SAP Enhances PDM Software (Slightly)




SAP Enhances PDM Software (Slightly)
P.J. Jakovljevic - March 20th, 2000

Event Summary

In February SAP AG announced an expanded version of an application that lets manufacturers collect and manage databases of information about the products they make. SAP's announcement continues a trend that started last year among vendors of product data management (PDM) software.

Once confined to engineering departments that wanted to keep track of their product designs, PDM applications are now being reinvented as Web-based systems that can be used by a wide range of internal and external end users to check on products, from the development stage through manufacturing and use by customers. For example, SAP's new Product Lifecycle Management (PLM) software includes links to its business planning and product configuration applications, plus a set of Web-based tools that can be used to work collaboratively on product plans and changes with customers and suppliers.

Saudi Arabian Oil Co. (Saudi Aramco) is one of the first companies that signed on to use the new software. "The oil producer plans to turn on the beefed-up PDM applications late next year as part of a wider rollout of SAP's R/3 enterprise resource planning system", said Guy Pengelly, the lead designer on the logistics piece of the Saudi Aramco project. "The collaboration tools that SAP is now providing should make it much easier to gather and maintain data about the equipment used in Saudi Aramco's refineries", Pengelly said. That information, which manufacturers now send in on floppy disks that have to be loaded into a homegrown mainframe application, is vital to keeping the refineries open. "Without that data, it's very hard for us to maintain our equipment, and maintenance is really our business," Pengelly said. "In order to sell oil, we have to have plants that run."

Schindler Management Ltd., a Switzerland-based maker of elevators and escalators that already uses an earlier version of SAP's PDM software, plans to upgrade to the more advanced version in May 2001. Edwin Ming, a senior PDM engineer at Schindler, said the company had to develop its own Web-based user interface when the SAP software was installed in late 1998 for use within its sales, engineering and manufacturing operations. "Having an SAP-developed Web browser will free Schindler from the need to upgrade and maintain its own code", Ming said. "And the new collaboration tools should make it more viable to open up the PDM system to external suppliers", he added. But the company still needs to work with external users to figure out exactly what kind of data they should see and how it can be safeguarded, Ming said.

Market Impact

Contrary to its CRM and SCM initiatives, SAP was one the first ERP vendors to recognize the need and tackle development of its own PDM functionality. The product lifecycle management (PLM) is a natural extension of the earlier SAP PDM module.

SAP PLM is envisioned as an integrated business application within mySAP.com for managing the complete product life cycle of the extended supply chain, from design and production through sales and maintenance. It enables fast, reliable collaboration for product design, manufacturing, and service within an enterprise and with external trading partners. Companies will benefit by achieving greater control and accuracy over the product life cycle, bringing products to market faster, and improving product designs to better satisfy customer needs. The product brings benefits particularly to companies in highly engineering-involving industries (e.g., petroleum & chemicals, aviation & defense, etc.) where SAP has a large foothold.

While we do not believe that the latest product exhibits any significantly new functionality besides being a Web-enabled version, we endorse SAP's holistic approach to integrate PLM, SCM, and CRM products, and this is a step in the right direction. We also acknowledge a painstaking effort and significant amount of time required to accomplish that integration. As also admitted by the company's official during one analyst briefing, this is still a 'pie in the sky'. Nevertheless, the new software puts SAP in the same Web-based collaboration and product life-cycle management league with specialist PDM vendors such as Parametric Technology Corp. in Waltham, MA, and Structural Dynamics Research Corp. in Milford, OH.

User Recommendations

We believe that SAP is slowly moving in the right direction, and has huge financial, sales and personnel resources to throw at the problem. Nevertheless, users are advised to consider both product maturity and functionality in their evaluations and make comparisons to competitive offerings. Existing SAP users will have to decide between brand loyalty (which means waiting until at least the end of this year for the GA product release, with possibly sub-optimal functionality) and considering already available and fully functional products from niche vendors, however, with the inevitable interface nemesis.

 

 
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