PLM vs ERP

This week, Oleg Shilovitsky posed the question ‘Will PLM manage the enterprise BOM?’

PLM software and ERP software are entirely different animals.

PLM software began years ago as engineering data management software and, over time moved into product data management.  Software vendors wanting to differentiate their software created a new category called product lifecycle management.  Still, all of these programs started in engineering to manage engineering information.  It was designed to work in the engineering department.  It is in their language and follows basic engineering rules.  Most PLM software vendors are looking to increase their revenue opportunities by moving into other departments.

ERP software began as manufacturing resource planning software [MRP].  Initially, the MRP software managed the resources of a manufacturing company.  The software focused on 2 departments – finance and manufacturing.  It is in their language and follows the rules of each department.  These departments use the software daily if not all day.  ERP software vendors are also looking to increase their revenue opportunities by moving into other departments.

Today, you will find the latest manufacturing bill of materials [MBOM] in a manufacturer’s ERP software.  I don’t see that changing anytime soon.

In most companies, there is company politics that has to be overcome.  Years ago, I was first told that ‘he who has the data has the control’ and that doesn’t seem to have changed.  Manufacturing will not be receptive to having PLM be the location of the manufacturing BOM.

Finance needs access to the BOM in order to order materials and ERP is where that happens.

Manufacturing needs access to the BOM to plan the factory floor and ERP is designed to do that.

And then there is the arrogance of PLM vendors believing that they can do ERP better or ERP vendors believing that they can do PLM better.  In each case, there will be compromises made that are not in the best interest of the customer.

The cross over could happen but I don’t expect it anytime soon.

Your Thoughts?

Advertisements

3 thoughts on “PLM vs ERP

  1. Scott I am not sure I agree with all the statements. In modern business and PLM belongs to that, it should not be about who owns the data, but about sharing data, where one discipline perhaps initiates a part or BOM and other discipline enrich the information. Either by adding more metadata (attribute values) or by connecting more information (supplier info / test and validation specs / CAD representations).

    In the world of data sharing, I believe there are two domains. One where data is enriched, iterated and defined (PLM) and the domain where released product data is used to execute (ERP).

    It is a simple divide (but cultural a chasm) which I use when coaching PLM implementations = the result – the MBOM can be in PLM or in ERP.

    I wrote about it in the past in my blog: Where is the MBOM

  2. The heart of the matter!!! There is a true place for everything! The owners of master data need to agree where the ‘hand shake’ resides!! The agreement of this changes from company to company! EBOM (engineering) and SBOM (service) should be in PLM, but MBOM (manufacturing) should reside in ERP. MBOM should begin to be formed in PLM but as the ‘hand shake’ takes place additional ERP data needs to be added to hold and complete the MBOM.

    I have been in many companies and experienced many different ERP applications (and programmed some ERP functions myself) and the true answer comes from how and when the ‘hand shake’ of data comes into place. Also, ERP falls short to be able to keep more than one ‘true’ version of BOM in master record at a time. Even it it stays true to form, fit and function.

    The need for both ERP and PLM becomes more evident and should remain in harmony with each other!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s