Today, more manufacturers understand the integration of product lifecycle management (PLM) and enterprise resource planning (ERP) solutions improves efficiency and quality of product development delivery; this is done by ensuring the bill of materials (BOM) data captured in the PLM system is available in real-time across the enterprise to internal and external supply chain teams.
The value of integrating ERP and PLM is an old story that we’ve written about plenty of times before. But many innovative product companies now ask whether they should use an ERP or PLM solution instead of investigating how to most effectively integrate the two solutions to fully realize the value in both.
What’s complicated this growing confusion whether to use ERP or PLM is that the capabilities of PLM solutions have become so comprehensive, mature, and wide ranging, many manufacturers are baffled which of these two enterprise solutions is best designed to solve their specific manufacturing challenges. This perspective is validated by IDC analyst Joe Barkai, “We will see more and more PLM companies encroaching into what has traditionally been ERP territory.”
Arena believes the true value of integration occurs when product development and execution processes are functions of PLM and ERP alike in a seamless, end-to-end solution. This integration links together the critical upstream and downstream processes and data between classically disparate user groups who work in different enterprise systems.
To achieve this goal, Arena has just launched Arena API, a bi-directional API that provides an ideal framework and integration environment between PLM and ERP for the release and bi-directional data sharing from one system to the other. This allows innovative product companies to streamline efficiencies for developing superior products.
The benefits of integrating ERP and PLM — and the impact that it has to a manufacturer’s success — can be expected to grow as ERP and PLM are further integrated to enable bi-directional data sharing.
Gartner confirms this saying, “In addition to PLM’s inherent value, PLM decisions have strong influence on the business model and benefits that can be realized by ERP, SCM and CRM applications in downstream business processes; in that sense, PLM is the most fundamental business application in manufacturing. Since PLM fundamentally defines bills of materials, it influences the efficiency of ERP and supply chain activities.” (Gartner Group, Inc. “PLM’s Business Value Is Fundamental, Yet Still Not Well Understood.”)
The difference between ERP and PLM is that ERP executes and optimizes manufacturing and distribution processes involving physical assets; however, ERP is less effective than PLM at managing product specific design changes, including data from the product’s BOM.
Another difference between PLM and ERP is that PLM solution’s features and functionality are leveraged throughout product lifecycle, from the design stages into manufacturing process. A model ERP/PLM integration combines the capabilities of the PLM system to manage and update all engineering content and processes and all of a product’s BOM with the ERP system’s management of the physical product. (See areas of focus in the chart below.)
An example of a successful ERP and PLM integration is the high-profile success of TrueNorth Avionics, the aircraft telecommunication device manufacturer. Supply Chain World magazine examined how Arena’s integration with NetSuite allowed TrueNorth to soar high above the competition.
“Integration between a cloud product lifecycle management application (Arena) and NetSuite streamlines product development and planning. The results are striking. TrueNorth added high-profile customers, including several heads of state and Fortune 50 fleets, and expanding across Canada, the U.S. and Europe, and it has more than 80 percent of large aircraft telecommunications market share.”
Integrated ERP/PLM systems, such as Arena and NetSuite in the case of TrueNorth, can provide streamlined continuous processes across the lifecycle of innovation demanded by a modern manufacturing operation. This integration provides innovative product companies a significant competitive advantage, enabling manufacturers to reduce ECO cycles, lower costs, and accelerate time to market.