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So what comes first, PLM or ERP?
There are different schools of thought here, just like the ever debated chicken or the egg issue. Recently I read somewhere that Engineering focused companies will benifit from adopting PLM systems first, however Manufacturing fucused companies are more likely to see quicker ROI from ERP. Anyone had good/bad experiences to share?
Replies to This Discussion
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Permalink Reply by Miki Lumnitz on -
You can have a look at my blog about PLM: http://mikiblueeyes.com
more specific to your query you can look at the following post about ERP and PLM:
http://virtualdutchman.com/2008/05/24/plm-and-erp-the-culture-change/
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Permalink Reply by Miki Lumnitz on
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You can have a look at a post I wrote in my blog about manufacturing in PLM:
http://mikiblueeyes.com/2008/06/28/manufacturing-in-plm/
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Permalink Reply by Molly on -
It's really up to the nature of the business. For design companies, surely go for PLM. For manufacturers, it has to be ERP because of the huge purchases and frequent inventory movements. There are companies who failed in the process of adopting ERP, but it's not an ERP issue. Their implementation failed. Training and adapting is difficult to start with. If employees do not follow the system, it won't function properly, therefore won't benefit the company as it could have.
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Permalink Reply by Scott E. Davis on -
I know of several startups that went the route of PLM first, ERP second. The rationale was pretty simple - since they didn't have any routine manufacturing, but were heavily involved in design work, the ERP system was far less helpful than PLM. A PLM system that tracks product cost can do half the work of ERP in that scenario. I assume the same rationale would apply to, for example, a contract design firm.
Scott
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Permalink Reply by Jos Voskuil on -
The question is obvious easier than the answer. As except from startups most companies have already an implemented business process, it is likely that already an ERP implementation has taken place as for operational and financial control ERP is a proven tool.
Implementing a new ERP system is probably also not a culture shock anymore for the organization as the process remains similar.
The major legacy from these ERP implementations is the fact that in order to manage items and Bill of Materials, the item definition has been initially defined in ERP, and that ERP systems somehow claim the ownership on items and identification.
When a PLM system is introduced the discussion in context with ERP is always about who generates the number and basic item definition. Where for everyone it is clear, new items only will be coming from PLM, some ERP departments claim they should manage this initial definition.
So in case ERP would not exist, the development/definition of a product is much easier, as the focus is on optimizing the product development environment instead of being constrained already by legacy rules coming from ERP.
Therefore starting with PLM, is the prefered way as it bring the foundation for product knowledge and development. Then ERP comes to complete the execution.
But as ERP is related to all the financial/process transactions (purchasing, resource scheduling) the need is high to implement ERP first, as handling all these transactions manual is too costly.
So it is more an egg discussion :) You need the egg for execution and next you can focus on the best chicken.
I wrote some thoughts on PLM and ERP in my blog too: www.virtualdutchman.com
Enjoy
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Permalink Reply by William Newman on -
My experience shows that neither are mutually exclusive. You need engineering systems to design products and ERP systems to source, manufacture and distribute products. The big question is whether you connect your engineering systems into ERP via PLM processes and if so what is the master? In companies that are culturally creative and design-centric (like MTO), the engineering BOM is typically the build model and the processes are best managed in the engineering design/PLM space. In companies that are culturally optimized (like repetitive, high volume manufacturers), the manufacturing BOM is typically the build model and the processes are best managed in the production/ERP space.
Regards.
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Permalink Reply by Jos Voskuil on
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William's reply triggers for me something to discuss with you all. There is a whole discussion going on, if the MBOM should be part of PLM or part of ERP. Historical indeed the MBOM was created in ERP as there was no other system to define BOMs related to sourced items.
Now I believe (as a PLM evangelist ) that MBOM and operations on the MBOM should be also managed in the PLM environment, as they are part of the product IP.
For me the high-level positioning starts with: PLM all that contributes to the product knowledge, ERP all that is related to the execution.
Curious to learn other opinions and why .....
See also in this forum: http://www.manufacturingcenter.org/profiles/blog/show?id=2123087%3A..."
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