Posted on 9 Jun 2010 by The Manufacturer

Confused about the value proposition of PLM technology in relation to ERP? You’re not the only one. Jane Gray tracks debate at PTCs World Event on the changing relationship between the two technologies.

The has been discussion for years about the relative importance and potential of PLM in relation to its lager software cousin ERP. The latter, an established IT cornerstone for manufacturing companies – essential for efficiency in logistics and operations across company functions has often dominated organisational spending priorities – dismissing PLM as a nice to have enhancement to CAD capability rather than as a critical data management system in its own right. Now however, it looks as if this is being thrown into question.

From the moment I arrived at the Orlando venue for PTC s annual user conference the issue of ERP v PLM was a hot topic of conversation with a growing consciousness that PLM is no longer being implemented as a satellite ERP capability. The definition between the two systems now is one of function rather than superiority.

While ERP is designed to create end to end vision in logistics and operations throughout an organisational ecosystem PLM now performs the same function for the product development process. It is a system which charts design strategy, supporting decisions on make to order or stock approaches, which suppliers to design with, about whether your bill of materials supports the intent of you procurement department and their sourcing strategy, about where components or products will be manufactured and how to develop manufacturing capability in key areas to reflect these decisions. In addition PLM goes further to coordinate product support strategies and design service initiatives concurrently with product development so that broader cost and compliance challenges are taken into account before the book is closed on the physical design and engineering of the product.

Looking at this array of functions and benefits to be derived from PLM (which really only scrape the surface of the offering available) in is clear that we are talking about a highly complex, modular system designed to aid manufacturers in an increasingly complex world. PLM had defied the expectations of a decade past that it would simply become another ERP module and blossomed into something far more strategically important. Jim Heppelmann, CEO elect at PTC stated that “ERP vendors back in the nineties started to come up with their own PLM offerings. SAP launched a PLM – or PDM as they called it – strategy back in 1996. That was fourteen years ago – they are less competitive in the PLM market today than they were then and that is because the definitions and expectations around PLM have move so quickly that the SAPs and the Oracles haven’t been to keep up.” This said Heppelmann admitted that “What people really need is a tight connection between these two worlds. We are starting to see deployments of similar magnitude in PLM as have been known in ERP. CIOs are saying that they have two main information systems – a product development system that holds all the strategy of business and products and then an operation and execution system called ERP that will execute that whole stategy.”

For some the very diversity and complexity of new PLM is extremely daunting and I spoke to PTC users of CAD and CoCreate who bluntly said that “Windchill (PTCs PLM platform) looks like a pain in the ass. It’s so huge you could never hope to implement it properly or make sense of the connections going on. It’s just too hard to use.” Others however disagree. A truly impressive presentation from Peter Burrows, CIO emeritus at Adidas Group showed how a methodical, lean approach to PLM implementation could enhance and enable the product design, manufacture and support process in a highly complex and demanding environment. Indeed the sportswear group feel so strongly that the PLM system architecture supports clarity and agility in data management and decision making that they requested PTC develop a new master data management system (MDM) using the Windchill platform to replace their incumbent SAP technology. PTC now owns the rights to this new breed of product but has not decided yet what its larger market implication may be.

What cannot be doubted is that the PLM market is currently more dynamic than it has ever been before – taking on the mantle of excitement and possibility for manufacturers that the first generations of parametric design did in the nineties. Challenges around usability and interoperability still hamper the realisation of this potential however and for users there is an ongoing need to define the boundaries and applications of this growing IT solution.

Now back in the UK I am heading for MACH 2010 to meet with UK based PLM users and resellers. How is UK industry fairing in comparison to its American peers in understanding, implementing and advancing the capability of PLM technology.