Timing implementation of PLM and ERP crucial in contract electronics manufacturing

Among the many challenges that electronics manufacturing finance and operations supply chain executives face in contract electronics manufacturing is when, and how, their implementation of enterprise resource planning (ERP) and product lifecycle management (PLM) software is of most benefit, and achieves the most advantageous results.

Sometimes it is just as important to know when to implement a tool as when not to.

According to Jim McKinney, PLM leadership practice manager at CIMdata,“ERP tools tend to be very transaction oriented. Their goal is to move a product step-by-step until it is complete. PLM, on the other hand, is usually linked to 3D CAD models and accommodates changes, options, modifications, and frequent updates to models parts and products.”

McKinney continues, “ERP does not readily support product innovation. ERP supports innovation in manufacturing processes and technologies, but not product innovation. Innovative products are imagined and created during the PLM design activities, and not in ERP. By the time you get to ERP it is too late to add much product innovation. Commitments to product innovation are locked in during the PLM phases of product development.”

Analysts at Aberdeen Group, in an earlier report, observe with the slump in today’s economy, an executive’s automatic reaction may be to halt unrestricted spending on ERP implementations— just when ERP’s cost saving capability is needed the most.

Enterprise systems such as ERP and PLM have helped companies make big strides in improving product-oriented processes and performance.

Jim Brown, president at Tech-Clarity, says, “In the early 1990s, ERP helped integrate and streamline operations. The software allowed companies to automate their process and information flow across various functions, including manufacturing. ERP put in place a cohesive infrastructure to manage the business of production.”

Other enterprise applications professionals we talked with for this article but could not be quoted here because corporate communications turnaround times did not meet our publishing deadline, confirmed. ERP systems are good for planning and accounting, but areas where ERP can fall short include electronics production program scheduling, work-in-progress (WIP) monitoring, and assisting with manufacturing program execution.

One common theme that keeps coming up in all of this is change is inevitable. And in the electronics industry where product lifecycles are short, and getting shorter, and end markets can be fickle, an EMS provider’s success, or failure, can often be traced to his ability (or inability) to adapt.

Good ERP systems can help EMS providers (and electronics OEM companies) employ a wide degree of flexibility in helping the enterprise adapt to sudden changes.

Meanwhile, today’s business environment requires that top management views PLM as a strategic corporate asset, a cross-functional, enterprise-wide business discipline that augments innovation, helps drive significant revenue growth, and reduces costs of activities ranging from engineering rework to regulatory compliance.

For effective management of any product’s manufacturing record executives start with an ERP system and followed by Implementation of their chosen PLM system. This helps companies considerably in the way they approach the various challenges that will inevitably arise.

Many ERP / PLM analysts and vendor company executives are in agreement that aligning your data connections and synchronizing data is more difficult for companies when implementing a PLM system after its ERP system is already in place.

Therefore, electronics OEM and EMS executives take note, establishing your manufacturing process with an effective PLM system before integrating with a compatible ERP system will minimize waste and conversion costs as well as optimize the capabilities of each system across the board.

This sounds great for large corporations, but what about small and medium-sized provider; do they realize similar benefits by integrating PLM and ERP?

Small- to medium-sized contract electronics manufacturers can also reap the benefits of PLM and ERP integration. And with PLM and ERP in the cloud in manufacturing even more possibilities and potential exist.

It might seem obvious tying manufacturing operations with planning and order execution.

Dick Bourke, of Bourke Consulting Associates, agrees. Unifying PLM / ERP is one of the most critical integrations for a manufacturing company to implement. These two foundation systems – working together – are indispensable for total management of a product’s lifecycle.

Bourke concludes, “Remember that efficiency (do the right thing) is only one-half of the classic paradigms; the other is effective (do it [rightly]).”

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