PLM and ERP data

Product lifecycle management is tightly connected to engineering because of some historical reasons. At the same time there is a huge value in connecting product lifecycle management solutions to manufacturing data.

For the last years, I can see a strong trend to connect engineering and manufacturing systems – MRP, ERP and PLM. The time when engineers were able to through their designs over the “manufacturing wall” and hope for good is over. These days companies are demanding tight integration between engineering and manufacturing functions.

The demand for PLM software capable to connect both engineering and manufacturing silos is growing. There are few important domains of integration to be mentioned.


Material information is traditionally located in manufacturing systems – MRP, ERP. At the same time time, this information is very valuable for engineering and product development. To connect this information to design and product lifecycle management systems is important to improve quality of design, product cost and future manufacturability.

Bill of Materials

Earlier in this book I discussed multiple dimensions of BOM complexity. Manufacturing systems (MRP and lately ERP) are managing BOM and it became core part of manufacturing planning and procurement processes. At the same time, to streamline processes and improve product quality and cost, to provide information about MBOM in PLM systems can be very important.


I’m sure you’re familiar with the term “through over the manufacturing wall”. This is an old paradigm when engineering was responsible design and then passed it to manufacturing department for future transition into manufacturing. The truth is that it brings lot of inefficiency and requirement many back and forth communication between engineering and manufacturing. Modern PLM systems should take care of manufacturability (often call DFM – design for manufacturability). Part of this process is provide data transparency between engineering and manufacturing data silos.

How does ERP connected to PLM

The integration between PLM and ERP is one of the most widely discussed and debated topic during PLM implementation. ERP system is de-facto standard for large (and often mid-size companies). Therefore ERP relation with PLM is often critical to define a success of PLM strategy and implementations. There are two major ways PLM and ERP are coming into connection: 1- What system to implement first – PLM or ERP; 2- How to integrate PLM with ERP and what data should be controlled by each system. I will address these topics in the part of my book related to PLM-ERP integration.

Should PLM systems manage a subset of ERP data?

In my view, there are two major patterns happening today in the PLM-ERP world which I’d identify as follows:

Pattern 1: Close Space.

Engineering Systems is a closed environment focused on their specific engineering tasks and limiting their communication with ERP space. These systems send/receive very essential information such as product design (CAD model, drawings) and identifications such as Part Numbers. What is typical for this pattern is that both these environments (PLM and ERP?)  seems to have a status quo (an unwritten agreement) about not crossing borders and feel very comfortable with this agreement. It looks like the people responsible for both implementations are saying “don’t touch me and I will not touch you”.  I’ve seen people defending this position by saying that enterprise organizations need to be managed by siloes.  So, Engineering and ERP are different silos and need to be managed separately.

Pattern 2: Open Space.

Engineering Systems see ERP as an essential part of their business relations in a very closed manner. It means that both system classes are focused on how to leverage information and processes between these two spaces. ERP can provide the engineering environment with business insight on how they need to design products – business and manufacturing information, customer info, logistic and supply chain data. On the opposite side, if engineering processes can introduce product to manufacturing already in the early stages of development, these can be greatly appreciated by manufacturing and their ability to optimize product design using manufacturing feedback.

In my view pattern 2 is something to which the future belongs. Engineers are the most important source of IP (Intellectual Property) in the company. They design products and create IP. Companies need to focus on how to get this IP out of engineering use it downstream. In addition, engineers need to take care and find a way to deliver the right ERP/Manufacturing data for CAD/PLM. In this way  they will be able to optimize product design already in the early stages of development.  In my opinion, PLM should take a leading role and engineers need to take care of ERP. I know it sounds strange, but only engineers know how to use information they create. Therefore, PLM needs to create a language and create tools and processes about how to take PLM IP downstream and integrate it with the manufacturing environment in your organization.

4 Reasons why it is hard to deliver MBOM in PLM?

Manufacturing Bill of Materials or MBOM. Where it belongs and how to support it right? Does it part of your ERP system? PLM system? Is it a piece that normally fails between chairs of engineering and manufacturing? In PLM development, manufacturing BOM is usually a piece of functionality that raises lots of disputes and inconsistencies. PLM vendors usually put MBOM as part of the overall PLM solution.

The discussion around Manufacturing BOM is quite hot. The question where is MBOM can be spotted in the discussion about how manage data between engineering and manufacturing. This is a question customers are probably asking the most. Where do we need to plan our MBOM implementation? Is it part of PLM? Is it part of ERP?  Some of companies can say that we don’t need to manage MBOM. Engineering BOM with some modifications works just well. At the same time ERP ability to manage MBOM is often outdated and inefficient. But  ERP systems are built to schedule and execute the production of well defined products in the most efficient way. It doesn’t fit well to manage the process of definition and changes in bill of materials – EBOM and MBOM.

The importance of BOM is high. Manufacturing BOM is critical to successfully build a product.  Here is an interesting quote: “The manufacturing bill of materials drives manufacturing, operations, purchasing and logistics for a product. The information from the MBOM feeds the business systems used to order parts and build the product. These include enterprise resource planning (ERP), materials resource planning (MRP) and manufacturing execution system (MES) solutions.Inaccuracies in a manufacturing BOM lead to problems: If the wrong parts or wrong quantities of parts are ordered, a company will not be able to build enough product—or any product at all. This leaves the company with unusable components that need to be returned or extra parts that tie up money in inventory. For manufacturing and operations departments that are already running lean, cleaning up these mistakes is a hassle that wastes time and money. Depending on the size of the original mistake, the amount of money lost could be large enough to impact the company’s bottom line”.

So, what are main reasons that preventing PLM vendors to deliver a successful MBOM in PLM and why manufacturing BOM is always an issue in most of PLM implementations.

1- Most of PLM implementations starts from CAD/EBOM.

This is a typical PLM implementation route in many companies. CAD data management, Bill of Materials – document BOM, engineering BOM, change processes (ECR, ECO) and … MBOM.

2- Engineers are not taking care of MBOM.

Manufacturing BOM is less related to engineering work. Usual “bad” engineering practice is to forget about manufacturing work and to come very late to implement the overall BOM management solution. The trend is to have an integrated solution, but changes happen very slow

3- Structure synchronization is messy by definition.

In order to keep multiple BOMs synchronized (inside one system or multiple systems), PLM vendors developed multiple synchronization tools.  Industry didn’t invent any better option, but synchronization tools usually not good (by definition) and brings lots of complexity in the engineering to manufacturing process. MBOM is a key part of this process.

4- To get data about manufacturing parts is painful.

Any PLM implementation required to do so in order to deliver an efficient MBOM solution. Without that, PLM manufacturing implementation is very limited and can end up by serving as “yet another data silo”.

Manufacturing BOM is very important to deliver a PLM value “beyond engineering”. The complexity of data and systems make it complex to deliver. This is one of few solutions that has no shortcuts. You need to get data from ERP/MRP system and you need to blend it with your best engineering effort. I think, an efficient MBOM solution today is mostly service and consulting project combined with significant integration solution in place. A good place to innovate.

Manufacturing BOM Dilemma

Manufacturing process optimization is one of the biggest challenges in product development these days. Companies are looking how to low the cost, optimize manufacturing process for speed and to deliver large variety of product configurations. The demand for these improvements is very high. The time when engineering were throwing design”over the wall of engineering” is over. Engineering and manufacturing people should work together to optimize the way product is designed and manufactured at the same time. Which, in my view, leads to one of the most critical element of this process – Manufacturing BOM (MBOM).


PLM vendors are recognizing the importance of manufacturing solutions. However, it is hard to deliver MBOM in PLM. It related to CAD roots of PLM products, historical disconnect of engineers from manufacturing processes, complexity of synchronization between multiple BOMs and problems of integrating with ERP systems. Vendors are encouraging companies to use PLM technologies to manage MBOM and to push right product MBOM information to ERP for execution. The advantage of that is the ability of PLM to deliver accurate product information derived from design and engineering BOM.

However, there is another side in this story- manufacturing planning. Fundamentally, MBOM is created by manufacturing engineers and it reflects the way product is built. It usually structured to reflect manufacturing assembly operations, workstations, ordering process, etc. In other words, MBOM is a reflection of manufacturing process based on information from product design. Company can decide to improve manufacturing process for existing product. It means most probably no changes for CAD design and EBOM, but will require to create a new version of MBOM.

As a result of that, MBOM has dual dependence of both correct engineering information from PLM system and manufacturing constraints and part information management by ERP. Both are absolutely important. By placing MBOM in PLM system company can create a complexity of manufacturing process planning in ERP. At the same time, ERP system (more specifically manufacturing modules) are not providing dedicated BOM planning tools capable to handle information from EBOM and MBOM simultaneously.

Manufacturing BOM is stuck between a rock and a hard places. It must reflect manufacturing process and stay connected to both PLM and ERP environment. It creates a high level of complexity for existing technologies and tools. To create a cohesive environment to manage MBOM is tricky and usually requires significant services and customization.

Manufacturing BOM is the next cool thing in PLM

I’ve been doing data management system for the last 20 years. The one thing you learn very fast – 3D and visualization are cool. Data is boring. So, if you want to impress somebody (journalist, analyst, your boss… whoever else)  you need to create realistic representation of your future product. And show how to can turn it on the screen of your computer or better on mobile device (the reality of last 3 years). I agree, to see what you mean is cool, especially if you can make it before it will be manufactured. Awesome stuff. It can sell your product before it even exists. CAD/ PLM companies made lots of money selling visualization and rendering products. These days you almost cannot differentiate the video or photo of real car from realistic visualization.

Forget about it, for the moment… Design can be cool. However, important question these days is that – can you really make this product? If yes, than how? How fast? Or even more – can you make a profit after you design, visualize, manufacture and sell your product? articleThe Next Big Boom in PLM and ERP and the Battle Over mBOM Ownership announced “war alarm” between PLM and ERP companies around manufacturing BOM (MBOM). Article speaks about how important MBOM and Master data management in solving problems such as cost, quality, tooling and many others.

It made me think again about how future of manufacturing will be dependent on solving of old PLM/ERP integration problem. In my view, complicated data synchronization is really bad thing. It leads to complex behavior, user experience and, after all, to product data errors. The question of product data errors is one the disturbs manufacturing companies. Emailing spreadsheet with bill of material won’t make your product development and manufacturing process more efficient. The following passage from article is my favorite:

Ashley Morris, a researcher at Cardiff University in the UK, has identified seven root causes of product data errors. The three most important ones are 1/ Inaccurate data entry; 2/ Incorrect data flow between applications; 3/ Duplicate data between systems. Product development teams are all-too-familiar with how these errors occur given the various systems that manage the data. Generally cBOMs (configuration BOMs) and eBOMs (engineering BOMs) are created in the PLM systems, whereas mBOMs (manufacturing BOMs) and sBOMs (service BOMs) emanate from ERP or/and MES systems. But there’s no rule here.  Several variants and combinations are “on the map”.

MBOM is tough problem. I identified 4 main reasons why MBOM is hard for PLM. Read my previous article here. In a nutshell, here are four main reasons why MBOM solution is not simple for PLM vendors and service providers:

1- Most PLM systems starts from CAD and Engineering BOM.

2- Engineering and manufacturing people live in different worlds.

3- Synchronization of BOMs is messy by default.

4- For PLM to get data about manufacturing parts is painful.

Despite all these complexities and difficulties, PLM vendors is pushing towards better integration with manufacturing. I really liked the following quote explaining the objective of Bill of Material module by Siemens PLM:

“The objective of this BOM module (TC PMM) is to provide an integrated BOM foundation spanning Engineering, Manufacturing, Prototype and Service domains.” The tight integration to design and manufacturing processes can drive virtual validation of both these process types from a BOM point of view. “With our approach the BOM is documented once and various other BOM’s like mBOM, sBOM, pBOM etc are derived from this core eBOM, without re-documentation.”

So, what it all means for PLM? Bill of Materials (BOM) was always the apple of discord between PLM and ERP. Large companies these days cannot live with PLM and ERP systems. While engineering part of product information resides in PLM system, manufacturing part is managed by ERP. Product cost and quality can often fail between chairs and this situation disturbs manufacturing companies. This is the simplest possible configuration. Sometimes, design and engineering product even more distributed (look on Airbus’ case) – design (CATIA), product configuration (Windchill), manufacturing BOM (SAP).

Which brings me back to my thoughts about why companies are not ready for single BOM? Main reasons – specialized tools used by different departments, no agreement between organizations how to manage data in a consistent way, absence of ‘universal’ tools.

Manufacturing BOM is going to be in focus for many manufacturing these days. Efficiency and ability of manufacturing company to execute flawlessly becomes more and more important. Manufacturing environment is highly distributed these days with lots of constraints and dependencies. To design and bring product to market in a short time is a complex task you cannot solve without tools that will help you to synchronize and connect bill of materials.

The Ugly Truth About PLM-ERP Monkey Volleyball

What is the fundamental nature of discussing between PLM and ERP. It is about ownership of manufacturing data and more specifically – MBOM. I see this discussion as a natural part of the overall system development in the organization. Since early beginning of MRP and MRP-II, systems started to accumulate product data in the electronic form. So, data moved from spreadsheets to databases and Excel  spreadsheets. In parallel, design data started to move from paper to CAD and other design systems. Since then, all engineering and manufacturing systems are managing the very interesting interplay on where is data located and how you move this data from one place to another. Now what means this movement? This is something everybody present as a ‘ business process’. Yes, processes are the blood movement in the organizational body. However, the blood cells are actually pieces of data that processes moves around.


The ugly truth is that everybody wants to own the piece of cheesy product data! ERP, PLM, PDM, CAD… Everybody pretends on the part of the product data, but mostly interested how to control it. Everybody in this volleyball game is trying to catch the ball and steer it to their side. ERP is saying Item Master belongs to me! Every time you want to do something, ask me. CAD and CAD-based PLM pretends to be the best in managing product design, configuration and revisions. ERP vendors are trying to steer Bill of Materials by managing overall ECO process. Social software is trying to steer the ball, by saying let’s organize Facebook of design files. Before that time PDM was trying to organize dashboards of data. In parallel, social product development is trying to put data inside of SharePoint… There is an endless number of examples I can bring…

There is nothing new in this enterprise data life, but attempt to control data and accumulate data-tolls from enterprise processes’ toll-road. If you are good in organizing this toll-road, the ride won’t be bumpy and data arrives easy and customers will love it. Some of the tolls are mandatory. Try not to pay for CAD system or accounting, for example… It seems to me PLM road is a bit more bumpy in comparison to the ERP one.

(c) Can Stock Photo

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