Through integration with ERP, PLM systems gain access to critical data about production costs, suppliers, historical customer information and shipping delays, all of which can be leveraged in existing product designs and incorporated into future product development projects.
Many companies start off by envisioning comprehensive ERP-PLM integration, in which all known information about a product is loaded into the ERP database where various areas in the cycle, from engineering to marketing to supply chain, can access it, according to Bill Swanton, a vice president at AMR Research in charge of helping Fortune 1000 companies increase the value they receive from their ERP investments. However, most companies end up taking a narrower integration approach, in which limited amounts of data are handed off at certain points in the lifecycle.
For example, at the engineering release point, material and product information moves from PLM to the ERP system, so that parts can be ordered in a timely fashion via the supply chain management (SCM) system.
Conversely, the latest parts costing information gets transferred from ERP to PLM, so that product engineers can make informed decisions when determining whether to incorporate the same or newer parts in future products.
ERP platforms can also enable PLM to share information with other applications. Integrating PLM with SCM, for example, enables companies to better manage parts costs by leveraging volume pricing across different product groups.
Creating an overall PLM strategy that automates cross-functional information flow holds the promise of greater responsiveness and fewer errors, but "it's an expensive project that's difficult to get right, and everybody has to sign up," said Swanton.
According to Swanton, one of the most difficult tasks is to motivate employees in engineering or production to focus on cross-functional performance instead of concentrating solely on their own areas.
About the author: Elisabeth Horwitt is a freelance journalist who has covered business IT trends, issues and technologies for over twenty-five years. She is based in Waban, MA.