There should be as few options here as possible. Do not provide the ability for anyone to use any type of ad hoc process they choose. Two or three options is all you really need: Simple and Low Risk (75%-80%), Complex and Medium Risk (15%-20%), Complex and High Risk (0%-5%); that's about it. Audit change processes, and make sure no one is going around them for a "unique" change. There should be accountability and penalties for those who do not follow the prescribed change processes. Your system should be set up so that NO WORK CAN BE DONE unless they have come through an approved change process.

Working on change practices can have a very significant impact on your projects. Those who have excellent change management practices are much more likely to achieve or exceed project objectives. This usually leads to happier customers, and more revenue for you.

(Procsi, 2009 Best Practices in Change Management Benchmark Report)

Requirements

The most basic approach to CM is to make sure the final product matches the original requirements. There must be a way to capture these requirements, and checks to measure conformance at each stage of product development. Many companies have some requirements that initiate a product, but as the process progresses there is no linkage back to these requirements. At the end of product development a working product may be produced, but if it matches the original requirements is anyone's guess. Implement a strong PDM system that can track requirements and provide a global view of as-planned vs. as-released states. Hold people accountable for decisions they make that are not in line with these original requirements.

Baselines

Create baselines to "freeze" the product at certain points in the development process. Baselines are very important since they allow us to go back to a valid design at any time. We can analyze these baselines, share them with partners and suppliers, evaluate with marketing and sales, and use these for product reuse to start a new valid project. Most companies do not have a good way to create a valid baseline. Have you ever sent something to a supplier, and then wondered what version you actually sent them? Baselines eliminate all these problems, and allow a smooth error-free design process.

Making CM an important part of your business will provide many benefits. It doesn't happen overnight, so keep working on it. Once you make this part of how everyone works, it will become second nature. I will provide a few more insights in part III.

What do you think?

-Jim

How Will Social Media Technology Impact PLM?

I just read an article (Read it here, if you like) that highlights the amazingly fast rise of Pinterest as a social media site. I also found some interesting statistics about people's experiences with social media:

• 91% of today’s online adults use social media regularly
• 300,000+ businesses have a presence on Facebook
• 28% of smartphone owners watch video on their phone in a typical month
• It has been found:
• $15,000 in direct mail = 200 new customers
• $7500 in billboard ads = 300 new customers
• $0 spent on Twitter = 1,800 new customers
• Only 18% of traditional TV ads generate a positive ROI

Facebook, Youtube, and eBay were the three top brand searches in 2011. The most popular social networks are Facebook, Twitter, and moving into third place, Pinterest; pushing Linkedin to number four.

Facebook is #1 today: 1 in 4 page views are on Facebook. Second is Youtube for video content, and finally Google is third. What this means is that if you don't have a presence on Facebook, or Youtube, then you are missing many of the eyeballs that you need to make money.

If you have a blog, or a traditional web presence, then you need to make sure people can link between your various social personas easily and quickly; many companies do not understand this yet. Mobility is also a strong trend, as more and more people log into the internet from smart-phones, iPads, Kindles, and other mobile devices. If your web site looks like a steaming pile of moose poo-poo on a mobile device, then you will not get the kind of traction you are hoping for from your web site.

Companies are not only working on their traditional web presence, but some of the heavy-weights are getting into the social media space big-time. SAP just bought Ariba for $4.3 billion to support the cloud and mobility, Salesforce.com bought Buddy Media for $690 million, and Oracle just bought Vitrue for $300 million and then they bought Collective Intellect, all to support social clouds, mobility, and social analytics.

All of these new technologies will have a big impact on PLM. The way your users collaborate will change dramatically in the next 5 years: We will go from a predominantly email collaboration model to a cloud-based social platform model; We will see a much stronger push for mobile access to all information; We will see the emergence of Social PLM. These changes will help you, or your competitors, to be more efficient and productive; which, is up to you.

What changes do you see coming in your business?

Cheers

-Jim