Product driven companies are always looking for that next big hit, the product or family of products that earns them higher market share, greater customer loyalty and optimized profitability over the product’s entire life. But innovation doesn’t happen by accident and getting all the details and specifications of a new product just right is more science than art. That’s where technology comes in. A robust Product Lifecycle Management (PLM) application added to your ERP system can fundamentally alter they way you ideate, design, engineer, produce, service and, ultimately, discontinue a product. Like so many three-letter product concepts in the world of ERP, PLM hardly does today’s powerful software systems justice. They might better be called innovation engines or collaboration platforms. Well, we’ll stick with PLM for the purposes of this series of articles, and explore how the breadth and depth of the best-of-breed systems’ functionality can make your company more prolific, productive and profitable.

ERP system

How PLM spurs innovation, performance and quality for product-driven companies. (Part 1)

A fundamental promise of ERP systems today is the real-time interconnectivity they provide across not just all the departments of an enterprise but with suppliers, partners and customers as well. An ERP system, at its heart, is a vast information-sharing platform, fostering collaboration and breaking down walls between great ideas, wherever they originate. PLM extends that concept of collaboration to all aspects of a product’s life, recognizing that product-driven companies today have long value chains of contractors, suppliers, partners,  distributors and customers.

PLM software impacts how work gets done and information shared in engineering, procurement, manufacturing, service and maintenance, quality management and product change management.

The complete engineering process benefits from PLM in many ways. All product information, including specifications, CAD documents and drawings and bills of materials (BOM) are integrated into a single database that can be available to all internal resources or on a fire-walled, password protected basis, for external partners.

To get the ball rolling, engineers can tap into a library of product structures and BOMs created as general templates or derived from a previous product development. Once a new project is initiated and a template selected, the system launches processes for product master data management and project management.

Project managers can use the PLM system to establish strategic requirements such as target dates, costs and product requirements. As the functional specifications for the project take shape, other departments can add value in an on going, virtual “project review”. They can iteratively update the product structure, link in other documents, update scheduling and replace target costs with actual costs. PLM systems can orchestrate this organic development process, keeping everyone on the same page and prompting contributors inside and outside the organization when they need to contribute their own unique value.

When the functional specification is complete, the project manager can release the project to engineering for completion of the BOM for testing and simulation. As the functional specification is refined, externally created CAD documents are added to the product structure and the iterative review process is repeated at the engineering level. Once the engineers have completed the material BOM, the technical BOM is released to other departments for technical validation and the beginning of the procurement process.