CAD-centric PLM, ERP-centric PLM, and Organic PLM: What's Right for You? - Part 3

Part 1 of this blog series started with the assertion that product lifecycle management (PLM) solutions are becoming increasingly important to enterprises in a strategic sense. However, not all PLM products are created equal, especially in light of their different origins.

I then explored the advantages and weaknesses of the first group of PLM solutions: those coming from stalwart computer-aided design (CAD)/computer-aided manufacturing (CAM) providers: Siemens PLM Software, Dassault Systemes, and PTC (Autodesk and Gerber Technology have only recently joined the PLM fray). Then, I analyzed the advantages of the second PLM group: the Big Three enterprise resource planning (ERP) vendors - SAP, Oracle, and Infor (NGC Software would be an ERP and PLM combination in the fashion/apparel industry).

Part 2 analyzed the typical shortcomings of ERP-based PLM offerings and concluded with the current state of affairs of PLM implementations. In a nutshell, the reality is that PLM implementations have yet to produce clear return on investment (ROI) and a PLM implementation often means a compartmentalized product data management (PDM) implementation in an engineering department, with not many instituted collaborative PLM processes across other departments and trading partners.

My post concluded that in spite of the elusive benefits from PLM collaboration, switching from one PLM system for another one (regardless of its CAD or ERP origin) in a rip-and-replace manner will not necessarily solve most of the aforementioned issues.

Can the "New Organic" Crop of PLM Apps Help?

But as in the case of rigid and monolithic old ERP replacements (e.g., see Workday’s recent ongoing success), the fact is that some companies are switching PLM systems when they have a failure condition. I believe that the economic/political reality moving forward into the future will make the multi-million dollar "big bang" implementation approach less and less appealing (no matter what the aggressive PLM sales person might say). The idea that one big PLM process and database will work across all departments is not a reality.

Therefore, a federated PLM database and processes, object messaging, and/or a lego-like approach may be the best strategy. In this setup, a set of PLM processes becomes a layer on top of one or more underlying enterprise solutions. Each underlying PLM and/or ERP solution can be specific to the particular process step or department in the process.

To overcome the shortcomings of the traditional CAD- and ERP-based PLM providers, there has been a new crop of so-called organic PLM products, such as those by Aras Corp., Arena Solutions, Nuage, Omnify Software, Tradestone Software, etc. While they differ in their approach and functionality, these products have an ERP and CAD agnosticism, as they have always had to hook onto some other system. These vendors also have a focus on unadulterated PLM/PDM processes instead of trying to learn the PLM processes from the mindset of CAD or ERP users.

Most of these products were founded at about the same time as or NetSuite (or even later), and have built their functionality on newer component-based service oriented architecture (SOA) and model-driven architecture (MDA) principles. This PLM group should also include the recently launched Autodesk PLM 360 (formerly code-named Nexus PLM) subscription-based product (touted as "insanely configurable" by Autodesk) as well as cloud-based PLM data discovery services, PLM process execution, and app stores by Inforbix, Kenesto, and OakBarrel Software respectively.

Most of the older ERP systems (and PLM systems for that matter) are SOA-compliant, some are even even hosted in the so-called private cloud manner, but that is all about retrofitting new technologies on older architectures rather than being built from scratch on new technologies. Not to mention all of the recent acquisitions by the large PLM providers for the add-on quality, sustainability, systems engineering, product analytics, etc. capabilities, which then make these big old PLM suites feel like "little Frankensteins."

Aras and Autodesk PLM 360 – Modern Architectures

While some of the new PLM vendors are more for SMB companies, Aras and Autodesk PLM 360 have positioned themselves for companies of all sizes including larger global enterprises. They provide the ability to connect and extend complicated legacy environments such as the numerous PDM and ERP systems that a company may already have around the world.

These two PLM vendors have approached their technology platform as a loosely coupled set of services, and their approach is not monolithic. The idea is for companies to use what they need, federate to legacy systems, leverage their existing investments, and achieve greater functionality and more flexibility.

These vendors layer more specific PLM processes (e.g., supplier compliance, mechanical parts, electronic components, simulation analysis, compliance data, product analysis, outsourced product engineering, etc.) on top of one or more existing solutions already at a business. Companies can use these PLM solutions that way forever or retire systems over time on their own schedule (when it makes sense).

Oracle's Agile PLM – Somewhere in Between

Oracle's Agile PLM is not exactly an ERP-based PLM system, since it is being sold by Oracle as both a standalone PLM solution and together with Oracle’s multiple ERP products. The product is also a generation or so older than the new crop of organic PLM solutions. Agile PLM is the strongest proposition at pharmaceutical, consumer packaged goods (CPG), medical devices, and high-tech/semiconductor companies that need to manage bill of materials (BOM) changes across a vast supply chain, often involving strict regulatory compliance and outsourced manufacturing. The product's corrective action/preventive action (CAPA) and other product quality management (PQM) capabilities are impressive.

Oracle's Agile PLM is easy to implement and upgrade as it was designed as a standard application that is easy to configure and reconfigure. Implementations in a couple of months time are not uncommon. Reduced information maintenance costs, certified industry content, open interfaces and the support for multiple CAD and ERP products (or multiple customized instances of ERP products) are other advantages of the offering. Agile PLM has also meanwhile benefited from the rich Oracle Business Intelligence Enterprise Edition (OBIEE) framework for product analytics as well as from sustainability and governance, risk, and compliance (GRC) enhancements from its Oracle ERP brethren.

On the downside, the product has limited digital manufacturing and product simulation capabilities, as it was originally designed to support outsourced manufacturing (and not really the in-house manufacturing of complex products). The Oracle ownership brings both positive and negative aspects. Only time will tell whether the need to support Oracle's applications and infrastructure will slow down the PLM innovation.

If sold in tandem with Oracle’s ERP systems, Oracle's sales and marketing staff might not necessarily focus on the PLM product's outsourced manufacturing capability. In non-Oracle IT shops, some CIOs might push back on another big infrastructure component and investment. Last but not least, while Agile PLM is good at connecting to ERP and manufacturing systems it has not been as proficient in connecting to engineering systems in the past. However, with the latest release of Agile Engineering Collaboration, it can more easily connect to engineering systems and is reportedly winning head to head in CAD data management deals.

Large Corporations or SMBs – Who Is More Likely to Innovate?

In any case, embedded/inherent SOA, cloud, social, workflow, and other traits of organic PLM systems are simplifying the PLM implementations (via the so-called "addition by subtraction"). At least these systems should be easier to configure and implement in chunks (a process at a time). For instance, Aras suggests a federated cloud-based PLM process layer on top of PDM/PLM installations, given that most PLM deployments are about PDM in engineering departments.

But the question is whether small and medium enterprise (SME) companies would benefit more from this new generation of PLM tools than global Tier One corporations. Global aviation and defense (A&D), CPG, and/or automotive companies have multiple sites that are vertically integrated (i.e., they supply each other with components and subassemblies). They make the same or similar products in multiple plants across the globe. These companies also extensively use digital manufacturing simulation and integration to the shop floor automation devices.

On the other hand, SMEs are more likely to have flat manufacturing topography, whereby products are often made in one plant. As they probably outsource more, their level of manufacturing automation is less complicated, and digital manufacturing simulation is rarely used. When the argument of "new PLM vs. old PLM" plays out, the argument is  re-iterated as follows:

  • The established old PLM solutions are optimized for global deployments, synchronization of data, and transmitting large files. When a new PLM challenger gives one reference example, the old PLM counterparts have several additional options to provide.

  • The old PLM vendors highlight their "Swiss army knife" capabilities for customization and mind-blowing deployment and system integration (SI) options. This can be both good and bad. Many of the large PLM vendors' customers have very large development staffs and they like all of the customization options. Customization tools are still viewed as a competitive advantage here.

In a nutshell, the new PLM providers focus on small quick wins and quicker time-to-value. In contrast, the old PLM players focus on their ability to solve all of the PLM problems in theory. Who is right?

Some Selection Guidelines

After perusing this series that describes every PLM group of vendors' pros and cons, you might be rightfully confused as to whether there are any viable high-level guidelines when it comes to selecting the best PLM solution. To that end, Oleg Shilovistky’s Beyond PLM blog post sheds more light on the ERP and PLM systems’ characteristics.

As some general guidelines, for companies with overly complex bills of materials (BOMs) and systems engineering needs such as in the A&D, industrial machinery, and automotive sectors, a CAD-based PLM offering might still be the best option. With an increased acceptance of lean manufacturing practices, transactions become mostly about backflush accounting and order releases to control workload. ERP requirements are not that complex in this case, and are mainly focused on (lean) accounting.

ERP systems, Microsoft tools (i.e., Access, Excel, Project, etc.), and/or homegrown PDM systems are best when volumes and product complexity are low. Indeed, with one simple product release a month, do you really need a full-fledged PLM suite?

A PLM offering with tight ERP integration is best suited in engineer to order (ETO), assemble to order (ATO), and configure to order (CTO) environments with in-house manufacturing. These companies should have tight integration of PLM data into product configurators and sales quoting systems that often come from ERP systems.

Last but not least, newer organic PLM products (often with "social" traits and often in the cloud) might be best used in multi-ERP and multi-CAD environments, with somewhat or completely outsourced manufacturing, and maybe even outsourced design. There are many examples of companies in consumer electronics and consumer goods/retail that would fit that mold.

Dear readers, what are your views, comments, opinions, etc. about the PLM, CAD, and ERP software? We would also be interested in your experiences with these software categories (if you are an existing user) or with your current (possibly ineffective) product development practices. How do you view our aforementioned high-level PLM selection guidelines? What PLM solution’s origin have you selected and why?
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