11 April 2019

Pitfalls of Not Integrating Product Life-cycle Management with ERP

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5 Possible Pitfalls of Not Integrating Product Life-cycle Management (PLM) with ERP System.

As many of you may be aware, Product Lifecycle Management or PLM as it is commonly referred to, is the process by which you manage the complete lifecycle of a product. It encompasses all the stages from the concept or inception stage to design, engineering and manufacturing, and the service and disposal of manufactured goods. Using PLM in the right way can help integrate processes, and business systems to form the product backbone of any company that uses ERP and PLM. Take for example an industrial equipment manufacturing company.

From the above definition you can surmise that integration of PLM systems with ERP platforms is of key importance. In case the engineering domain and the operational systems are not connected properly, then there could be a disconnect as some of the lifecycle stages are performed in PLM and some in ERP.

To help you further understand, here are some possible stages in the product lifecycle and where they are usually carried out:

  • Inception, engineering, and design typically performed by the engineering teams
  • Manufacture, service, and disposal— are transactional processes performed by the operations teams in ERP

So, PLM systems are in place to manage PLM processes and these systems are often connected to CAD systems that feed the PLM systems such as PTC Windchill, Siemens Teamcenter, Vault, Solidworks, etc. To close the loop, these PLM systems should also be integrated to ERP systems like Dynamics 365 for Finance and Operations.

Given below are the probable outcomes of not having a PLM integration in place and the resulting pitfalls that you can avoid:

  • Time consuming and labor-intensive:  Without an automated integration it becomes very laborious to ensure that the technical and operational worlds are connected. In many manufacturing businesses, several teams work in tandem with each other to speed up product improvement and innovation. However, this can result in confusion about the ownership of an aspect and thereby affect the quality of the final product. For instance, the engineering department could be the owner of the product specifications based on which the procurement department would purchase components, and the quality department has the final sign-off on the quality aspects and so on. PLM integration can help map ownership and ensure that processes are streamlined and not labour-intensive.

  • Wrong product manufacture: Without proper integration between the operational and technical aspects of manufacturing in place, there are chances that some of the details are lost resulting in the wrong product version being manufactured. This could lead to rework and longer lead times, which can translate to poor bottom-lines, loss of your position in the market, loss of reputation with customers, and a general lack of direction to the overall business.

  • Incomplete inventory or wrong components: The basis of any product plan is to properly decide on the quantity, quality, and specifications of the parts. Without this, the production would either be of poor quality, incomplete or even delayed. The integration of PLM ensures that the BOM is complete, up-to-date, the materials requirement planning (MRP) is carried out properly, and that you can permeate the information to procurement, accounts, and other related departments.

  • Unclear procurement specifications: In the lifecycle of products, especially in industrial equipment manufacturing, there are many changes and iterations due to both internal (operations department) and external factors. These iterations must be part of PLM and need to be integrated, or else it could result in unclear or incomplete specifications at the manufacturing or assembly stage. The two-way connection between PLM and ERP ensures that ECRs (engineering change requests) triggered by operations lead to ECO’s (Engineering Change Orders) that result in new product versions.

  • Potential liability claims: While this may be a difficult point to connect with PLM integration, picture this scenario: A product has been produced with incomplete specifications due to PLM not being integrated. The chances are that the product may be rejected outright by the customer even at the prototype stage itself. Alternatively, the product performance may not be at par, and this could result in recalls and replacements or even result in liability claims.

We are sure that you agree that PLM integration can mitigate these concerns with a solid integration resulting in complete alignment of the product information between the engineering world and the ERP. Please read our tip-sheet '5 ways to improve collaboration between production and engineering', and know how it is essential to have good collaboration between production and engineering, and how software solutions can help you achieve it.

Want to discuss PLM and ERP integration with our expert? Click here to schedule an appointment! Eager to learn more? Visit our page.


PLM and ERP Integration: Critical for Overall Success Forward

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Peter van Leeuwen,
Peter van Leeuwen,
Manufacturing Industry Specialist

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