PLM and ERP Coexistence

November 12, 2009

Many companies that operate a collaborative PDM (cPDM) application, exchange BOMs with ERP. Many utilize an interface to achieve this. Still many face challenges regarding the correctness of these bills and also having to do additional work for the bill to do what it needs to do. In this article I’d like to touch on some of the business principles behind the coexistence of both the PLM and ERP worlds and also introduce some thoughts toward greater effectiveness.

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In this post I would like to introduce an all embracing view regarding the purpose of a Digital Mockup or DMU. When you research the topic there are different opinions what a DMU is. It depends where you come from. The AutoVue’s view is that the DMU is the lightweight product representation derived from a 3D CAD model. If you are a vendor of 3D CAD, then DMU is the source product representation created with the CAD application. Wikipedia I believe is pretty close: Digital MockUp or DMU is a concept that allows the description of a product, usually in 3D…. although what is meant with ‘concept’.

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To develop a product and ultimately maintain an asset you need to manage a number of product definitions going through the lifecycle from inception to disposal. Some product definitions are critical as part of EAM/MRO.
In this post I’ll talk about product definitions in general an then specifically those that are input to EAM/MRO. Literature may refer to these product definitions as BOM’s. I oppose this generalization as there is more ‘bom to a bom’. A ‘decomposition’ would be more appropriate and this decomposition consists of Assemblies. I once referred to these as bom-lets, in fact that is exactly what it is, small structures of sub-assemblies with components.

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In general companies do a good job recording problems and issues about their products. In specific industries elaborate problem records, trend analysis and resolutions are mandated by regulators. They may operate a Failure Record and Corrective Action – Preventative Action register. However what commonly fails is a formal register regarding Ideas for improvement i.e. not driven from failures. Ideation as a process is more than a box for personnel to deposit their thoughts about products. I once worked with producer/retailer company that claimed that out of the 1000 innovations per year 70% of their new product introductions flopped and failed to yield results they had planned for. Can you imagine the revenue potential this represents. If there was a way to half this flop rate, it would make a big difference to the bottom line. How much would this equate to.., take for example the lost aggregate potential revenue of specific products or categories that failed to reach the sales ramp-up phase in the last two years.

What would be the solution…. Today companies, with little effort and cost, can introduce a collaboration platform that would register ideas. Suppose you could populate this platform with (process-to-follow) templates i.e. how to move this idea further, see what earlier projects had similar patterns and above all can you imagine the potential that you could reports an internal ideation pipeline the same as you do with your sales forecasting.

Not to embark on Microsoft marketing, but SharePoint is an example of a capability of such collaboration technology. With again little effort companies can build a complete (hosted) ‘environment’ around the Ideation process. Personnel that generate these ideas can be those directly involved with marketing or product (sustainment) engineering or even those that are in the field, for example trend scouts, all would find a single source of information to record their observations but also share opinions regarding marketing potential. Operating such Ideation framework, you can would support the formal innovation process from internal surveying, reviewing and analyzing the potential and challenges and risks you may encounter and need to consider. Some level of Quality Function Deployment may be completed and recorded also. So basically you can easily address the information management needs and establish a foundation to drive a Structured Ideation process.
As companies hit a specific Ideation maturity stage/gate, more personnel and financial resources may be allocated and a formal ‘gated project’ may be decided. Here comes Schedule Management into the equation that I talked about in other posts. Companies may want to operate specific new product introduction work breakdown structures and schedules for specific product categories. And here is the crux, these ‘standardized’ gated schedules then become success teamplates and the base for continuous improvement. It would make new production introduction process structured and predictable which should ultimately have a positive influence on the right product for the right market and corresponding sales success.

Lastly, as an idea moves forward and reaches maturity, marketing and product development start to exchange product requirements causing ‘requirements engineering’ to kick in. As more requirement information is generated, the need for requirements management is imperative and as more aspects of the product are being defined (project brief) we then gradually transition into the formal Product Lifecycle Management defined processes.

As discussed in ‘Schedule Management your smart Project Engine’ and considering new product development, WBS templates will be synchronous with a product breakdown structure. The military Def.Std 0060 and Mil.Std. 13882b define functional and physical product breakdown structures. The focus of the first is the requirements definition whereas the second is the resulting physical product as it will be certified for operational usage according to the ‘V’ model. Both approaches support top-down engineering principles where you start with the product schematics that gets detailed and populated with assemblies, sub-assemblies and parts. This approach is an ideal mechanism for front-loading.

Obviously it is not necessary to front-load a complete product, the ability to just complete this for certain product areas is by itself a major advantage. The prove that this works can be found in the automotive industry. Today’s turn around time for vehicle development is the result of being able to front load specific disciplines with placeholder product breakdown structure (PBS) and to drive the engineering process with the linked work ‘Requests’. As the industry works with product platforms and initiating such a PBS, specific assemblies and sub-assemblies and component items are carried across/over. It must be realized that those items Carried-over and -across are in fact technically and commercially certified and the certification management may extend to certification across multiple model years or multiple vehicle lines. The downstream benefits of such approaches are enormous.