It is important for all manufacturers that have implemented ERP and PLM systems to build connections between the two software applications. For engineer-to-order (ETO) manufacturers (who design and manufacture products to the specific needs of the customer), the connection between ERP and PLM is even more important due to the specificity of the ETO sector.
Facilitating Engineering Changes
For ETO manufacturers, the probability of product and process changes is high. During the time between receiving customer requirements and delivering final products, changes happen (whether the customer modifies their requirements; design modifications are requested by the shop floor; or issues on the supplier's side result in using alternative parts). Quite often, a change initiated in one system (either ERP or PLM) will have a consequence in the other. For ETO manufacturers, the capability of efficiently capturing change requests and implementing change actions throughout the entire value chain (customer, manufacturer, and supplier) in a synchronized manner is one of the key success factors.
Reducing Rework and Scrap
Every manufacturer wants to reduce rework and scrap but ETO manufacturers dislike these costly activities more than the average manufacturer. In the ETO sector, the quantity of each product is usually small—unlike mass production manufacturing. This manufacturing process allows for a certain percentage of rework and scrap and costs are allocated to finished products without significant increase on unit price. For ETO companies to avoid catastrophic wastes in manufacturing processes, they have to make sure that the design department knows what can be made on the shop floor and that the production side always works on the up-to-date design specifications that reflect correct customer requirements.
Meeting Delivery Time
One of the major responsibilities that product/project managers at ETO manufacturers have is to ensure that the product can be delivered on time. Although one delivery delay may result in only one unhappy customer, for some ETO manufacturers, this customer may mean their entire business. The need to oversee both the development and production processes for every product poses a challenge for managers in the ETO sector. . The collaboration between product development and production is even more challenging since the two processes are mainly handled by two different information systems—PLM and ERP, respectively. Unless the two systems can talk to each other consistently, the collaboration won't be effective and efficient.
Providing High-quality After-sales Services
For many ETO manufacturers, after-sales services are not only obligations attached to the product but also an important revenue source. High-quality after-sales services rely on accurate product definition information (usually maintained in PLM systems), traceable service activities (which more likely reside in transactional systems such as ERP), and a convenient reference between the two sides. The entire perception of after-sales services is based on the experience dealing with the product provider as a single entity regardless if customers have access to ETO manufacturers' systems or have to interact using traditional communication means. That being said, ERP and PLM systems have to work as if they are a single system. For more discussion on the integration between PLM and ERP-like systems for service purposes, please read the blog post What Keeps EAM/CMMS Away From PLM.
Facilitating Engineering Changes
For ETO manufacturers, the probability of product and process changes is high. During the time between receiving customer requirements and delivering final products, changes happen (whether the customer modifies their requirements; design modifications are requested by the shop floor; or issues on the supplier's side result in using alternative parts). Quite often, a change initiated in one system (either ERP or PLM) will have a consequence in the other. For ETO manufacturers, the capability of efficiently capturing change requests and implementing change actions throughout the entire value chain (customer, manufacturer, and supplier) in a synchronized manner is one of the key success factors.
Reducing Rework and Scrap
Every manufacturer wants to reduce rework and scrap but ETO manufacturers dislike these costly activities more than the average manufacturer. In the ETO sector, the quantity of each product is usually small—unlike mass production manufacturing. This manufacturing process allows for a certain percentage of rework and scrap and costs are allocated to finished products without significant increase on unit price. For ETO companies to avoid catastrophic wastes in manufacturing processes, they have to make sure that the design department knows what can be made on the shop floor and that the production side always works on the up-to-date design specifications that reflect correct customer requirements.
Meeting Delivery Time
One of the major responsibilities that product/project managers at ETO manufacturers have is to ensure that the product can be delivered on time. Although one delivery delay may result in only one unhappy customer, for some ETO manufacturers, this customer may mean their entire business. The need to oversee both the development and production processes for every product poses a challenge for managers in the ETO sector. . The collaboration between product development and production is even more challenging since the two processes are mainly handled by two different information systems—PLM and ERP, respectively. Unless the two systems can talk to each other consistently, the collaboration won't be effective and efficient.
Providing High-quality After-sales Services
For many ETO manufacturers, after-sales services are not only obligations attached to the product but also an important revenue source. High-quality after-sales services rely on accurate product definition information (usually maintained in PLM systems), traceable service activities (which more likely reside in transactional systems such as ERP), and a convenient reference between the two sides. The entire perception of after-sales services is based on the experience dealing with the product provider as a single entity regardless if customers have access to ETO manufacturers' systems or have to interact using traditional communication means. That being said, ERP and PLM systems have to work as if they are a single system. For more discussion on the integration between PLM and ERP-like systems for service purposes, please read the blog post What Keeps EAM/CMMS Away From PLM.
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