If the world of business were an orchestra, Enterprise Resource Planning (ERP) is the conductor that keeps the operations in rhythm, and Product Lifecycle Management (PLM) is the visionary composer that writes the score, innovating for the future.
ERP has been the backbone of organizational efficiency for decades, a mainstay in orchestrating the flow of information and resources across every department. But while ERP ensures the music keeps playing, PLM is driving what that music sounds like in the first place. It’s shaping the future of products, from concept to market, acting as the engine of innovation.
PLM vs ERP: The Basics
PLM focuses on managing the entire lifecycle of a product, from ideation, design, and development, through production, to end-of-life disposal. It is crucial for handling product data, workflows, design changes, and collaboration across departments. PLM ensures that the latest product information is accessible, accurate, and can be leveraged for informed decision-making, particularly in product development and engineering.
On the other hand, ERP is primarily concerned with the operational aspects of a business. This includes procurement, inventory management, accounting, supply chain management (SCM), and human resources. ERP systems provide real-time visibility into a company’s financial health and production processes, allowing for better forecasting, resource allocation, and overall management of business operations.
Which Comes First?
One of the key questions faced by growing organizations is which system to deploy first: PLM or ERP? The answer depends largely on the company’s stage of development, business model, and product lifecycle needs.
Early-Stage Companies: PLM First
In the early stages of product development, especially in industries like medical devices or high-tech manufacturing, a PLM system often comes first. In this scenario, ERP systems might not be immediately necessary since the focus is on prototyping and small production runs rather than large-scale manufacturing. As the company moves towards commercialization and volume production, integrating ERP to handle procurement, financials, and inventory becomes crucial.
In a real-world example, Desktop Metal, in their early R&D phases, prioritized PLM to capture product data, design iterations, and engineering workflows. Startups often start with lightweight systems like Google Drive or CAD tools for product data management (PDM) but as they enter a stage of hypergrowth, they quickly realize the need for a robust PLM system to manage complex product designs and changes. Read the Desktop Metal case study here.
Scaling Up: Parallel Implementation of PLM and ERP
As companies scale, implementing PLM and ERP systems in parallel becomes a strategic move. When done correctly, this approach ensures that bills of materials (BOMs), vendor information, and part numbers are aligned across both systems, reducing the risk of data mismanagement and ensuring that both the design and operational sides of the business work seamlessly together.
Established Enterprises: ERP First (Usually)
For companies already in large-scale manufacturing, it’s not that ERP takes precedence, it’s that its longevity in the industry makes it a staple for decades-old businesses. Large enterprises especially will typically have an ERP in place, when their primary challenge is managing complex supply chains, procurement processes, and financial transactions.
In these cases, though, implementing a PLM system can help enhance product design, accelerate time-to-market for new products, and manage engineering changes efficiently.
Integration: The Best of Both Worlds
A fully integrated system where PLM and ERP work together offers numerous benefits. Seamless integration ensures that product information, from design specifications to BOMs, flows smoothly into the ERP system. This improves data accuracy, minimizes inefficiencies, and enables better decision-making across all stakeholders—from engineers and supply chain managers to finance and operations.
Key benefits of integrating PLM and ERP include:
- Reduced Time-to-Market: By streamlining product design and procurement workflows, companies can bring new products to market faster.
- Improved Data Accuracy: Real-time synchronization of product data between PLM and ERP ensures that BOMs, pricing, and procurement data are accurate and up-to-date.
- Enhanced Decision-Making: Both systems together provide a holistic view of product performance, costs, and operational efficiency, enabling better strategic decisions.
- Cost Savings: As Ray from the transcript highlighted, cleaning up product data in PLM before implementing ERP can save companies time and money during ERP implementation. A clean and structured product record ensures smoother ERP transitions and avoids costly data scrubbing efforts.
- Scalability: As businesses grow, having both systems integrated ensures that they can scale efficiently, whether through new product launches, market expansions, or mergers and acquisitions.
Integrate PLM and ERP Seamlessly with Propel Software
As companies strive for efficiency and growth, having an integrated approach to both PLM and ERP becomes essential. Propel Software offers a best-in-class solution that not only ensures seamless PLM integration with leading ERP solutions, it’s the only PLM that connects quality management (QMS) and product information management (PIM) on the same platform—creating a true digital thread from concept to customer.
Propel’s PLM software empowers businesses to manage product data, quality control, and change management with greater accuracy, providing a single source of truth for all stakeholders—from engineering and procurement to marketing and sales teams.
Propel’s cloud-based PLM platform has the unique advantage of being built on the Salesforce platform, which enables frictionless integration through a set of rich APIs. This specialized integration framework streamlines the automation of workflows, allowing real-time updates to flow between PLM, ERP, and other essential third-party systems apps like CAD or CRM, resulting in better customer satisfaction and improved business outcomes.
By facilitating this connection, Propel’s PLM solutions provide companies with the ability to control their production processes, manage engineering changes, and ensure that products meet regulatory standards while being delivered on time. In industries where product development must align closely with manufacturing and supply chain management, the integration of Propel’s PLM software with ERP platforms enables more informed decision-making, faster time-to-market, and enhanced profitability.
Conclusion: The Future of PLM and ERP with Propel
With cloud-based PLM solutions like those from Propel, businesses can bridge the gap between product development and operational execution, integrating seamlessly with ERP systems for a complete enterprise solution.
Discover how Propel can help your business optimize its PLM and ERP integration for better automation, quality control, and enhanced customer satisfaction.
