Most consumer goods companies need both Product Lifecycle Management (PLM) and Enterprise Resource Planning (ERP) systems to run their businesses. PLM is used for design of the product while ERP is used for execution on that product. Some try to combine these two worlds into one offering, but mostly fail since they end up sacrificing what makes them really work for the sake of finding a common ground.
In consumer goods companies, PLM is used by creative people that need a flexible and collaborative environment complimented by configurable milestone management tools. ERP is used by operational people that need a reliable, scalable and integrated environment that can handle high volume transactions in a standardized structured form. Thus, keeping these two worlds separate is a better option, since they are in the opposite ends of the application architecture. The real question is then, given both applications manage the product data, how should they talk to each other? Where should we draw the line between PLM and ERP?
Here is a starting point for consumer goods companies. First, evaluate all your product offerings across your channels and regions. Look at which ones are being designed by you (thus your brand) and which ones are designed by others (thus 3rd party products). The ones that you design should start their lifecycle in the PLM while the ones you don’t can go directly into the ERP skipping the PLM cycle. Once the master application is determined, it should be kept as the master going forward. This is especially important to avoid dual sided complex interfaces. For example, let’s say you create a new style with multiple colors in your PLM and push the product data to your ERP. When you need to make a change on a color offering later (introduce a new color, drop a color, extend a color across seasons, etc.), you should make those changes first in your PLM and then push the data to your ERP.
Note that this does not necessarily mean that all product data (attributes, hierarchies, assortments, etc.) should be maintained in one system. An intelligent design will keep a single system as the master, while letting other systems append it with additional data elements such as attributes. For example, you don’t need to maintain e-commerce specific product attribution in your PLM.
Moreover, a typical PLM and ERP interface needs to consider more than the product data itself. How about the reference data like unit of measures, seasons, currencies, vendors, etc? Such reference data needs to be laid down as a foundation first for the product data to flow across the applications smoothly. Finally, so far we talked about the reference and product data. How about more complex data flows between PLM and ERP such as BOMs, routes or even purchase orders? Well, that is for another posting.