PLM & ERP: Brewing the Right Formula

These days, there is an incredible amount of ongoing debate over PLM and ERP: white papers, blog articles, discussions in social media. In difficult economic times everyone tries to improve their processes and outdo their competitors. And both PLM and ERP play a key part in bringing you success.

I recently attended a workshop organized by a French association called PLM Lab. The group is focused on Product Lifecycle Management, and aims to clarify concepts and terms used in the field of PLM and build a knowledge corpus to support successful deployment of PLM solutions. The association is mainly driven by key players in the industry who meet twice a year to discuss PLM standards, configuration, change management, and other such issues.

This year, the workshop was focused on PLM and ERP and how to coordinate the eBOM and mBOM. I followed a very interesting presentation from Jean-Jacques Urban-Galindo, who has been in the automotive industry for many years. Among his many credentials he worked for PSA Peugeot Citroën as the INGENUM program director.

The first thing I discovered during this workshop: PLM and ERP are not new. To prove it, Urban-Galindo projected slides from major automotive companies dating back to the early Sixties. Turns out even back then we were asking: PLM or ERP, or both?

PLM is a tool which helps the engineer imagine and develop a new product. It is focused on the eBOM (Engineering Bill of Materials), which reflects the way a product is functionally designed. For any given product version the eBOM is unique.

On the other end, the mBOM (Manufacturing Bill of Materials) reflects the way a product is manufactured – and, as Urban-Galindo pointed out, “not all production sites are the same, or have the same suppliers or subcontractors.”

In the end, each product must correspond to the eBOM, but it is the mBOM which dictates the final outcome. Even if the mBOM is derived from the eBOM in PLM, it is essentially something different.

So then, PLM and ERP have differing roles in product development, but they are both essential. When used in conjunction with one another they can be complementary, helping to support innovation.

By incorporating both technologies, and using each appropriately, companies can realize the maximum possible value from their product development and manufacturing processes, and find balance within the chaos of today’s product design challenges.

To learn more about PLM & ERP, you can read the free e-book: “PLM & ERP: achieving balance in product development” or the full white paper: “Understanding PLM & ERP Value.”

Photo Credit: Potions by Clay Shonkwiler, Flickr (CC BY 2.0)

This entry was posted in Best Practices, Product Lifecycle Management and tagged , . Bookmark the permalink.

2 thoughts on “PLM & ERP: Brewing the Right Formula”

  1. URBAN-GALINDO says:

    The key point to coordinate the 2 main processes Product/Process definition and Material flow Management is to understand that they have to share the M BOM.
    The first process is for me the PLM area, the second one the ERP.

    In ERP software’s the M BOM takes a central position for scheduling, procurement, cost calculation and industrial performance analysis. It is the responsibility of Manufacturing Engineering teams to define the information describing al the steps needed to obtain final products from raw materials.

    So even if the M-BOM is derived from the E-BOM, it is different and needs to be built with a specific tool dedicated to Manufacturing Engineering, like Digital factories software’s, able to manage the information’s needed later in the ERP.

  2. Marie Lichtle says:

    Thank you for clarifying this Jean-Jacques!

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