What is the difference between PLM and ERP?

As you design, develop and bring your engineered products to market, doing so efficiently and cost-effectively is crucial to maintaining a competitive advantage. The importance of technology in achieving those objectives is rarely up for debate. Which technology to use, however, continues to be a fundamental question.

There is a lot of confusion over PLM and ERP systems. To simplify and save money, many organizations wonder if they can get away with using just a single solution. Today, we’ll answer that question (spoiler alert: the answer is no) as we delve into the core differences between PLM and ERP.

What is the difference between PLM and ERP?

While PLM and ERP systems share some functionality, they do not serve the same core purpose. At a high level, PLM is used for planning while ERP involves execution and fulfillment. Let’s dig in.

A PLM solution is a planning tool primarily used by engineers and project managers to define, design and plan a product. A PLM system helps you control the product record across all development stages—from concept to design to production—with the ability to consolidate, organize and track product data in a centralized location. With a PLM solution in place, those involved in the design, development and manufacturing process can seamlessly collaborate using the most accurate and up-to-date information about the project.

An ERP system comes into play later in the process to ensure your products are manufactured in a timely, cost-controlled manner once approved. With the ability to manage things like manufacturing resource planning, orders, inventory, purchasing and accounting, an ERP system is designed to cut costs and boost business process efficiencies through automation, data standardization and information sharing.

PLM and ERP integration:

Neither tool is a replacement for the other. The most successful manufacturing companies use ERP and PLM systems together—PLM to manage the process behind the product and ERP to support business operations. By understanding the fundamental differences between PLM and ERP and knowing how to use them together, you’ll support stronger collaboration between engineers, operations, suppliers and more.

Because PLM manages the development of a product and ERP focuses on resource planning for production, they should be used in that order. Think of PLM as a prerequisite to ERP. Your PLM houses all the data related to the design of the product to the point when it’s ready for production. By transferring that data to an ERP, you can better manage the resources involved in producing the product. If a change occurs during the resource planning process, that information can be communicated to the PLM to offer a complete picture of what’s going on. Without ERP and PLM integration, your internal teams will end up wasting time on things like re-entering data, fixing errors, working with inaccurate product forecasting and more. But with a continuous flow of information and data between the two platforms, you will have complete control over your entire manufacturing process.

As you explore the differences between PLM and ERP, remember—each serves very different but equally essential functions, and neither should be used in place of the other.

At Sterling, we specialize in Polarion, a browser-based software program designed to collaboratively manage all facets of the product development lifecycle. We are PLM experts—and we can help you figure out the differences between PLM and ERP and how to integrate the two to support optimal processes.

Contact our Polarion Consulting team today for more information. In the meantime, if you’re struggling with remote workforce project management challenges, read more here.