ERP is the largest single solution deployed within our target customers. This is true if you look at the monies spent by the customer or the number of transactions the system performs on any given day or the number of people that touch the solution within the customer. Some would say the one thing ERP has not touched is Engineering or the Product Development process… In MHO I would say this is wishful thinking. Certainly the average engineer or designer uses ERP through out the development process. They get their part number from the ERP, they check the cost of parts in ERP and they might determine where used for a component they are looking to add to their new design or inventory levels for this component. And certainly they would use ERP to create a purchase order for that prototype they need. So with all this Engineering based use of ERP, why did PLM tools ever get a chance and does the ERP vendor have a master plan for Enterprise domination?
For me PLM was PDM growing up and expanding on the basic feature of CAD file management which is certainly something better left to the CAD vendors than the ERP vendor. In the early days of PLM I would bet ERP vendors almost didn’t know these CAD files existed or at least didn’t care because the official release was being done in ERP and no one really cared about these files or what happened prior since the ERP system ended up owning the product definition. I expect what got the attention of the ERP vendors is the fact that customers started to release products in another tool, PLM. Soon after this ERP vendors had “marketing” around the fact they could be the PLM provider. Certainly this makes sense for release management because right after you release your new product with your PLM tool you transfer this information to your ERP solution (PLM vendors even have integration solutions for connecting ERP and PLM, but ERP do not push the reverse)! The real struggle/hurdle for the ERP system is CAD file management – how to manage all those complex and inter-related CAD files… I would bet that the ERP vendor has no real interest in CAD file management nor do they see this as a threat. But I am sure that the ERP vendor sees the PLM vendors as a threat every time the PLM vendors gain success with customers around product management features or when PLM captures and manages data about the product.
So we can be assured that as PLM tools do more than CAD based PDM, ERP vendors will fund “Domination” plans that ultimately remove the need to have a separate PLM tool!
In a previous post People or Process Another Chicken and Egg I simplified the product development process into Design, Release and Manufacture and in another post People Centric PLM – A New PLM Age Is BornI defined a new market segment which I call People Centric PLM. My morning coffee thoughts, that is once I got thinking about work versus last weeks vacation to South Africa:
- Is there some evil master mind in the bowls of the ERP vendors lair plotting to even simplify my simplified definition?
- Could ERP vendors reduce my simple three to just two?
- Could the product development process be simplified to just Design and Manufacture?
- Could release just become a simple transaction that is part of what the Manufacturing system does (maybe it already is…)?
#1 by Stan Przybylinski on September 2, 2009 - 8:27 am
I am not sure I agree with ERP vendors ignoring CAD integration, at least not in the case of SAP. They went to the extent of banding their CAD integration providers together into a cabal, the PLM Alliance http://www.sapplmalliance.com/.
They can’t ignore it. They just have to do enough with it to make it easy for the IT managers they control to argue that “SAP can do it.” If they can make it a question, people who have made the decision to spend millions on SAP will be able to keep the PLM side of the argument at bay.
#2 by oleg Shilovitsky on September 4, 2009 - 4:22 am
Chris, I think main driver is move to more connected enterprise environment. Time ago, ERP was leading release processes and, as you said, even didn’t know about “these CAD files”. There is a fundamental shift from “to feed ERP” with released design in PDF format and design to manufacture processes streamline. In my view focus of PLM on that. If ERP vendor can do it too? Yes, I think this is very possible scenario…. Especially since they (ERP) are moving from minimalist approach mentioned by Stan, to more advanced involvement of CAD/Design/Visualization. Alternative will be to have BPM vendors on board to capture cross domain processes.
Some additional thoughts about it-
http://plmtwine.com/2009/08/29/plm-prompt-plm-and-the-rise-of-business-process-management/
http://plmtwine.com/2009/09/03/plm-and-multi-domain-business-processes/
Regards, Oleg.
#3 by admin on September 4, 2009 - 8:04 am
My point wasn’t that they have ignored it but more that it is not seen as strategic and PLM as an opportunity was not on thier radar until there was more than file management. Besidea it is not like customers were out of control before there was file management. At one point I worded in the print room managing file draws. And lets not forget the high tech micro film that I am sure we can still find in use in some places.
I am sure we can put someone on the moon, release a hot new car and crack open the blender market with a hot new concept WITHOUT EVER MANAGING OUR CAD FILES. For instance I know a very large medical deveice manufacture that still does not manage thier CAD files – they simply manage an image file of the drawing within Agile (SAP product right). I can imagine 100′s of sales people have banged on the door telling them they are out of control, not compliant, could be more innovative, only if they managed the CAD files… but still they do not.
So is CAD file management required or just evil?
#4 by admin on September 4, 2009 - 8:31 am
Oleg are they moving to CAD/Design/Visualization? If they were don’t you think they would have taken out someone like PTC? At multiple points in time PTC could have been purchased for short money… Do they really care about this stuff or is this more lip service?
In MHO CAD is not that important to them because they own the BOM. The control point to Release is the Bill-of-Material not the files and ERP owns the BOM. Visualization has no value at Release, it is only valuable before (Design) and after (Manufacture). This is why SAP invested in Right Hemisphere even though they owned visualization technology (Design based solution). Right Hemisphere provides them a Manufacturing based solution and adds one more presure point against PLM vendors.
#5 by Dima.Kruchuev on March 8, 2010 - 4:08 pm
I fully agree with all the positive feedback on the blog, although there is little negative.