To put Dick Bourke into quick perspective, it’s worth knowing that he authored one of the first books ever on automating bills of materials. For the past 40 years, Dick has operated his own consulting business and today is a regular contributor to Engineering.com. Moreover, I am privileged to count him as a personal friend.
As someone who clearly understands ERP and PLM solutions, I want to get your perspective on the two solutions and their role in manufacturing today.
If we look at ERP and PLM, we can see some parallels in their development and maturity. Before ERP there was MRP, or material requirements planning, which was strictly the core modules necessary to plan material requirements, quantities, inventories and due dates. Properly structured bill of materials for manufacturing planning purposes or what’s now called the M-Bomb were critical along with inventory accuracy. Then, as a broader set of applications began to emerge, the name ERP or enterprise resource planning took hold. This now includes CRM, financials, HR, and many other applications meant to run the business.
Now let me jump to PLM. PLM has its roots somewhere back in the mid 90’s I believe. It was an answer to the limitations of file-based system. What initially showed up was referred to as PDM, or product data management solutions. PDM is a file-base-system with the ability to assign property attributes, states and support limited workflow. I think of it as basically “check-in and check-out” with access controls.
Making manual state changes on parts and/or their drawings, using spreadsheets to manage configurations and email to support workflows, quickly highlighted the need for something more secure and sophisticated. PDM essentially became the equivalent of MRP.
So let me pause on that for a second Dick. The way you described that, is to say ERP today is very much about executing on the manufacturing activities and PLM takes on more of the “process” oriented activities.
Okay, so we want to define ERP a little bit better … like the differences?
No, I think we are okay. What I think I hear you saying is that ERP is transactional in nature … bills, inventory, scheduling, etc. I’ve heard others use the term “execution system”. PLM on the other hand, really is about treating the processes, the workflow, from potentially the sales quote all the way thru the shipment of parts or products to the customer. So expand a bit more about this difference in what ERP does verses what PLM does.
It’s not a case of one or the other when it comes to product management and corporate systems strategy. I remember back when there was some thought on, why can’t ERP be used in engineering? I felt this was a rather poor perception of how an engineering environment functions from a manufacturing environment. And I think that is a key point. You need a different set of processes for the pre-release of parts then you need for ERP. ERP will tend to be more structured, where as in an engineering environment, you are talking about work flows that may be unique from project to project or the severity of the engineering change or something of that sort.
They are distinctly different. It’s not a case of “oh, we can apply ERP to engineering.” And I recall that actually was what one ERP consultant proposed! So I think what the moral of the story is, we have to respect the environment difference and apply the techniques accordingly. The commonality of the two has been and will be the bill of materials. And it’s getting a lot of attention right now.
That is well said. I like that. I like the perspective that it’s not one or the other. I like the perspective, that the bill of materials is the glue that ties it together. And one platform focuses on building that and the other platform focuses on executing that. Is that fair?
I would lighten up on the “executing” part because ERP starts with a lot of planning. But, otherwise, I think that’s a fair characterization.
Editor’s note: numerous comments were excluded for brevity.