All entries for Monday 18 June 2012

June 18, 2012

ERP and PLM integration

The percentage of ERP implementation failure is high which is the ERP solution cannot fits organization objective. The critical reason of failure is organization did not preparing properly before use ERP solution, the information system is weak and preparation of business information data is not accurate and enough. Integration of ERP and PLM is a generation of enterprise systems.

PLM (product lifecycle management)is the process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal.PLM integrates people, data, processes and business systems and provides a product information backbone for companies and their extended enterprise. PLM can solve problem relate to products development, such as, how to organise products information data, how to generate and control products information data and who is responsible for different part of the products. On the other hand, ERP is more focus on organisation resources management strategy, eliminate resource waste and reduce costs. Therefore, today¡¯s vendors start thinking integrates PLM and ERP to increase the ERP implementation success rate and products quality.

The customers¡¯ needs in today are variable and constantly changing, organisation has to emphasis on production diversity to obtain market share. This business environment requires ERP system has to be able to processing the product information and inventory data to all departments effectively and accurately, in order to help organisation achieve the objectives of low production costs, high quality product and shorter new products launch time. Therefore, I think the PLM can be the base of ERP to achieve these objectives.

In addition, through PLM and ERP integration, organisation can effectively carry though significant innovation, for example R&D new and distinctive products, lower production costs and improve products quality. Integrated PLM and ERP system, provides value of innovation to organisation, at same time, gives organisation ability to control products manufacture. This integration brings organisation huge competitive advantage, because it pushed manufactural development, thus makes organisation capture and response to market opportunities quickly and confidently.


Charles Møller, (2005),"ERP II: a conceptual framework for next-generation enterprise systems?", Journal of Enterprise Information Management, Vol. 18 Iss: 4 pp. 483 - 497

Impact of Business complexity on ERP system

In today's fast changing environment and the impact of globalization, business became more complicated than before. The form of OEM, ODM, Joint venture has become more and more popular. Thus, the whole value chain has been extended to customers, suppliers and business partners. Under such circumstance, existing ERP solution could not satisfy organizations due to it only provide a simple interface with others. Furthermore, ERP system by nature only focuses on internal information flow and resource allocation. Such as the integrated IT platform make information go smoothly between different departments within organization. Everyone could easily understand and track the flow of their work. However the benefit so far only remain within the organizations. The collaborative business forms requires ERP system to provide more flexible solution and more focus on external relationship instead of just simple interface.

This is a big challenge for vendors to overcome due to more interest-related parties will be involved. To catch external business activity will be more difficult than internal ones. If the ERP system has to integrate IT system outside the organization, it will probably involve different type of systems, which may provide by different vendors and using different platforms and technologies. Moreover, if the organization has many suppliers and business partners, the size of ERP project will become too large to be managed. The impact of senior management involvement may not as useful as existing ones due to the fact that who could really in charge of the whole project should be agreed by different parties. Finally, when try to capture business activity between different business partners, how many business activities could be modeled? The confidentiality will also be an issue for ERP integration because these partners may be potential competitor as well. How many core business activities could be captured by uniform ERP system will really arise an issue.

To summarize, although the new business complexity globally has required more feature from existing ERP system, how to achieve them should go through carefully consideration.

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