Enterprise resource planning (ERP) and product lifecycle management are complementary tools that serve particular business needs. They are not, as is sometimes believed, alternative options to each other. Indeed, ERP often relies on the information produced by a PLM system to be effective in its role. But before we get carried away, what exactly are these systems?
Both systems are a means of collecting and managing data that can then improve the way certain aspects of a business run. We’ll get into what information, specifically, each system deals in shortly, but the broad premise is the same for both—only the area of effect changes.
What is Product Lifecycle Management (PLM)?
Proper management of a product’s lifecycle enables a business to ensure not only an efficient path from conception to realization but also a dramatic cut down on problems due to things like communication errors.
A PLM system provides control at every stage of a product’s development, allowing full transparency of related data at every relevant department. An engineer involved in manufacturing will have access to the same information as a sales rep in marketing. Such consistency of data removes the leading cause of delays and errors–miscommunication. Additionally, change requests are automated and built into the system, allowing businesses to manage product development in real-time, using live, useful data to make those decisions.
What is Enterprise Resource Planning (ERP)?
Unlike lifecycle management, which deals with product data as it develops, ERPs handle a broader spectrum of information, and in fact, rely on data generated by a PLM system.
This type of system is often modular, allowing a business to use a variable set of tools depending on their involvement in the manufacturing process. For example, a company that outsources its manufacturing needs will not require as comprehensive a set of resource planning tools as one that manufactures in-house. The system allows an organization to plan with detailed, real-time information regarding their financial status, inventory, lead times, and more. These systems allow for increasingly accurate insights into a company’s financial future.
Don’t think of it as ERP vs. PLM…they work best as a team!
Resource planning relies on lifecycle management for useful data. It is important to have both systems in place to optimize your production processes properly and make accurate predictions based on the data provided. Furthermore, lifecycle management should be a priority so that it is in place before resource planning. Doing things in this order ensures that your resource planning system is working with valid data from the beginning, and will not produce skewed results or cause migration headaches when implementing the lifecycle management system.
Without a PLM in place, any ERP system can result in inadequate financial planning and mismanaged product changes. The errors that arise from this can be costly.
So why not just roll them into one?
When implemented together, and in the correct order, these systems can significantly reduce the risk of costly mistakes and inefficient spending such as fallout caused by ordering the wrong parts during the manufacturing process. Information about the manufacturing process is kept cohesive and accessible at every stage, ensuring everyone is working from the same page.
Suuchi knows the benefit of having a streamlined, fully integrated process when managing all aspects of your supply chain. So we developed our one-stop solution to ERM vs. PLM functionality with the all-in-one Suuchi GRID software.