Enterprise resource planning Product life-cycle management Information systems in industry ELEC-E8113

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1 Enterprise resource planning Product life-cycle management Information systems in industry ELEC-E8113

2 Contents Enterprise resource planning (ERP) Product data management (PDM) Product lifecycle management (PLM) Rationale of the lecture: ERP and PDM/PLM are not our focus. However, there is data transfer between them and MOM. That is why we need to know them.

3 From introduction lecture Enterprise resource planning (ERP) is a very essential information system in almost any industrial company. It is used for management of business and logistic operations including production at enterprise level. Product life-cycle management (PLM) refers to information systems used for management of information about products during all stages of their life-cycle including e.g. design, production and maintenance. 3

4 Enterprise Resource Planning Enterprise resource planning means planning, performing or coordinating and monitoring of the core business processes of a manufacturing enterprise, and management and communication of information about it ERP is located at the level 4 in the ISA-95 model ERP contains both logistic and business activities ERP may refer either to the business processes or the information system supporting them 4

5 Functionality of ERP ERP is often divided into modules according to different supported business process The modules share a database representing status information of the enterprise Core logistical modules include inbound and outbound logistic, and production planning Core business modules include accounting and controlling 5

6 Process of ERP Modules communicate with each other and update status information of the enterprise consistently In this way both logistic and business viewpoints are taken into account 6

7 Example: order delivery process The process starts with sales forecasting and processing of orders Production planning involves material requirements planning and master scheduling Orders are released to SFC (i.e. MES) and feedback monitored The process ends with shipping, delivery and billing 7

8 Data of ERP The database of an ERP contains various data, including: Organizational data: customers, suppliers, production sites, etc. Product data: products, material and capacity requirements of products, product inventory, product shipments, etc. Material data: materials, material inventory, material shipments, etc. Resource data: resource groups, capacity, availability, also human resources, etc. Demand forecast, production plan and performance, possibly also other types of plans e.g. maintenance Business information for accounting and controlling Performance indicators 8

9 Different types of ERP Global ERP, i.e. just one ERP in the enterprise, is not the only option in practice Partial centralization either with respect to location or function is not uncommon 9

10 ERP system architecture ERP is a database-oriented server application with multiple user groups 3-tier system architecture is common Thin user interface containing just presentation, e.g. web browser Application server containing application logic of various modules Database server providing common data storage User interface - presentation Application server - modules Database server - shared data 10

11 Other systems ERP is not necessarily the only information system for enterprise activities Customer relationship management (CRM) Supplier relationship management (SRM) Supply chain management (SCM) Product lifecycle management (PLM) Integration server 11

12 Example from reality In practice the combination of information systems in an enterprise varies considerably depending on type of industry and individual companies The example describes typical information systems in Finnish paper & pulp industry The situation in real companies is even more complex 12

13 ERP and horizontal integration ERP is often used for horizontal integration in a supply chain Typical example is transfer of purchase orders and confirmations between buyers and sellers In addition to ERP systems integration servers and common model for messages are needed 13

14 ERP and vertical integration ERP typically has a central role in internal vertical integration within enterprises The example illustrates the principle of integration for order delivery process in two Finnish paper & pulp companies Detailed scheduling in this example is specific to this particular industry to the nature of the production process 14

15 ERP and business development Intended benefits of ERP include Faster and more efficient operation, and decreased unproductive work More precise and more real time information about the status of the enterprise Unification of the operations of the enterprise, e.g. through so-called best practices Potential issues with ERP High cost of commissioning e.g. due delays in the project High cost of making changes afterwards Issues with usability Objectives are not necessarily met, evaluation of results is difficult Vendor lock-in 15

16 Products The concept product has multiple meanings, be careful which one you are talking about Possible meanings: Result of an industrial production process Product model (or type) that needs configuration before it can be produced Product configuration that could be produced Product individual that has been produced 16

17 Product data management PDM and PLM are both data management activities that store and deliver product data to other activities of an enterprise Both can refer either to activities or supporting information systems PDM has narrower scope, typically product design Usually PDM and PLM are currently performed within enterprises 17

18 Product data Any data related to products Data in databases Electronic documents, e.g. specifications, manuals, CAD models, NC programs, simulation models, etc. Paper documents Data from any phase of product lifecycle of: Product types including product development, subcontracting, commissioning, usage, condition monitoring, maintenance, revisions, disposal Product individuals including the same phases for each separate individual product 18

19 Items The basis for managing product data Item is an element that is repeatedly referred to, e.g. product, part, material, document, etc. Items are different in separate companies Item classifications are typically compromises between different users Identification, a string, given systematically, may be classifying Description as human readable text Classification to hierarchies Revisions and variants Status Suppliers and manufacturers Other data, possibly >

20 Structures and documents Product consists of parts that, again, consist of parts that are made of materials Hierarchical and recursive data structure with has part and made of relations There several structural views a product: How it is designed How it works or is controlled How it is to be produced What materials it consist of Documents may consist of other documents Typically a document item is stored to database with a link to the actual content From the data management viewpoint documents are nonstructured data 20

21 Versions and statuses Items can have different versions that may be either revisions or variants A revision replaces the original one whereas variant does not Items have lifecycles with different statuses during it The statuses control the utilization of items in different activities, e.g. accepted to production 21

22 PDM system architecture PDM systems are data management systems that combine product data stored both in a database and documents Items and structures are stored into a database Documents are typically stored elsewhere User groups can have different access rights 22

23 Product data models A few specifications or standards have been developed for modeling selected aspects of product data in different industries. Actual adoption of these specifications varies. Examples: ISO 1303, STEP - Standard for the Exchange of Product model data, a broad standard for representing structure and geometry of products particularly in machine building industry ISO 13584, PLIB - Parts Library, a standard for describing technical components ISO 15926, Integration of life-cycle data for process plants including oil and gas production facilities, a standard for describing equipment and process plants in oil industry 23

24 PDM and business development Intended benefits of PDM include Faster access and delivery of product data within an enterprise leading to decreased number of errors and less unproductive work Better updated information about products in the enterprise Particularly faster product design through concurrent work and efficient reuse of existing product data Better management of changes in product data Potential issues with PDM Large number of items, complexity of product structures Product data management in an enterprise network 24

25 Product lifecycle services Product lifecycle services are an important motivation for PLM Product lifecycle services include services of equipment vendor for several stages of product usage: Commissioning, e.g. installation, training, start-up Usage, e.g. condition monitoring, fault diagnostic, maintenance, performance monitoring Changes, e.g. extension, modernization, relocation, disposal, recycling Although many of these activities utilize product data they also require other types of data PLM is not necessarily enough for these activities. ERP support for services is needed 25

26 Example A group of equipment, automation and IT vendors are delivering their systems to an industrial company Product data is managed within the vendors, communicated between them and to the customer The customer manages part of the product data as resource data 26

27 Example In order to facilitate their operations the vendors are developing their PLM operations both as individual companies and as a group They are trying to take the steps illustrated beside 27

28 References Sheldon, D. H. Class A ERP Implementation: Integrating Lean and Six Sigma, J. Ross Publishing, Sääksvuori, A., Immonen, A. Product Lifecycle Management, Springer,

29 Homework One question about MES based on a selected text Deadline Answers to 29

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