PLM & ERP: What Is The Difference, And Why Should You Care?

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PLM LeadershipPLM & ERP: What is the Difference, andWhy Should you Care?CIMdata PLM Leadership Webinar Series28 January 2015#cimdatawebinarJim McKinney, PLM Leadership Practice Manageremail: j.mckinney@cimdata.comTel: 1.734.668.9922Global Leaders in PLM Consultingwww.CIMdata.comCopyright 2015 by CIMdata, Inc.1Copyright 2015 by CIMdata, Inc.

Our Mission.Strategic management consulting for competitive advantage in global marketsCIMdata is the leading independentglobal strategic management consultingand research authority focusedexclusively on the PLM market.We are dedicated to maximizing ourclients’ ability to design and deliverinnovative products and servicesthrough the application of PLM.Copyright 2015 by CIMdata, Inc.2

Presenters’ ProfileYour presenters’ professional background Jim McKinney, PLM Leadership Practice Manager 30 years of experience in almost all areas of PLM Has held positions in MCAD support, PDM implementations,product marketing, training, competitive intelligence, andconsulting to companies large and small around the globe Holds a B.S. in Design Engineering Technology from BYUCopyright 2015 by CIMdata, Inc.3

Topics to DiscussWhat is PLMWhat is ERPEngineering-centric vs. Manufacturing-centricKey Integration PointsHow to Leverage PLM and ERP Integrationto Improve InnovationConcluding RemarksCopyright 2015 by CIMdata, Inc.4

CIMdata’s Definition of PLM.PLM – integrating people, processes, information, and business systemsStrategic business approachNOT just technologiesConsistent set of business solutionsCollaborative creation, use,management & dissemination ofproduct related intellectual assetsAll product/plant definition information – the virtual productMCAD, AEC, EDA, CASE, analysis, formulas, specifications, portfolio, docs, All product/plant process definitions – the virtual processesProcesses that plan, design, produce, operate, support, decommission, recycle, Supports the extended enterpriseSpans full product/plant lifecycle, from concept to end of lifeCopyright 2015 by CIMdata, Inc.5

What Products Are We Talking About?Companies can’t afford to only think about traditional discrete products!PLM spans the life of any “product”Manufactured products—automobile, computer, pill, soda, hatProjects—building, bridge, highwayPlants—oil refinery, offshore platformAssets & Facilities—airport, railway system,utility distribution network (e.g., electricity, telecoms,water, gas)Others Copyright 2015 by CIMdata, Inc.6

PLM Supports the Complete LifecycleEvery part of the product lifecycle provides PLM innovation ngineeringSimulation &ValidationRe-purpose, Re-use,Re-store, Re-tool,etc Build andProduceDisposal &RecyclingMaintenance& RepairIn-serviceOperationSales &DistributionTest &QualityPLM Solutions—Information Management across Media, Process, Time, Geography, & EnterpriseCopyright 2015 by CIMdata, Inc.7

What is ERP?Enterprise Resource PlanningTransaction-based activity to create real productsIncludes planning, manufacturing, and logisticsManages all processes that manufacture productsControls all aspects of manufacturing including inventory,purchasing, process planning, production scheduling,warehousing and delivery, human resources,finance, configurations, effectivitystatus, and othersCopyright 2015 by CIMdata, Inc.8

What is ERP?Enterprise Resource PlanningFinancialsHumanResourcesInventory &WarehouseSales &DistributionMfg. Process& shipCopyright 2015 by CIMdata, Inc.CustomerRelationship9

Intellectual Asset are at the CoreIntellectual assets are the organization’s product/process gementPortfolioManagementIntellectual PhysicalAssetsAssetsProduceCustomer arket/SellCopyright 2015 by CIMdata, Inc.ProductionSuppliers10

PLM’s Position in the EnterprisePLM and an enterprise’s information management anagementPortfolioManagementProduct/People,Process Finances, &Definition FacilitiesProduceERPCustomer ngMarket/SellCopyright 2015 by CIMdata, Inc.ProductionSCMSuppliers11

Major IT Enterprise Domains EvolveIntellectual vs. deliverable asset management – astingCRM PLMERPDeliverableAssetsPhysical ProductIntellectual AssetsVirtual ProductSCMDesign ChainCollaborationSupply ChainLogisticsCopyright 2015 by CIMdata, Inc.12

Major IT Domains EmergeIntellectual vs. deliverable asset managementIntellectual AssetsVirtual ForecastingDesign ChainCollaborationERPDeliverableAssetsPhysical ProductSupply ChainLogisticsCopyright 2015 by CIMdata, Inc.13

Major IT Domains EmergeIntellectual vs. deliverable asset managementIntellectual AssetsVirtual ForecastingERPDeliverableAssetsPhysical ProductSupply ChainLogisticsCopyright 2015 by CIMdata, Inc.Design ringOperations14

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise DefineBuildServiceIntellectual AssetsDeliverable AssetsCopyright 2015 by CIMdata, Inc.15

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise initiativesDefineProduct &Project uctureManagementDigitalProduction &AutomationServicesManagementSupplier ng ToolsLifecycle ProcessManagementPart/DataManagementBuildCopyright 2015 by CIMdata, Inc.16

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise initiativesCASELifecycle ProcessManagementDigitalProduction &AutomationServicesManagementSupplier uctureManagementServiceOffice &TechnicalPublicationsToolsToolsProduct &Project Portfolio MDA & IndustrialDesign oductBuildDefinePlanCopyright 2015 by CIMdata, Inc.17

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise initiativesPLMVirtualProductProduct &Project PortfolioManagementEDAToolsCASEToolsMDA & IndustrialDesign ToolsRouting Mgmt &Process DevelLifecycle ProcessOffice &TechnicalPublicationsToolsProductionSimulation ty EnginFacility Planning& DesignNC, PLC, & RoboticsS/W Design & ValidateTool & FixtureDefinition & MgtServiceServicesManagementWork InstructionDefinitionSupplier oductBuildDefinePlanCopyright 2015 by CIMdata, Inc.18

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise ductVirtualProductEDACASEIdea Mgt &Office & TechnicalDocumentClaims &ToolsTools evelopmentClassificationMDA & Industrial DevelopmentFacility PlanningRequirementsStrategicPackaging,Design ToolsCollaboration& Design AssetProduct Planning Mgt & Sys EnginArtwork &ProductionCatalog Product Release Routing Mgmt &MgtLabelingSimulation &MgtProcessDevelKnowledgeProductMaintenance ProcessConceptual & Change MgtCost Quotation Analysis Capture & ReuseAnalyticsFormulation,RecipeDef & ValidateProduct StructureTest &MgtNC, PLC, & Robotics& Ingredient MgtMgtValidation Mgt S/W Design & ValidateQuality EnginSpecificationCompliance VisualizationWork InstructionStrategicMgtTool & FixtureMgtDefinitionProductOptions,VariantsProject PortfolioDefinition & MgtCosting&ConfigMgtOther MgtPartMultiple BOMDeliveredMgtStrategicMgtContent Mgt ProjectSupplier SourcingMgtMgtCopyright 2015 by CIMdata, Inc.19

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise initiativesDefinePlanBuildServicePLMSales Idea Mgt &Office & TechnicalDocumentClaims &ToolsTools evelopmentClassificationMDA & Industrial DevelopmentFacility PlanningRequirementsStrategicPackaging,Design ToolsCollaboration& Design AssetProduct Planning Mgt & Sys EnginArtwork &ProductionCatalog Product Release Routing Mgmt &MgtLabelingSimulation &MgtProcessDevelKnowledgeProductMaintenance ProcessConceptual & Change MgtCost Quotation Analysis Capture & ReuseAnalyticsFormulation,RecipeDef & ValidateProduct StructureTest &MgtNC, PLC, & Robotics& Ingredient MgtMgtValidation Mgt S/W Design & ValidateQuality EnginSpecificationCompliance VisualizationWork InstructionStrategicMgtTool & FixtureMgtDefinitionProductOptions,VariantsProject PortfolioDefinition & MgtCosting&ConfigMgtOther MgtPartMultiple BOMDeliveredMgtStrategicMgtContent Mgt ProjectSupplier SourcingMgtMgtInventory & WarehouseMtgFinancialReporting & MgtProcurementHuman s gCustomerCapacityChange Mgt Relationship MgtPlanningMaintenanceProductionSupply ChainFeedbackSchedulingMgtCopyright 2015 by CIMdata, Inc.20

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise initiativesBuildDefinePlanServiceExecutionPLMSales Idea Mgt &Office & TechnicalDocumentClaims &ToolsTools evelopmentClassificationMDA & Industrial DevelopmentFacility PlanningRequirementsStrategicPackaging,Design ToolsCollaboration& Design AssetProduct Planning Mgt & Sys EnginArtwork &ProductionCatalog Product Release Routing Mgmt &MgtLabelingSimulation &MgtProcessDevelKnowledgeProductMaintenance ProcessConceptual & Change MgtCost Quotation Analysis Capture & ReuseAnalyticsFormulation,RecipeDef & ValidateProduct StructureTest &MgtNC, PLC, & Robotics& Ingredient MgtMgtValidation Mgt S/W Design & ValidateQuality EnginSpecificationCompliance VisualizationWork InstructionStrategicMgtTool & FixtureMgtDefinitionProductOptions,VariantsProject PortfolioDefinition & MgtCosting&ConfigMgtOther MgtPartMultiple BOMDeliveredMgtStrategicMgtContent Mgt ProjectSupplier SourcingMgtMgtInventory & WarehouseMtgFinancialReporting & MgtProcurementHuman s gCustomerCapacityChange Mgt Relationship MgtPlanningMaintenanceProductionSupply ChainFeedbackSchedulingMgtCopyright 2015 by CIMdata, Inc.21

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise ysicalProductVirtualProductEDACASEIdea Mgt &Office & TechnicalDocumentClaims &ToolsTools evelopmentClassificationMDA & Industrial DevelopmentFacility PlanningRequirementsStrategicPackaging,Design ToolsCollaboration& Design AssetProduct Planning Mgt & Sys EnginArtwork &ProductionCatalog Product Release Routing Mgmt &MgtLabelingSimulation &MgtProcessDevelKnowledgeProductMaintenance ProcessConceptual & Change MgtCost Quotation Analysis Capture & ReuseAnalyticsFormulation,RecipeDef & ValidateProduct StructureTest &MgtNC, PLC, & Robotics& Ingredient MgtMgtValidation Mgt S/W Design & ValidateQuality EnginSpecificationCompliance VisualizationWork InstructionStrategicMgtTool & FixtureMgtDefinitionProductOptions,VariantsProject PortfolioDefinition & figMgtOther MgtPartScheduling & ReportingMultiple BOMWork t Mgt ProjectSupplier SourcingProduction & QualityMgtMgtFactory AutomationTracking & ReportingSales ForecastingProductionProductionInventory & WarehouseProductRampupLogistics ringCustomerProcurementFinancialCapacityChange Mgt Relationship MgtReporting & MgtPlanningMaintenanceProductionHuman ResourcesSupply ChainFeedbackSchedulingMgtCopyright 2015 by CIMdata, Inc.22

Major IT Domains EmergePLM footprint overlaps and integrates with other major enterprise PhysicalProductExecutionERPCopyright 2015 by CIMdata, Inc.23

A PLM-ERP Model to ConsiderWhere does your company fit?Is the dominant contributor to product cost, quality,delivery time, etc.—development or manufacturing?ManufacturingCentricProduct Design ImpactDominanceLowERP PLMERPPLMHighEngineeringCentricLowERP PLMManufacturing ImpactDominanceCopyright 2015 by CIMdata, Inc.High24

Engineering-Centric CharacteristicsCompanies that focus on the definition of productResources focus on product design, engineeringfunctions, and processesView design and engineering of their productas a competitive advantageDevelop products with high engineering contentHigh investment in design process improvementsTend to design complex and innovative productsFocus on systems rather than parts and componentsHigh investments in skilled engineering resourcesIterative, rapid design processCopyright 2015 by CIMdata, Inc.25

Manufacturing-Centric CharacteristicsCompanies that focus on the product productionResources focus on manufacturingfunctions & processes flexible, agile, etc.Focus on improving purchasing, assembly,and distribution mechanismsView their manufacturing capabilities as their competitiveadvantageEngineering and design resources are often contractemployeesEngineering and design activities are frequently out-sourcedCopyright 2015 by CIMdata, Inc.26

How Industries AlignMapping industries onto the PLM-ERP ModelAuto Product Design sumerProductsAircraft PLMManufacturing ImpactDominanceHighAutomobilesComputersCopyright 2015 by CIMdata, Inc.27

PLM and the Engineering-Centric ModelPLM solutions are designed to support the engineering-centric operating modelPLM solutions provide a solid support infrastructure forengineering-centric companiesPLM’s designed-in flexibility allows them to be customized tosupport ever-changing product definition environmentsPLM solutions leverage the use of engineering methodologies,such as concurrent engineering and IPDNew technologies pushing the need for product design focusedsolutions: IoT, mobility, MBD, Systems Eng, Servicability, anufacturing ManufacturingEngineeringOperationsERPCopyright 2015 by CIMdata, Inc.28

PLM Integration VisionAn enterprise vision encompasses multiple technology integrationsEnterprise PLM ProgramEnterprise PLM onLocal DataManagerApplicationALocal DataManagerApplicationBApplicationCCopyright 2015 by CIMdata, Inc.Local DataManagerApplicationn29

Types of IntegrationsCIMdata defines three levelsEncapsulation Application files are recognized and the application can be launched by PDMInterface PLM and the application can exchange files and some metadata automatically(without user intervention)PLM functions are provided via the application’s menusData is passed one-way to PDM structures by CAD applicationsIntegration Provides full, automatic exchange of all types of product data and metadataApplication-specific data (such as product structures) are 2-way associativeand managed by the PDM solutionAll PLM functions are available in the applicationThe user works in a consistent environmentCopyright 2015 by CIMdata, Inc.30

Levels of Integration ScopeAn integration us and FunctionsFile Capture and Control - Data Element ManagementUnidirectional Metadata& BOMBi-Directional Metadata& BOMCopyright 2015 by CIMdata, Inc.31

Generic Enterprise PLM ArchitectureTurning vision and strategy into an enterprise solutionOutput & ArchivalCSMBYODLegacy .3Extra-company4SneakerNetDistributed SitesCopyright 2015 by CIMdata, Inc.32

PLM & ERP: A Key IntegrationPLM and ERP must coexistMany users see an overlap and are confusedAs PLM and ERP implementations expand,the overlap of users and capabilities increasesPLM and ERP offer a major opportunity for improvedenterprise integrationClassificationPart InformationPLMProduct StructureWorkflowERP/MRPProgramManagementCopyright 2015 by CIMdata, Inc.33

Information Portal ApproachData interfacing providing information aggregation through the WebProvides much of the value of integration, but at lower costand more quickly (e.g., using MS SharePoint as a portal)Browser is used to present information from multipleenterprise systems and repositoriesE.g., stock or cost information from ERP, viewing drawings from PLMProvides limited data control, limited data integrity, and nointegration for processesA potentially cost-effective starting point for integrationPLMERPCopyright 2015 by CIMdata, Inc.34

Integration ApproachVarious approaches to integration may be used successfullyPLM integrations to enterprise systems may be accomplishedwith different levels of “tightness”Some integrations are merely one-way transfers of information (e.g., fromdesign to production)More extensive integrations support two-way information flows (e.g., productdesign data to ERP)Establishing clear operational processes is critical to successRequires integration of information & processesPLMPLMEnterpriseSystemPLMCopyright 2015 by CIMdata, Inc.ESEnterpriseSystem35

Integration ScenariosThere are six primary enterprise integration scenariosWorkgroup/Departmental LevelEnterprise/Extended Enterprise Level1.CAxERP2.CAx LDMERP3.CAx PDM4.CAxPLM ERP5.CAx LDMPLM ERP6.CAx PDMPLM ERPERPCopyright 2015 by CIMdata, Inc.CAx Computer-Aided “x”ERP Enterprise Resource PlanningLDM Local Data Mgt.PDM Product Data Mgt.PLM Product Lifecycle Mgt.Cost, Time &ComplexityIncreasesPossible Integration Area36

How to Leverage PLM ERP for InnovationIntegration planning supports innovationProduct design information can be used to prepare andinform early process planning activitiesEarly detection of product design issues can lead to moreinnovative ideas and higher quality productsPast changes/fixes in ERP can guide PLM activities andproduce more customer-centric innovationWarranty and claims information can lead to innovative ideasthat support product design and servicesChanges can be moved earlier in thedesign process with linkages to ERPNew technologies require integrationCopyright 2015 by CIMdata, Inc.37

Concluding RemarksIntegrating PLM & ERP presents many opportunities for innovationUnderstanding the difference roles of PLM and ERP can leadto a beneficial linkage between themChoose the best areas for integration to gain the advantage inyour business; you can’t do everythingIntegrated PLM and ERP solutions lead to more innovativeproducts with fewer late changes and higher qualityFocus on the overlapping areas and provideautomatic integrations whenever possibleUse the proper level of integrationLearn more about PLM!Copyright 2015 by CIMdata, Inc.38

CIMdata’s Services.Creating, disseminating, and applying our intellectual capitalDelivering strategic advice and counsel through acomprehensive, integrated set of research, education,and consulting servicesCopyright 2015 by CIMdata, Inc.39

CIMdata’s PLM Transformation ServicesServices for Industrial Organizations—improving your PLM-related processesMonito

Jan 28, 2015 · Strategic Product Planning Project Portfolio Mgt Requirements Mgt & Sys Engin Conceptual Product Structure Mgt Multiple BOM Mgt Options, Variants & Config Mgt Specification Mgt Packaging, Artwork & Labeling Asset Mgt Maintenance Process Def & Validate Claims & MDA & Industrial Warranty Mgt Des

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