CAD-centric PLM, ERP-centric PLM, and Organic PLM: What's Right for You? - Part 1

In this day and age of globalization, ever-shorter new product introduction (NPI) cycles and overall product lifecycles, partner collaboration, and whatnot, product lifecycle management (PLM) software solutions have lately increased their strategic significance to enterprises. In his recent Forbes blog post contribution, PTC’s CEO Jim Heppelmann touts PLM as a new path to shareholder value. He argues that the PLM repository of data should be an enterprise system of record rather than mundane transactional enterprise resource planning (ERP) data.

With Apple recently leapfrogging its once seemingly untouchable competitors via innovation and delivery of cherished products as well as with the rebirth of General Motors (GM), Chrysler, and Ford via innovation and a departure from their former gas guzzlers with numerous quality issues, it is difficult to debate the importance of product development and its enabling technologies. But not all PLM solutions are created equal, especially given their different origins.

The first and possibly the most prominent PLM group are the so-called “Big Three PLM” solutions that come from stalwart computer-aided design (CAD)/computer-aided manufacturing (CAM) providers: Siemens PLM Software, Dassault Systemes, and PTC. From their expertise in the CAD and computer-aided engineering (CAE)-related product data management (PDM) realm, these vendors have expanded into the collaborative PLM realm by acquiring one or more PLM solutions and are currently selling them under the Teamcenter, ENOVIA, and Windchill PLM brands, respectively. Autodesk and Gerber Technologies would be additional prominent CAD providers that have recently joined the PLM fray.

The Pros of CAD-based PLM Solutions

Indisputably, CAD-based PLM vendors have thorough knowledge of product design and product development processes. This is especially true with regards to inter-disciplinary system engineering (i.e., managing mechanical, electronic, and software components and requirements). Engineering departments and/or manufacturing operations typically drive the evaluation and selection of the CAD-based PLM solution when these vendors win over other PLM alternatives.

Until recently, these PLM solutions were software toolsets rather than packages and these vendors provided the most extensive customization tools. This is a dated strategy in this age of do-it-yourself (DIT) consumerized IT and so-called “business IT,” but it still has  influence since many large discrete manufacturing companies have large PLM IT staffs and therefore heavy customization needs.

Another advantage of these PLM solutions is their stronger standard CAD system integration capabilities. This is especially true when the PLM and CAD product pairs come from the same house, i.e., Teamcenter and NX by Siemens, ENOVIA and CATIA by Dassault Systemes, and Windchill and Creo Parametric (formerly Pro/Engineer) by PTC. In addition, due to their back-office systems agnosticism, these solutions seem to do well in environments with multiple ERP systems and/or multiple customized instances of ERP systems (even if they come from the same vendor and brand).

Moreover, given Siemens’ automation origins and slew of related plant-level software acquisitions over the years as well as Dassault Systemes’ more recent acquisitions in the manufacturing execution system (MES) arena, even more emerging advantages bode well for these PLM providers.  Standard integration between these vendors’ PLM, CAD, CAM, and MES solutions improves their capability to provide digital factory simulation and validation in the virtual world before the need to invest in costly physical assets (machines centers, robots, etc.).

The Cons of CAD-based PLM Solutions

On the downside, these engineering-heavy vendors lack the experience and capabilities in transactional processes within an enterprise and outside the enterprise’s four walls. Given that their ERP and supply chain management (SCM) process integration and savvy are also basic, these providers cannot really say: "Yes, we can meet all (or even most of) of your enterprise software needs."

These solutions come with higher cost and time to implement or upgrade, especially in those enterprises with multi-CAD and -CAE solutions in place (a matter of course in large global corporations). Moreover, as said earlier, these PLM solutions are not really configurable applications and possess rather elaborate data structures, often referred to as “vaults.” Over time, this custom-made deployment issue will diminish, but not for some time to come. Finally, the aforementioned extensive customization tools come with the curse of high customization costs and future upgrade cost and time ramifications.

The Pros of ERP-based PLM Solutions

Eager to extend collaborative PLM functions (both inter- and intra-enterprise) is the second PLM group of Big Three ERP vendors: SAP, Oracle, and Infor. While SAP has developed its discrete and process manufacturing PLM capabilities in-house, Oracle and Infor have made a number of PLM acquisitions. NGC Software would be an ERP and PLM combination in the fashion/apparel industry.

Needles to say, these large ERP vendors have a raft of capabilities pre-packaged into their PLM offering, e.g., product-related analytics, regulatory compliance, sustainability requirements, quality management, sourcing and supplier relationship management (SRM), product portfolio management (PPM), etc. While being shallow in product design and engineering per se, they know a lot more about the entire business acumen (beyond the design bureaus) than the aforementioned engineering-heavy PLM providers.

Experience has taught us that companies choosing SAP, Infor, or Oracle for PLM consider manufacturing or supply chain resource planning to be much more important to their businesses than product development. CIOs and/or IT managers typically drive the evaluation and selection of the PLM solution when ERP vendors win over  alternatives. Bidirectional ERP and application level integrations as well as the possibly minimized number of required IT application and infrastructure components are the apparent reasons cited by CIOs. In the case of SAP and Oracle, the standard integration to their MES capabilities (which have lately become more than basic in some industries) is another attractive point.

The Visual Enterprise Strategy

TEC’s mid 2011 article entitled “Has SAP Become a PLM Factor to be Reckoned With?” analyzed the current state of affairs of the SAP PLM 7.x suite. Soon after, SAP acquired Right Hemisphere for its 3D visualization capabilities and as the linchpin of SAP’s “Visual Enterprise” strategy to put the product development (engineering), manufacturing, sales & marketing, and aftermarket service departments on the same page. For its part, through the acquisition of former Agile Software (which had previously acquired Cimmetry Software), Oracle also owns the popular AutoVue visualization software, which is often used by many other CAD and PLM providers.

SAP and Oracle want to create a center of product information with business data consistency, combined visual and business data analysis, and fully enabled mobile devices to deliver information. In this context, visualization enables communication, data analysis facilitates better decision making, and mobility enables flexibility. The strategy of these ERP vendors’ is to enable better and faster decision making by combining 3D visual information with relevant data from their vast ERP suites.

The approach is all about optimizing processes and compressing time to decision. In other words, ERP vendors aim to improve productivity and process efficiency by providing visual navigation and query of product information and graphical animation of procedures. The idea is to reduce information and process complexity, increase comprehension, enable a faster learning curve, and ensure accurate quality operations execution with reduced ambiguity.

SAP and Oracle are not the only game in town here, as Siemens will soon release its Active Workspace offering, which will be the entry point of its “High Definition PLM (HD-PLM)” approach. Along similar lines, Dassault Systemes has the 3D Live offering within ENOVIA, and one can put these products/concepts in the same group: 3D Live, HD-PLM, and SAP Visual Enterprise. Basically, they all provide combinations of enterprise data and content from different applications such as PLM, CAD, ERP, SCM, enterprise asset management (EAM), etc.

PTC and Infor are working on this concept as well. PTC Windchill can plug into multiple enterprise applications to find and look at information with its Windchill Web Parts for SharePoint module. In the case of Infor, within the Infor10 platform strategy the vendor is doing this in a few ways.

First, through Infor Workspace, it is leveraging portal capabilities to get to the right application that a user may need from a single home page. Other examples are via the Lifecycle Analyzer, ION Vault, and ION Pulse capabilities within the Infor10 framework. Look for more information on Infor’s PLM offering in a separate article.

Part 2 of this series will analyze the typical shortcomings of ERP-based PLM systems and whether there is a generally more viable solution. Oleg Shilovistky’s Beyond PLM blog post sheds more light on the characteristics of ERP and PLM systems.

In the meantime, your views, comments, opinions, etc. about the PLM, CAD, and ERP software are welcome as usual. We would also be interested in your experiences with these software categories if you are an existing user and with your current (possibly ineffective) product development practices. What PLM solution have you selected and why?
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