Cutting Corners 101: Forcing ERP to do PLM's job

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ERP PLM

Don't fall into the trap of using the wrong tool for the job!

Why would I want to take the time to learn and implement a new tool when I have one that is doing the job . . . kind of . . . at least for now?

Sound like you?

We all have cut corners at some point in our lives— from using a half-broken umbrella to duct-taping a leaky pipe. Shortcuts are called that for a reason—they allow us to get a job done quickly and with less effort. But when it comes to your manufacturing process, cutting corners will ultimately cost you more.

Are you using the wrong tools for the job?

It’s understandable that getting products to market as efficiently as possible is a top objective. But don’t get so caught up in your rush to market that you don’t take the time to implement the right tools for the job.

One of the most common examples we see of this mistake is managing product records and business financials with the same system (usually ERP.)

ERP and PLM systems are not interchangeable

ERP and PLM both enable manufacturing companies to manage their design and production processes, but these tools are designed to work together, and aren’t an either/or solution. While PLM systems focus on the product record—the BOM, AML and revision history, ERP systems focus on the financial roadmap.

PLM—the system of record for your product

Includes:

  • Bill of materials (BOM) management

  • Item management

  • Change management (ECR, ECO, ECN)

  • Document management

  • Compliance management

ERP—the system of record for your financials

Includes:

  • Purchasing

  • Accounting

  • Inventory management

  • Order management

  • Sales forecasting

Knowing which business systems to use for which purpose, and getting your systems in place early is the best way to ensure your product makes it to market with minimal setbacks.

When should I use a PLM system?

A PLM system helps companies maintain an accurate product record throughout the entire manufacturing process by managing parts lists, BOMs, revision history and vendor lists. Any company who designs and produces complex or engineered-to-order products, manufacturers in-house, uses outside resources like CMs and suppliers or has multiple product lines will benefit from using PLM to manage their product record.

When does an ERP system come into play?

ERP systems help companies manage business financials and assist in sales forecasting, manufacturing planning and execution, customer care and support and shipping logistics. Companies that manufacture in-house or produce complex engineered-to-order products typically use ERP to share information between their finance, sales and manufacturing departments.

How do ERP and PLM systems fit together?

ERP and PLM systems provide the highest level of efficiency when integrated together.

Because PLM is intended to manage the development of your product and ERP is intended to manage the resource planning of your finalized design, it makes sense to start with a PLM system. After all, it’s a waste to plan out the resources for a product design that is still undergoing revisions.

Below, you can see how everything flows through PLM and then into ERP.

plm-erp

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About the Author

Alyssa Sittig
Alyssa played an instrumental role in the development of the Arena Blog and social media channels from 2011 to 2012. Joining the team with a background in public policy, Alyssa ... Read More 

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