Best Practices for Streamlining Processes across PLM and

Best Practices for Streamlining Processes across PLM and ERP Jean-Claude Niyonkuru June 2011

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary 2

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary 3

How PLM is Evolving Best of breed PLM’s are now enterprise systems Yesterday Today Design Strategy CRM Supplier Strategy PLM ERP HR SCM PLM Cost & Green Strategy Service Strategy Mfg. Strategy ERP Mfg. …. CRM © 2010 PTC HR 4

The Reality of Manufacturing Companies Is your PLM really integrated or connected to ERP? Pressures Market Pressures Pain Points / Challenges § Reach faster ramp-up, shorter development cycles and quicker time-to-market § Manage increased product variability and complexity § Manage and operate in a globalized supply chain § Improve operational > Resulting in…. efficiency and excellence – Inefficiencies § Meet cost – targets Higher cost § Achieve –first time quality at Delays reasonable cost – Errors § Disconnected engineering, manufacturing & production teams § Difficulty to find and re-use proven manufacturing processes and resources § Struggling to provide accurate manufacturing information to production on-time § Manual processes and tools § Disconnected legacy systems How should companies address these challenges? Integrate upstream and downstream process/data 6

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Understanding Enterprise Systems – Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary and looking forward 8

PLM and ERP coexistence challenge > Links together the critical up- and down-stream processes and data between classically disparate user groups working in different enterprise systems. > Bellow some typical processes/data that need to be integrated ERP PLM Requirements Capture and Management Configuration Management System Design Detailed Design Variant Design and Generation Manufacturing Process Management Change Management Production Scheduling Inventory Management Sourcing and Procurement Sales and Order Management Shipping Logistics Accounting and Financial Reporting 9

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary and looking forward 10

Overview of best practices for integrating PLM with ERP > Do a thorough business process analysis: – Understand what value that PLM brings to your company – Draw the line between PLM and ERP Process Analysis > Establish solution requirements – What, When and Where for the processes/data to be integrated > Have the Solution Designed – How to integrate PLM and ERP Solution Requirements Solution Design 11

PLM-ERP Integration Approach Overview System Requirements • constraints Business processes What • data elements Where • • Part, BOM, Document, Change, … PLM, ERP in which system(s) persisted or not When • Security, Performance, … triggering events Solution Requirements Cost Complexity Standards How • • • Transport (FTP, JMS, …) Data format (CSV, XML, …) Technology (ESI, ERP Connector, ESI Open API, customization) Release, Batch, … Solution Design 12

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary and looking forward 13

Key Enterprise Solutions Participating in Product Lifecycle PLM ERP MES Different business solutions, “built” differently, with different duration and complexity of events Product information-oriented Transaction-Oriented Event-Oriented Different data type and different users Cross-Enterprise, Cross-Functional (Engineering, Partners, Manufacturing Engineering, Marketing, …) Cross-Enterprise, Cross-Functional (Production, Financial, Procurement, HR, …) Internal – Shop Floor & Production Users 14

Windchill Product Development System Windchill PPMLink Windchill Requirements. Link Mathcad Creo and other MCAD Cadence, Mentor, Zuken Open Source, Rational Program Portfolio Management Requirements Management Engineering Calculations MCAD / CAM / CAE ECAD Embedded Software ERP, MES Financials SCM MRP Distributed Collaboration Business Reporting Communiti es of Practice Workflow Heterogeneous CAD Data Mgmt ECAD Data Management Enterprise Interoperability SAP, Oracle, …. ERP integration is part of Windchill PLM Document Managemen t Change & Config. Mgmt Service Information Manufacturin g Process Mgmt. Quality, Risk & Reliability Mgt. Arbortext Windchill MPMLink Relex Product Analytics Complete BOM Management Visualization Supplier Management Product Lifecycle Managemen t Component Management Windchill Product Analytics Supplier Management Parts. Link Digital Mockup Creo 16

PLM’s Impact on ROI PLM ERP Decision made here can Impact ~ up to 80% of product cost Intellectual assets e. BOM Decisions made here can Impact ~20% of product cost Integrate Physical assets MCAD EMB SW m. BOM Process Plans Services BOM Partners (design & mfg) Inventory tracking Compliance & analysis Inventory tracking Materials handling Forecasting Resources Cost of change to the product here = 100 X , 1000 X, + Cost of change to the product here = X MA-V 1 19

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary and looking forward 20

Key Applications Groups Range of Processes Covered What CAD How Where and When Process Design - Bridging the Gap - Product Design Production Planning Production Execution Processes Supporting applications PLM Solution Where? ? ERP Solution MES Solution Where should we draw the line between PLM and ERP/MES? How do we implement a business process across two value chains? 21

Complexity Makes a Difference 23

Drawing the line between PLM and Production Systems? > PLM is an environment built to support innovation and the rapidly changing information created during the development of products and processes …requires visual, digital, integral and associative capabilities What CAD Product Design How Where and When Process Design - Bridging the Gap - Production Planning Production Execution Transactional & Event-based Highly Collaborative Processes Supporting applications MPM in the Production Systems PLM Production Systems – ERP/MES Best Practice is to have MPM in the PLM System PLM Enabling Concurrent Product and Process Design Production Systems – ERP/MES 25

Right Processes in PLM benefits ERP Integrating Design and Manufacturing in PLM Benefits ERP > Improve Product and Process Development Effectiveness > Speed Time to Market, Change Cycles > Increase Rich Data Visibility Across Enterprise > Reduce Manufacturing Errors by ensuring that only valid data is in ERP or accessible from ERP. © 2007 PTC 27

Where processes should be mastered > It should be a best practice that all product and process development activities be mastered in PLM. – Most values – Less integration issues > Do workshops with all business stakeholders: find and use people who knows both worlds > Document all processes that will be integrated as first step Process Analysis Solution Requirements © 2007 PTC Solution Design 28

Simplified Subset of Enterprise Process Flow Change Management Define EBOM Define MBOM Create Operation: Illustrations, Animations, etc Define Process Plan Validate Work Instructions Allocate Parts and Resources Downstream Processes (Order Tools, etc) 29

Simplified Subset of Enterprise Process Flow: Fragmented/Not Integrated Change System PLM Change Management Define EBOM Manual Downstream Processes (Order Tools, etc) Define Process Plan ERP Define MBOM Manual Desktop Tools Define MBOM Define Process Plan Allocate Parts and Resources Create Operation: Illustrations, Animations, etc Validate Work Instructions 30

Simplified Subset of Enterprise Process Flow: Integrated processes between PLM to ERP Less Integrations, Streamlined Processes and Data Change Management PLM Define EBOM ERP Define MBOM Define Process Plan Allocate Parts and Resources Create Operation: Illustrations, Animations, etc Validate Work Instructions Downstream Processes (Order Tools, etc) Desktop Tools 31

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary and looking forward 32

Solution Requirements Overview Solution requirements management should follow the phases illustrated below System Identification Triggering Events Data Elements Data Mapping Data Persistence 33

Solution Requirements – System Identification Consolidate at minimum the number of enterprise systems that are needed ERP has consolidated: PLM is consolidating: – – – – – Financials Accounting Human resources Procurement Manufacturing resource planning Supply chain management Supplier relationship management Customer relationship management Project costing and accounting ERP PLM © 2007 PTC – CAD data management – Document management and workflow – Distributed collaboration – Visualization and markup – Product data and configuration management – Change management – Program Portfolio management – Component management – Supplier management – Product data and configuration management – Manufacturing process management – Service Information – Analysis – Quality management – Requirements Management 34

Solution Requirements – Triggering Events When >Describe the user or system events that drive the exchanges between the systems, and their related elements – User events • “The system shall publish the following objects when the user sets the lifecycle state of a part to […]: Part, BOM (parent and usage links), […]” • “The system shall provide the user with the ability to select a part, and execute an action that will publish the following objects: Part, BOM (parent and usage links), […]” • “The system shall provide the user with the ability to select a part, and view its current inventory levels per plant” – System events • “The system shall publish the following objects whenever a Change Notice reaches the lifecycle state […]: Change Notice, all resulting Parts, BOMs (parent and usage links), […]” > Define the availability requirements of the data elements – Define when the data needs to be exchanged • “The system shall complete publication of the objects to [ERP] within 2 minutes of the event” 35

Solution Requirements – Data Elements What >Identify the data elements (objects, relationships) exchanged between the two systems – Primarily identify data elements and shared fields that need to be represented in more than one system • This is based both on business process analysis and system requirements • First list all required ERP elements/fields • Then list the corresponding Windchill fields that are needed to populate the ERP fields Part Material Change Master Change Notice Number Description Name Reason for change Description Status BOM (Header) BOM (Components) BOM (Usage Links) Number Industry Sector Type Number Component Material Type End Item Usage Version Line Number Component Part Number Description Name Unit of measure Default Unit Version Plant(s) Target Plant(s) View Target Plant(s) Quantity Unit Line Number Quantity Unit Each column is translated into a requirement such as “The system shall extract the following [Element] fields: […]” 38

Solution Requirements – Data Persistence Where >Based on the previous guidelines, extend the mapping table with So. R Persisted Part Operations Number CR Persisted System of Record X PLM Material Operations Number R X Industry Sector CR X ERP Material Type R X ERP End Item CRU X PLM Type CRU X PLM Description R X Name CRU X PLM Unit of measure R X Default Unit CRU X PLM Version R X Version CRU X PLM Plant(s) R X Target Plant(s) CRU X PLM Internal Comment R X Creator CRU X PLM Procurement Type RU X Source CRU X ERP Cost CRU X Standard Cost R Effectivity (Actual) RU X Effectivity (Planned) CRU ERP X ERP – Some known exceptions to the So. R “rules” are acceptable • “Source” (make/buy): the next Windchill version should be updated with the correct value • Effectivity: Windchill is the source, but ERP the So. R 46

System Requirements System >Describe the requirements that are related to how the system itself should work – System performance requirements • Publication should be an asynchronous (background) task which does not affect user interaction – Transactional requirements • For any interaction that requires a “delta” to be published, results must be returned to Windchill • The system should have a “closed loop” for failure handling and retries • If data validations need to occur, they should be before or during the triggering events • Describe he sequence of events that occur in the case of failures (demote, etc. ) – Security requirements • Publication of the data should never expose it to unauthorized users – Standards compliance – Technological constraints • Legacy systems (flat file, …) • Use of specific tools (customer middleware, …) These system requirements will constrain the available options during solution design 47

Where data should be mastered > It should be a best practice that product and process development data be managed in PLM > Only one system masters one type of data at a particular time of a product lifecycle. > Workshop should be conducted to define data mapping and persistence as well as triggers > Document all mappings Process Analysis Solution Requirements © 2007 PTC Solution Design 48

Data Flow Windchill Change Notice Part Document EBOM MBOM ESI, ERP Connector, or Partner Solutions ERP Change Master Material/Item Document BOM Work Center Process Plan Routing Sequence Operation Tooling Process Material Skill Work Instruction Document 49

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary 50

Windchill Enterprise Systems Integration > Integral Module PDMLink of Windchill > It should be a best practice to use full ESI – Close Loop – Error and Transaction Management – Low Upgrade Costs > Ensures information synchronization with downstream manufacturing systems such as ERP – Flexible configuration allows release of all pertinent business objects – Bi-directional framework – Reliable closed-loop transaction management – Advanced administrative tools – Efficient user model > Turnkey solution for SAP and Oracle Apps > Simplified implementation for other ERP systems Built on powerful, reliable middleware technology Open, standards-based architecture for use with other EAI vendors 52

Windchill Native Multi-ERP Architecture Windchill (PTC’s ESI Business Logic) Q Q PE 1 Custom Integration Email, FTP, File, SOAP, JMS, etc Q Q PE 2 JMS T T Adp 1 Process Engine 2 Suite Process Definitions (PTC’s ESI Business Logic) T ERP 1 (SAP/OM) T Adp 2 ERP-Specific Adapter 2 Open API ERP Connector ESI Services 1 Other EAI Integration ERP-Specific Adapter 1 Process Engine 1 Suite Process Definitions Info Engine ERP 2 (SAP/OM) © 2009 PTC © 2008 PTC 53

Agenda > Introduction – Process Overview – Challenge > Best Practice – Overview – Process Analysis: • Understanding Enterprise Systems • Where to draw the line between PLM and ERP – System Requirements – Solution Design > Summary 54

PLM and ERP: The Value Scorecard By Coupling PLM and ERP using best practices, Manufacturers Can; – See Key Information Throughout the Product’s Lifecycle – Bridge the Data Gap Between Engineering and Manufacturing – Leverage Rich BOM and Routing to Enhance Downstream Systems and Processes – Seamlessly Manage Change Impact and Save Costs MA-V 1 55