PLM and ERP are complementary software that works together to ensure the success of a product. Product Lifecycle Management (PLM) comes first by managing the product development and its processes. Enterprise Resource Planning (ERP) manages the supply chain including the inventory, pricing, and payments. These are used sequentially to provide the most up to date product data at any time.
However, if one does not take a step back in order to see the bigger picture the two solutions may look the same and end up confusing instead of beneficial.
The subject is therefore important and we will try to reposition the key points of these two tools.
What is an ERP?
Let’s start with Enterprise Resource Planning (ERP). Intended for industries, ERP enables them to automate their manufacturing and supply chain processes of assets. The first objective remains a classic one: more productivity and efficiency means a reduction of delays which means more efficiency, less cost, more production, and so on…
What is a PLM?
PLM, or Product Lifecycle Management, is designed for manufacturers in the broadest sense -manufacturing, complex systems, construction, agri-food, etc., and aims to optimize the management of products throughout their life cycle, from creation to the end of life. It launches the business, research, design, industrialization, operation, and dismantling of the product
PLM and ERP: the two together
Metaphorically, they are just like the human body. Which has over 600 muscles and 200 bones. The muscular and skeletal system are both equally complex just like ERP and PLM and necessary together in order to accomplish the tasks at hand efficiently.
They share material information, plans for the future of the product, regulation information as well as product performance information, in order to be complementary tools.
But, what are the differences of PLM and ERP
The difference between the two tools is detected within the managed data. In other words, even if ERPs add functions similar to those of the PLM, the central information managed is not the same:
- ERP focuses on physical assets and material flows such as production scheduling, inventory management, and shipping logistics.
- PLM focuses on the composition and interdependence between the different components of the products and the management of the “product environment” such as traceability, innovation, and management.
The functional perimeters and their strengths depend directly on the data they manage.
The best way to remember them: PLM = design and ERP = production
By centralizing technical information in a common repository and synthesizing key data, PLM enables users to better understand information globally and thus foster innovation and collaboration between all stakeholders, both internally and externally. However, PLM does not have the objective of managing flows of articles and notions of stocks and logistics.
In addition to the benefits PLM provides inherently, PLM also reinforces the advantages of ERP by allowing a unified management of all technical data. ERP, therefore, relies on the knowledge of the product and its environment provided by the PLM to optimize the flow management for manufacturing and logistics and to have reference product data.
ERP without PLM struggles to organize product record and may mismanage product changes as well as be inaccurate with financial planning. PLM is the starting tool that ERP must follow. That is why is an ERP tool is not integrated with a PLM solution it will not function as it should due to missing information.
PLM and ERP: two complementarity software
There is no choosing between ERP and PLM, both are necessary, the choice will, in fact, deal with how to integrate the two applications. The two tools relate to the products and are necessary in order to provide a “single version of the truth of the product” to limit the errors of re-entry, and to follow-up versions of documents and products evolving in parallel.
This is why Lascom has developed partnerships with ERP vendors and provided standard connectors to facilitate integration between the two tools. With this integration, businesses are more agile and more reactive in all its activities (deliveries, quality, cost, traceability, innovation …).
And in the end, it fits the need to break down information within the company and facilitate sharing and collaboration!