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As PLM gains ground, PLM-ERP integration moves to forefront

More companies are using product lifecycle management (PLM) for better visibility around product data and processes, but experts say PLM-ERP integration is key for leveraging PLM.

As product lifecycle management (PLM) gains traction beyond the engineering and product development groups to become...

a staple of the enterprise, companies are now focused on integrating the platform with other core business systems, including enterprise resource planning (ERP) and manufacturing execution systems (MES).

PLM-ERP integration and integration of PLM with other core business systems is crucial if manufacturers really want to capitalize on the benefits of leveraging a PLM strategy to boost efficiencies and foster innovation, experts say. While PLM was conceived as a way to establish visibility around product data and processes throughout all stages of the lifecycle, much of the information required to do so resides in systems outside of the traditional product development and engineering domain. Yet rather than deliver simple hand-off of product data or bill of materials (BOM) information between core systems, this level of data integration must take into account cross-functional business process and workflows in order to address the product lifecycle in its entirety.

"You have to think about integration as closing the loop across the entire lifecycle," explained Mike Burkett, vice president of PLM research for AMR Research Inc. in Boston. "The importance of integration as you're developing a product means visibility into the ERP system for information around costs, information around suppliers, historical customer information or information about field failures. You want this information to be fed to product development so it can be leveraged into existing designs as well as to improve future products."

Discover more about Product Lifecycle Management software

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It's still fairly early in the PLM-ERP integration game, and there's a lot more work to be done to address some key challenges. For one thing, there's the issue of master data management (MDM) and data governance. Since product-related data resides in a multitude of systems, there are questions about where it should reside -- within the PLM repository or within other systems, with architecture in place to make it readily available to other applications. There is also the thorny issue of data conversion.

"A lot of the data about existing products is 20 years old and stored in old mainframes," Burkett said. "It needs to be cleansed before being brought into a PLM system, and defining more information about attributes will take time."

Despite the obstacles, progress is being made. Traditional engineering-oriented PLM systems providers such as PTC and Siemens PLM Software, for example, have been offering packaged, base integrations to leading ERP platforms for some time, along with working with larger customers to create more sophisticated, custom integrations that address some of these business process and workflow challenges. For their part, ERP providers such as SAP AG and Oracle Corp. tout their high-level business process integration capabilities as an advantage of their PLM offerings.

For example, SAP has built SAP PLM on its NetWeaver service-oriented architecture (SOA), and the application is embedded into the SAP Business Suite. That level of integration means BOM structures created with SAP PLM share the same core objects as the rest of the SAP suite, enabling immediate synchronization as changes are made, according to Hans Thalbauer, SAP's vice president of PLM solution management.

"If you look at the reality of integration, most companies are still doing engineering and manufacturing work as separate organizations, and the integration of processes is not widely established," Thalbauer said. "The new thing here is process orientation from beginning to end."

Having its ERP and PLM systems share a common set of data and processes was a key requirement for Hammerhead Systems, Inc., a Mountain View, Calif.-based telecommunications manufacturer. The company opted for Arena PLM from Arena Software Solutions because of the cost efficiencies and scalability associated with its hosted delivery model, but it then brought in Expandable ERP because the two companies had already built an adapter delivering business process integration between the two platforms.

Prior to the PLM-ERP integration, Hammerhead used spreadsheets to pass product information back and forth between the product development and manufacturing organizations. It was a time-consuming process fraught with errors, according to Russ Woodmansee, Hammerhead's vice president of operations and quality assurance.

"We used to spend days and days hand-inputting information and administering it, and we didn't know if it got [in the system] accurately," Woodmansee said. "Today, it's almost in real time, and we can leap quickly. Once a change is approved, manufacturing has the toolsets in place so they can start execution planning."

Beth Stackpole is a freelance writer.

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