The automotive manufacturing industry has one of the most complex supply chains in the world. It relies on several organizations and third-party companies dedicated to designing, developing, manufacturing, and selling automotive parts and cars.
With such intricate and vast operations fragmented across PLM, ERP, and other databases, even a tiny error has significant repercussions. Hence, each process must be streamlined within the automotive industry.
At To-Increase, we offer software solutions to simplify processes within the manufacturing industry, including PLM-ERP integration solutions for Dynamics 365 ERP.
In this article, we will share the current landscape of the automotive market and the top reasons for integrating your PLM and ERP systems as an automotive manufacturer.
A quick overview of the automotive manufacturing landscape today
The automotive manufacturing industry is grappling with various challenges ahead of it, such as the energy crisis, slower global demand, chip shortage, and ongoing supply chain issues.
According to a study by Global Market Insights, the major automotive manufacturers such as Ford, General Motors, and Hyundai predicted the chip constraint to reduce post the COVID-19 pandemic, but automotive chipmakers anticipate it to take a longer time.
A PwC report states that the overall automotive inventory is expected to decline, but vehicle sales will continue to rise. By 2030 Europe's vehicle inventory is expected to reduce to 200 million vehicles, a decrease of over 25% since 2017. A reduction of 22% to 212 million vehicles is predicted for the US region.
However, it is also found that automotive manufacturing companies that invest 25% of their R&D budget in software applications have rapid growth, which means the correct application can boost your growth multifold.
If you observe where the market is heading, it all leads to one central point — industry challenges are more prominent than ever, and equipping yourself with the right technology is the best way to survive and thrive in the market.
The need for a PLM system in the automotive manufacturing industry
As you move toward developing the next generation of autonomous, electric, and connected vehicles, you face new design challenges. With the evolving market, a product lifecycle management (PLM) system can speed up the product design process from conception through production.
It offers one database to conceptualize, innovate, design, and engineer the unique parts different automotive companies require.
The need for ERP in the automotive manufacturing industry
The vast size of the automotive industry makes it challenging to maintain day-to-day records. Quality control, inventory management, supply chain disruptions, and financial management are just a few issues that every automotive company without a mature enterprise resource management (ERP) system face.
An ERP allows automotive manufacturers to consolidate their communication and data into a single source of truth and manage different logistical, administrative, financial, and operational processes in one place.
Why do automotive manufacturing companies need PLM-ERP integration?
Reason 1: Enhance visibility and control
PLM-ERP integration provides a holistic view of the product lifecycle, from design to production and aftermarket services. It improves visibility into project milestones, manufacturing processes, cost control, quality management, and inventory levels.
Increased visibility enables better tracking, planning, and decision-making, improving control over operations and optimizing resource utilization.
Reason 2: Improve supply chain management
Integrating your PLM and ERP systems means avoiding automotive supply chain disruptions as it synchronizes data between the two systems. Information such as component specifications, suppliers, vendors, and inventory levels are updated in the PLM and ERP.
This sync enables accurate demand forecasting, optimized procurement, reduced lead times, and efficient inventory management.
Reason 3: Data integrity and accuracy
The quality, integrity, and accuracy of the massive data in your automotive company's PLM and ERP systems are ensured as the integration validates and checks data before posting information. This eliminates the need for manual data entry and reduces the risk of errors.
With connected systems, all your stakeholders will have access to the latest and updated information, reducing the likelihood of production issues.
Reason 4: Automate transfer of Bill of Materials (BOM)
The BOM is a critical document in the automotive manufacturing industry as it lists all the components and materials required to manufacture a product. When your engineers develop systems and sub-systems independently, a lack of PLM integration with ERP can lead to costly late-stage problems.
Using PLM-ERP integration, you can automate the movement of your BOMs from PLM to ERP and manage your product’s evolution in all its variants and configurations.
Reason 5: Break down data silos
Product and process knowledge could be spread across multiple systems and databases for many automotive companies. A PLM-ERP integration can connect your various databases, making accessing, using, and sharing information easier.
The integration breaks down data silos by enabling real-time, seamless transfer of information between PLM and ERP systems, eliminating duplicate data entry, and improving data consistency.
Reason 6: Save costs and increase efficiency
If you compare the cost of integrating PLM and ERP versus the costs of repeated effort and manual processes with disconnected systems, you will quickly realize the potential of cutting down costs with the integration.
The ROI of the PLM-ERP integration is high as it organizes communication, data sharing, and all engineering and production-related operations. It removes discrepancies between your PLM and ERP, improves customer satisfaction, helps identify areas for optimization and waste reduction, and frees up time for employees to focus on value-added activities.
Reason 7: Regulatory compliance and traceability
As an automotive manufacturer, you must comply with numerous regulations and standards related to safety, emissions, quality, and traceability. Whether you manufacture electrical or brake parts, engine parts, or other automotive components, you must align and design every element to meet regulatory compliance.
PLM-ERP integration helps ensure compliance by providing end-to-end, traceable product information throughout its lifecycle. You can manage information on how the products are shipped and distributed. Additionally, you can maintain accurate product data and documentation related to the automotive manufacturing process.
Reason 8: Manage engineering changes
Changing even a single part within the automotive manufacturing process affects dozens of other aspects, the assembly process, and the vehicle's overall function. A minor malfunction can trigger a chain reaction of failures.
PLM integration with ERP helps change management within automotive engineering by ensuring any change is carefully planned, documented, and implemented with the least disruption. You can send out engineering change requests (ECR), identify quality issues in the initial stages, and avoid vehicles being recalled.
Want to integrate your PLM and ERP systems to simplify automotive manufacturing?
As a manufacturer in the automotive industry, you will gain multiple benefits with a PLM-ERP integration solution.
Some of the next steps you can take are:
1. Connect with different teams within your automotive company to discuss the idea of PLM integration with ERP.
2. Identify the factors to look for in the PLM-ERP integration solution.
3. Analyze your PLM and ERP systems and look for ISVs that support integrations with your systems.
4. Evaluate your shortlisted options against your requirements criteria.
How can we help you with PLM-ERP integration?
If you want an intuitive, preconfigured PLM-ERP integration solution, you could explore our solutions available for Dynamics 365 Finance and Supply Chain Management and Dynamics 365 Business Central.
Our offerings include out-of-the-box PLM-ERP integrations for Siemens Teamcenter and PTC Windchill. And for any other PLM, PDM, or CAD system, you can adopt our configurable PLM integration framework.
To know more about our PLM integration solution for Dynamics 365, check out the solution factsheet below, which shares information on the following:
- What the integration solution can do for your business
- Benefits of PLM-ERP integration
- Features of a standard integration solution