The Key Differences between PLM and ERP in meeting corporate objectives
There is a historical tension between a corporations need to innovate and its need to produce. Fostering innovation is not possible within the rigor of production demands and successful production practices are not possible within the highly flexible framework of good innovation. This tension has been studied and analyzed over the years. The conclusions of the studies are that the most highly successful companies in the areas of both innovation and production, are the companies that embrace both sides of the coin - fostering a culture of innovation while observing the required rigor within the production framework.
When this is understood it becomes more clear why PLM and ERP system MUST support different corporate needs:
It is these very differences that show it is a myth to believe that the systems designed to manage your physical inventory with rigor and structure, could be manipulated to become the flexible systems needed to foster innovation. The PLM vendors don’t even pretend to do the business of ERP systems - why is it that ERP systems believe they know how innovation in design should be managed?
Copyright 2007, LR Hirr
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Comment by Dick Bourke — June 30, 2007 @ 10:48 am
A couple of thoughts for you – maybe even a bit of devil’s advocate.
I’ll start with the last sentence. Does that sentence reflect a bit of paranoia in the PLM vendor community? I don’t see evidence that ERP systems currently project that posture. Admittedly, at one time, such was the case. In the ERP community there was a certain amount of “center of the universe” thinking. A few misguided souls even suggested the planning technique of the earlier versions of ERP (MRP II and MRP) could be used to schedule engineering. It was some of this thinking that was probably one of the causes of some of the conflict between PLM and ERP system aficionados, resulting in various lists of the differences between the two systems. Fortunately, the growth of first PDM systems, then PLM systems has shed new light on the proper role of each.
The list identifying the differences between Development and Manufacturing appears to have assumed PLM and only ERP systems. In many cases, ERP are not the only Manufacturing systems in operation, thus the list is a bit misleading. Add in, for example, Lean Manufacturing to the list and we see that a number of factors are not different: Culture needs to be flexible, not structured; Assets controlled is more than inventory; and Role of Time should be “constant reduction” not stability is sought. Part of the perspective aspect is that in many everyday conversations “ERP” is considered more than the classic definition of ERP, but might also include Lean Manufacturing, both process improvements without software tools to facilitate and the use of software tools. Knowledge systems people recognize the synergy of integrating ERP with Lean Manufacturing techniques and software.
So, yes, we need to sharpen our understanding of differences to do a better job of integrating all systems. However, let’s approach this subject from a different direction – that of team building. In that spirit, the approach should be to stress commonalities, not differences that could be the source of conflict. At a higher level, therefore, think of how every system can contribute to company meeting company objectives.
A good example is “Time to Market along with “Time to Volume,” and Time to Profit.” How can a justification for PLM to achieve these objectives be stated without recognizing the contributions of ERP, Lean Manufacturing and Supply Chain Management. It may be tough to identify the contribution of each in a Return on Investment, but we have to try. In a recent case in a configurable products company, the identified benefits of new configurator software also depended on achieving some related benefits of PLM as well as rethinking the use of the CAD software.
In this respect, software vendor claims benefits may disguise the true nature of the sources. Just yesterday, I saw a PR notice from a CAD vendor that claimed the use of its CAD software resulted in outstanding reductions of “time to order delivery.” Hmmmm. In fact, another software tool was identified, though its contribution was not.
On a related note, I am getting tired of the overused word “easy” in the vendor PR claims. These systems may be “easy” to use once up and successfully implemented, but getting up may not be easy. Again, a case of creating false expectations that may come back to haunt system buyers and implementers.
Comment by Dick Bourke — August 5, 2007 @ 11:29 am
[...] will end this section with a quote from another post by Laila Hirr, The Key Differences between PLM and ERP in meeting corporate objectives: “…it is a myth to believe that the systems designed to manage your physical inventory [...]
Pingback by Manufacturing in PLM « Miki Lumnitz’s Weblog — June 28, 2008 @ 1:32 am
have allok at a post I have wrote in my blog, Manufacturing in PLM:
http://mikiblueeyes.com/2008/06/28/manufacturing-in-plm/
Comment by Miki Lumnitz — June 28, 2008 @ 1:47 am