Multiple PLMs-ERPs Integration: Key Challenges and Best Practices

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1 Multiple PLMs-ERPs Integration: Key Challenges and Best Practices For global manufacturing giants, inorganic growth is the accepted norm today. Consequently, every merger or acquisition contributing to this inorganic growth has resulted in increasingly complex system and infrastructure scenarios and challenges. Organizations are under constant pressure to launch new and innovative products. This has resulted in the need for an agile integration between PLM and ERP systems for competitive advantage. This paper introduces the need for such a PLM ERP integration and discusses how the technology landscape for PLM-ERP Integration has evolved over the last few years. Further, it explains the key challenges and best practices pertaining to a PLM ERP integration based on both business and the technology point of view.

2 About the Author Ajay Kumar Ajay Kumar has more than 7 years of IT experience with TCS and has been instrumental in implementing several J2EE-based solutions in the Engineering and Manufacturing Domain. With more than seven years of experience in PDM ERP Integration, Ajay has acquired sufficient knowledge of ematrix (Oracle-based PLM tool), Agile (PLM Tool), and Oracle Inventory and Manufacturing modules. He has been associated with several successful SOA implementation projects in the engineering and manufacturing domain and has served various healthcare and telecommunications majors. 1

3 Table of Contents 1. Introduction 3 2. Need for PDM - ERP Integration 4 3. Integration Technology Landscape 4 4. Key Challenges 7 5. Best Practices 9 6. Summary/Conclusion Acknowledgements References 11 2

4 Introduction Product Lifecycle Management (PLM), a paradigm in product manufacturing, enables a company to effectively manage its products across various stages of their lifecycle. It helps companies reduce their products time-to-market, provide better support for their use, and manage their end-of-life better. An ERP system ensures that a company realizes a quality product that is aligned to customers demands in a timely, cost-controlled manner. An ERP system focuses on the physical, transaction-oriented business processes and deliverable assets and addresses production planning and scheduling, inventory management, costs, and other physical aspects of production. Data Exchange Typically, the flow of engineering-related data is directed from PLM systems to ERP systems, whereas cost-related data is accessed (view-only) by the PLM system from the ERP systems. This provides the design engineer with the required information pertaining to the components that can be used. Part-related-attribute data [part number, revision, unit of measure, compliance-related attributes such as W18 and WEE-ROHS] and bill of materials are sent to the ERP system. A view-only access to this information can be made available to the PDM application using which business users can compare the data between the two systems to make judicious decisions. Occasionally, manufacturer-related information is also transacted between PDM/ERP systems. In such cases, either the PDM or the ERP system is assigned ownership of the information. 3

5 Need for PDM ERP Integration With global distribution of today s enterprises on the rise, cross design, cross manufacturing, and cross selling have been driving the need for implementing a suitable interface between PLM and ERP systems. It is possible for an enterprise to set-up manufacturing operations in several countries in which case information reuse becomes the key for arriving at prudent business decisions and achieving competitive advantage. Although SMEs typically implement solutions comprising a single PLM and a single ERP system, larger corporations have implemented multiple PLM and ERP systems acquired over a period. While some of these large organizations may decide not to integrate these systems, some others have chosen to implement an approach of consolidation using in-house or proprietary integration tools. Integrating the PLM and ERP systems across the enterprise can help realize several advantages. Listed below are some of the key benefits of an ERP PLM integration as mentioned in a CIM Data report1. A 75% reduction in terms of time, cost, and efforts associated with re-keys data entry from one system to the other. A 75% reduction in the BOM-error cost, since BOMs are created only once and then managed consistently across both the PLM and ERP systems. A 15% reduction in inventory cost, since designers and engineers are aware of which components are already on hand. An 8% reduction in scrap generated. Integration Technology Landscape The evolution of PDM ERP integration technologies has been similar to the manner in which the Enterprise Application Integration (EAI) technology has matured over the past few years. Described below are the various stages in which the technology landscape surrounding a PDM ERP integration has evolved. 10 Years Ago Tight Integration (Point-to-Point) Previously, organizations implemented several point-to-point integrations; in the event of a merger/acquisition, these integrations required extensive rework before they could accommodate the new systems. The apparent disadvantages of such a point-to-point integration mechanism necessitated the need for middleware solutions that helped in avoiding the need for rebuilding interfaces. 4

6 Tightly Coupled PLM-ERP Integration Multiple PLMs-ERPs Integration: Key Challenges and Best Practices ERP 2 PDM 2 Interface/ Staging area Base Tables Point to Point Vendor Tool or In-house development Integration Hard System dependency Replication of tool/technology Batch / Real Time ERP 2 PDM 2 Interface/ Staging area Base Tables Batch / Real Time 5 Years Ago Decoupled Integration (Middleware) Middleware systems addressed the problems that surfaced in point-to-point integration. They were successful in reducing the inter-dependency among various systems. Decoupled PLM-ERP Integration EAI 1 ERP 2 PDM 2 Interface/ Staging area Base Tables Decoupled Integration (EAI) EAI or Vendor tools to promote decoupling Reduced System dependency Lack of common integration standard Batch / Real Time ERP 2 PDM 2 Interface/ Staging area Base Tables EAI 2 / Proprietary Tool Batch / Real Time 5

7 However, there was an increase in the number of EAI solutions deployed within an enterprise. Since these EAI systems were based on proprietary vendor solutions, there arose the issue of migration of an EAI system across solutions provided by different vendors. This issue presented the need for an open-source based solution. Recent Trend: SOA/Distributed Architecture (M&A) As sizes of companies grew on account of various mergers and acquisitions, it resulted in the existence/deployment of heterogeneous breed of PLMs and ERPs systems within a single enterprise. In order to establish greater control over transactions performed across various systems, there arose the need for a common integration standard that was not based on proprietary tools or technologies. This need was addressed by the emergence of SOA solutions. Even as the SOA-based implementation strategy matures, it has paved the way for an increasingly optimal integration between systems that are based on different technologies. Multiple PLM-ERP Integration Role of Middleware Content based routing Data Transformation High Volume Transaction PDM 1 PDM 2 1 Workflow/Event Based Data Extraction & web service call call 2 result 6 S E R V I C E L A Y E R M I D D L E W A R E 3 5 Interface/ Staging area ERP 1 4 Batch / Real Time ERP 2 Base Tables PDM 3 Interface/ Staging area 4 Base Tables Batch / Real Time Innovations and solutions based on open standards are believed to drive the next generation of integration systems and PDM ERP integration is no exception. Innovation is desired if a faster, decoupled, foolproof, and efficient data exchange between systems is to be realized. For example, consider the scenario in which the BPM will be able to rapidly prototype a solution, and enhance it as per business needs without having to make any changes to the underlying implementation. 6

8 Key Challenges Listed below are some of the challenges pertaining to the evolution of the PDM ERP integration technology. Business and Organizational From the business and organizational perspective, the following factors impact the strategy that is applied to systems integration. Mergers and Acquisitions When a business weathers several M&As, it is very likely that it will have to choose between several solutions for PLM and ERP needs. These solutions can be based on different platforms and vendor solutions. PDM ERP integration strategy should involve a long-term business vision and appropriate technology selection should be made to onboard any new integration need. Geographical Distribution (Time Zone) Even as business growth results in geographic distribution, it poses different challenges such as time zone issues, which should be addressed early into integration development phase. Integration should allow for flexible configuration corresponding to various time zones without affecting the existing or new systems. Language, currency, and unit of measure are properties of a product that can differ across geographical boundaries. It is advisable to implement such an integration tool/technology that can support such properties across geographies. Distributed vs. Centralized Some businesses may be keen on implementing centralized operations in ERP, where as some others may desire a region-wise distribution of ERPs. In both the above scenarios, the integration development plan should be scalable and should be sufficiently flexible to accommodate any systems and data migration plans in the future. Identifying master system of records and governance As discussed above, engineering design is driven using PDM systems, whereas ERP systems are responsible for manufacturing-related functions. Appropriate access controls should be laid out within the PDMs as well the ERPs. If data is modified in both systems, then it poses technical issues that may affect seamless data exchange. Information redundancy Efforts should be made to avoid information redundancy across different PLM and ERP systems. Identifying a common repository solution (for example, Part Numbering) that maintains a metadata index for each of the PLM and ERPs systems can be referred to as a single point of data validation. 7

9 Technology Proprietary Solutions vs. Open Standards A proprietary solution can assist in rapid deployment of the integration. There could arise certain unexpected issues under the following situations. The organization shifts from one PLM solution to another PLM or ERP system based on different technologies is included in the application portfolio as a result of a fresh merger/acquisition, and the vendor does not extend support to the integration? A solution based on open standards such as XML, Web Services, or common object model is the preferred choice in such scenarios. Synchronous vs. Asynchronous Integration mode The synchronous mode of operation can be performance sensitive and can potentially block any other user operation in the PDM system. An asynchronous mode of operation should provide the right feedback after the process is completed in the background. System-intensive transactions (for example, Multi-level Bill of Material transactions) should be handled using the asynchronous operation mode. Direction of integration (Uni vs. bi directional) In most instances of implementation, data is transferred from PLMs to ERPs, and a view-only access to the data is available in the PDM system. Integration tools must be evaluated for uni/bi-directional information exchange. Supported vs. Unsupported Features (System upgrade) It has been observed that implementing the latest versions in ERP and PLM system support is advantageous, although upgrading either of the systems can prove to be a challenge. Since system upgrades should not hamper integration functions, sufficient vendor support is desired during platform up gradation. Trained Resources Similar to any other integration development plan, engaging skilled and trained resources with the domain knowledge of both PLMs and ERPs helps avoid several common issues. 8

10 Best Practices Based on the successful implementation instances of PDM ERP integration for clients such GE, Motorola, and Cummins (POC in progress), listed below are some of the best practices that can be applied to avoid common pitfalls. Loose Coupling To avoid dependency of systems on each other, the design of the PLM ERP integration should be based on loose coupling. This will help avoid any issues that may result from the unavailability of one of the systems because of an unexpected shutdown or maintenance. Current EAI solutions or SOA-based designs promote loose coupling between systems. Vendor solutions for integration should make use of these scalable and flexible solutions. Open Standards Integration solutions based open-source standards such as XML and ebxml can be reused across multiple applications and can be designed to accommodate further extensions. EAI Solution An ESB solution, as part of an SOA implementation on a common enterprise-wide platform can be used to host a webservices-based integration solution. ESB solutions are also provided with EAI software. An EAI solution can be used as the integration technology for content-based routing, data transformation to multiple format/protocols, Open Ended (Easy Extension) The design of a PLM ERP integration solution should take into account future needs and accommodate extensions in terms for scalability (horizontal and vertical) in addition to new systems without affecting the existing system. Example: A manufacturing company acquires another company that has its own integrated PDM ERP systems. Such a scenario presents the following two options. 1. Decommissioning the new systems. This approach is adopted if the data volumes and user base of the acquired company are not significant compared with those of the existing system. It involves migrating the data to existing PLMs and ERPs. 2. Integrating the new PLM and ERP systems with the existing integration solution. If the user base and data volumes in the new PLM & ERP systems are sufficiently sizeable, it is desirable to carry out an evaluation of integration technologies implemented in the two systems. Implementing a single integration solution based on SOA standards can help bring down costs related to license, development, and maintenance. In both the scenarios described above, the integration design should be capable of handing the load through various measures such as clustering, load balancing approach, and so on. 9

11 Optimal Testing Testing assumes importance since any change incorporated in one of the systems can impact two critical systems. Listed below are the two types of testing that can be adopted for testing the systems optimally. Validation Testing: This type of rapid testing can be carried out using scripts and automated tools by generating dummy data in the PDM and transferring it to the ERP. System Integration/Regression Testing: This type of testing is carried out as part of user testing and other testing cycles generally followed within an organization. The scripts used for validation testing can be reused in the event that one of the systems needs to be upgraded or a vendor patch needs to be incorporated to resolve system issue. Mass Data Transfer Solution One of the requirements for a PLM ERP integration solution is to provide a functionality for mass data transfer from the PLM to the ERP system. This could be applicable to a one-time load of data or a recurring solution for any new systems that may need to be included because of the M&A. Compliance requirements also drive the need for this solution. There could be situations where a particular attribute across several parts/components will need to be transferred to the ERP system. This solution should be made available to consumer to supply multiple formats of data such as text, excel sheet, or XML. PDM Work Flow/Event based Data Extraction PDM ERP 1 Integration Framework Manual Input GUI or Command Line Invocation Interface for Data File (txt, xml, and xls) ERP 2 10

12 Summary/Conclusion This paper was aimed at providing a broad perspective of systems integration between Multiple PLMs-ERPs in the enterprise context. It has covered the evolution in the landscape of PDM-ERP technology and the manner in which it has matured over last few years. It sought to articulate the best practices and key challenges pertaining to the implementation of a PDM ERP integration. It also highlighted the importance of business, organizational, and technical considerations in ensuring the success of the integration. Acknowledgements My sincere thanks are due to Mr. Swaminathan Nadarajan (Project Manager, TCS) and Mr. Daniel Manohar (Integration Analyst, TCS) for their valuable inputs. I would also like to thank TCS management for their encouragement. References [1] CIM Data Report: Business Efficiency and Value of PDM-ERP Integration, [2] [3] Thilloy, Cyrille, SOA In The Enterprise, 11

13 About TCS Engineering and Industrial Services Engineering and Industrial Services (EIS) is a strategic business unit of TCS that offers a wide spectrum of engineering services and solutions, covering new product development, product lifecycle management, plant solutions and geospatial technology solutions. These services & solutions cater to different industry verticals such as Aerospace & Defense, Automotive, Hi Tech, Telecom, Energy & Utilities, Government, Industrial Machinery and Medical Devices. About Tata Consultancy Services (TCS) Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery TM Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India s largest industrial conglomerate, TCS has over 143,000 of the world's best trained IT consultants in 42 countries. The company generated consolidated revenues of US $6 billion for fiscal year ended 31 March 2009 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at corporate.engineering@tcs.com TCS Design Services M 0609 Subscribe to TCS White Papers TCS.com RSS: Feedburner: All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / Information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2009 Tata Consultancy Services Limited