When Titans Clash: PLM Versus ERP

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Traditionally, enterprises have used PLM (define), usually in engineering-centric industries like automotive and aerospace, to create component lists that are then used by ERP (define) systems to generate bills of materials.

Increasingly, however, companies are using PLM to improve collaboration between engineers and to support the design process.

The game

IBM (Quote), as well as its rivals, now sees the potential to expand these features outside the four walls of the enterprise, driving better coordination and collaboration up and down the supply chain and, ultimately, to significant improvements in innovation and time to market.

Analysts also agree that PLM has a significant role beyond the engineering sector and the shop floor.

“PLM is [no longer] a single application but a process that crosses multiple business processes and technologies, i.e. marketing and supply chain,” noted AMR Research analyst Michael Burkett in an e-mail.

PLM should have a more strategic role in the enterprise, added Dick Slansky, who follows the PLM space for ARC Research. “It’s become about more than just build, support, maintain. It’s also a business strategy.”

IBM’s research shows that enterprise executives now intend to spend more on IT that can drive innovation, as opposed to cost cutting.

New PLM applications can drive innovation in a variety of ways. For one, they allow engineers to redesign portions of a product without disrupting the rest of the design — what is referred to as the “decision tree.”

“It means you don’t have to completely redesign this thing and output a whole new list of materials,” said Slansky.

PLM can also allow manufacturers to virtualize the factory floor, simulating the motions of robots and conveyors and the other machines to validate that they will work well together.

PLM also helps engineers work collaboratively with mechanical and marketing departments to increase time to market.

The players

For IBM, the platform starts with SOA (define), which allows enterprises to work with a variety of applications seamlessly.

On top of that, it can leverage deep computing hardware and other products from its systems and technology group to support computer aided design, product data management and computer aided engineering.

Big Blue is rounding out its platform with the adjunction of eight leading vendors of PLM applications who have pledged to develop native connectors to the PDIF infrastructure.

The company also intends to use all this hardware, software and infrastructure to generate more revenue for its services.

Analysts believe that IBM has a significant head start on the competition. “What is interesting is the progress made in automating the processes, integrating the flow of the work through these processes, and the sophistication and integration of the supporting infrastructure,” said Richard Ptak, principal analyst with Ptak, Noel & Associates.

Burkett said that PDIF does a good job of connecting “pre-built assets and a partner ecosystem.”

“Their true value proposition is to knit together the disparate applications and data repositories used in a new product introduction process,” said Burkett.

Slansky noted that IBM excels at defining architectures, thus defining the rules of the game. “They do it as well as anybody,” he said.

IBM is a top middleware vendor “and today is arguably the most recognized platform,” Burkett concurred.

However, traditional vendors in the space are not that far behind, and new entrants are also poised to challenge IBM.

“IBM has a head start, but they are definitely looking at Microsoft over their shoulder,” said Slansky.

Burkett added that “SAP, Oracle and other ERP vendors offer their own PLM applications and will position their single integrated suite against IBM’s ecosystem of PLM partners.”

However, enterprises have also made significant investments in ERP applications and the Microsoft stack, Burkett said. “As they add more robust SOA, this will become a challenge to IBM,” he added.

All of them “will compete to be the integration framework for all processes within a business,” said Burkett.

ERP and PLM have co-existed well in the past, but ERP vendors have also been expanding the utility of their products to include more traditional PLM applications.

Slansky said a debate is taking shape over the respective roles of ERP and PLM. That is bringing traditional ERP vendors like SAP and Oracle to the PLM party.

Microsoft, for instance, has forged relationships with leading PLM vendor UGS, as well as longtime IBM partner Dassault Systemes, a vendor of 3-D modeling technology, to connect their applications to Vista.

This article was first published on InternetNews.com. To read the full article, click here.