PLM, ERP and CAD -- The Changing Landscape of Intellectual Asset Management

editor's note: In breaking news on Friday, June 6, Oracle Corporation launched a $5.1 billion hostile cash takeover bid to acquire PeopleSoft for $16 a share. This move would, in effect, leave just the two major ERP vendors -- Oracle and SAP -- to compete for market leadership in this sector. Why is this important to the CAD community? Because like EDS-PLM Solutions and IBM/Dassault Systemes, both Oracle and SAP are watching the PLM marketplace closely, too. For additional details concerning the Oracle announcement, see CBS Marketwatch article, " PeopleSoft Rallies on Oracle Bid."

PLM, ERP and CAD -- The Changing Landscape of Intellectual Asset Management

by Amy A. Rowell

PLM (Product Lifecycle Management), PDM (Product Data Management), ERP (Enterprise Resource Planning), SCM (Supply Chain Management) and CRM (Customer Relationship Management) -- IT managers have heard it all, and sorting through the hype is as much a part of the job as actually implementing these technologies within their companies. Because of the confusion that often results, terms like these have earned a place in TechWeb's TechEncyclopedia.

Why is this worth noting? Because like any expression that warrants inclusion in the latest edition of any dictionary, it implies that the most recent addition to this list, PLM, has arrived, and that it is a "generally-accepted" acronym and conceptual framework. In fact, as definitions go, TechEncyclopedia has defined PLM -- and its components -- quite simply as "a comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement" and goes on to distinguish between PDM and PLM. Perhaps equally important is the notion that CAD is included in a discussion of PLM, but only as a single component -- one of several different types of authoring tools. (see Figure 1).

Results Found for: PLM


(Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design stages, manufacturing, product launch, distribution, quality assurance, in-service maintenance and spare parts provisions.

The terms PLM and PDM (product data management) are sometimes used interchangeably; however, PDM is typically only the data handling component of PLM. PLM also interfaces to the CRM and ERP systems within a company, which support the customer relationships, supply chain management and accounting. Following are the primary elements of a PLM system, all of which must interrelate with each other in order to provide the integration necessary to be a PLM system.

Requirements Management
Used throughout creation, manufacturing and distribution. Keeps track of total costs ("cost rollup") and manages constraints (if one part is changed, what are effects on others). Also provides collaboration and feedback.

Product Data Management
Manages data in all phases and interrelationships between all databases (see PDM).

Configuration Management
Provides sophisticated change control for as-designed, as-manufactured and as-serviced product structure databases. Shows interrelationships between data; for example, if a part has to be replaced in a product years later, it can locate original requirements.

Program and Project Management
Program management provides the overall schedule for building multiple products, while project management provides the individual timelines for each team building a part.

Authoring Tools
CAD (computer-aided design), CAM (computer-aided manufacturing), CAE (computer-aided engineering) and process planning applications.

Figure 1. Search results for the term PLM, using TechWeb.s TechEncyclopedia.

It's also interesting to note that, according to TechWeb, ERP, or Enterprise Resource Planning, is defined as "an integrated information system that serves all departments within an enterprise." The TechEncyclopedia goes on to explain that, "an ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources, [and that] the major ERP vendors are SAP, PeopleSoft, Oracle, Baan and J.D. Edwards."

Last week, PeopleSoft announced its intention to acquire J.D. Edwards, Oracle Corporation launched a $5.1 billion hostile cash takeover bid to acquire PeopleSoft, and Invensys PLC announced its intent to sell Baan. (See PeopleSoft to buy J.D. Edwards for $1.7 billion [02 Jun 2003] and Baan Announces Sale to Investment Group [03 Jun 2003].)

In short, the list of key players in the ERP sector is shrinking -- with SAP and Oracle now in a race for the top spot. And some suggest that it is just a matter of time before these companies begin shopping around for a best-of-breed CAD component to complete their product portfolios.

The underlying message here? The role of CAD within the product development organization continues to evolve -- with the CAD model increasingly being recognized as not only a graphical representation of the data, but an integral part of next generation ERP systems, PLM initiatives and more.

CAD. Several years ago, the greatest challenge was how to move users from 2D to 3D. Now, it seems, the challenge is how to successfully integrate CAD/CAM and CAE tools with ERP systems, CRM systems, and the like.

And consider PLM. PLM is supposed to effectively take care of all of these connections. But does it? Or will it?

And where does ERP software like SAP and Oracle fit in this rapidly changing landscape of "intellectual asset" management? In terms of blending CAD and ERP, for example, is a marriage between the likes of Oracle and Autodesk, or Oracle and PTC a possibility?

These are just a few of the pieces of what I like to call the PLM/ERP puzzle. Have you figured it out yet?

Comments? Feedback? Email Contact to tell us what you think about this topic or if you have additional information you'd like to share on this subject!

Amy Rowell is the managing editor of MCADCafe, and the editor of MCAD Weekly Review.

See also:

There's a New App in Town PLM aims to streamline product development and boost innovation in manufacturing. But it won't be easy or cheap. Here's what CIOs need to do about this latest buzzword technology. CIO Magazine, 15 May 2003.

Product Life-Cycle Management IT Services Market to Grow 26% to Reach $9.7 Billion in 2007, IDC Reveals The product life-cycle management (PLM) IT services market will expand from $3 billion in 2002 to $9.7 billion in 2007, representing a five-year compound annual growth rate (CAGR) of 26.1%, a new research study from IDC reveals.

CIMdata PLM Conference June 23-25, 2003. Detroit, MI. "Unleashing the Value of Your Intellectual Assets." At PLMconference2003, attendees will be provided with a total view of the PLM picture including an industry vision, available opportunities, strategies for solution selection and implementation, roadmaps to move forward, pitfalls to avoid, and direction to help maximize the value and benefits of their investment.

PLM Market Requires Best-of-Breed and ERP Capabilities Best-of-breed and enterprise resource planning vendors share space on the Product Life Cycle Management Magic Quadrant for 1Q03. PLM overlap is increasing, but neither vendor type is capable of fulfilling all users' PLM needs. 3/31/2003, source: Gartner. ($$ 7-page report, $195)

Next Big Thing for ERP Vendors? For enterprise resource planning vendors that have found their markets dry, expanding into new niches has become the norm. CRM and supply-chain applications have been the two biggest areas of interest so far. Now, AMR Research analyst Michael Burkett is adding product lifecycle management, or PLM, to the list. In a recent report, Burkett pointed to SAP (NYSE: SAP), PeopleSoft (Nasdaq: PSFT) and Oracle (Nasdaq: ORCL) as examples of ERP vendors that are rushing to add PLM functionality to their product suites. 2/26/2003, source: E-Commerce Times

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