ERP Vs. PLM: What Are The Key Differences & Integration Capabilities?
Share via
Share via
Marcie Nguyen
Marcie is a skilled writer at Havi Technology focusing on creating content for marketing, eCommerce, point of sales, and ERP solutions. With over 8 years of experience in the retail, eCommerce and ERP technology sectors, Marcie is dedicated to providing insightful answers to business owners of all scales.
TABLE OF CONTENTS
Want to see how Havi can help with your ERP software implementation?
Let our dedicated team support you every step of the way.
While ERP streamlines business processes like finance and supply chain, PLM (Product Lifecycle Management) focuses on managing the entire lifecycle of a product. Together, they provide the foundation for better collaboration, smarter decision-making, and accelerated growth.
What distinguishes them, and how do they work together to enhance operations? Let’s dive into the key differences and explore why their integration can give your business a competitive edge.
Introduction to ERP and PLM & Their Benefits to Businesses
1. What is an ERP system?
An Enterprise Resource Planning (ERP) system is an integrated platform that helps you manage and automate your core business processes. ERP systems help businesses improve efficiency by streamlining key areas such as financial management, inventory optimisation, customer relationships, procurement processes, workforce management, and supply chain operations.
The ERP market is expected to see rapid growth, with forecasts showing it’ll rise to $96 billion by 2032. This surge in demand highlights the impressive advantages that ERP systems bring to businesses.
2. What is a PLM (Product Lifecycle Management) system?
Product Lifecycle Management (PLM) refers to business software that enables you to manage the lifecycle of a product from its initial concept and design to production and end-of-life phase.
PLM systems store and manage a wide range of product-related data, such as product specifications, engineering drawings, bill of materials (BOMs), product files, and test results. A PLM system not only facilitates better collaboration among product designers, engineers, and other stakeholders but also enables companies to track changes to product information and effectively communicate revisions across production.
The PLM market is projected to record a CAGR (Compound Annual Growth Rate) of 7.5% during 2024 and 2032, reflecting its increasing importance across industries. As businesses strive for greater efficiency in product development, PLM has become an integral tool, bringing back several benefits.
ERP vs. PLM: Key Differences and Similarities
What Do ERP & PLM Systems Share in Common?
While ERP and PLM systems serve different purposes within an organisation, they share several key characteristics and functionalities that make them complementary when integrated.
Key Differences Between ERP and PLM Systems
ERP focuses on managing and optimising core business operations (e.g., finance, supply chain, and human resources), while PLM is dedicated to overseeing the entire product development process, from initial design and innovation to manufacturing and end-of-life management. You'll find a detailed comparison of their core differences right below.
Aspect
ERP (Enterprise Resource Planning)
PLM (Product Lifecycle Management)
Core focus areas
Financial tracking, sales, supply chain management, resource planning, and more
Product innovation, lifecycle optimisation, design and development processes.
Primary users
Operations managers, finance teams, HR departments, procurement specialists, and supply chain managers.
Engineers, designers, R&D teams, product managers, and production teams.
Data types managed
Transactional data such as sales, purchase orders, inventory levels, financial data, and employee data.
Product-related data such as CAD files, Bill of Materials (BOM), design revisions, product specifications, and compliance documentation.
System outputs
Financial reports, inventory levels, production schedules, procurement reports, and operational metrics.
Product designs, updated BOMs, design iterations, and engineering change orders.
Implementation scope
Enterprise-wide; affects most departments within the organisation, integrating functions across the business.
Primarily focused on product development, design, and engineering teams; its scope is more focused on the product development cycle.
Compliance & standards
Focuses on financial compliance or supply chain regulations.
Ensures compliance with product specifications, design standards, and industry regulations (e.g., FDA, ISO).
Integration with other systems
Integrates with a wide range of business systems such as accounting, logistics, payment, and payroll.
Primarily integrates with design tools (e.g., CAD software), manufacturing tools, and ERP systems.
Which Cases Need ERP & PLM Integration?
ERP and PLM integration aims to bridge the gap between product design and operational execution. It ensures real-time data flow, reduces errors, and accelerates time-to-market by aligning engineering changes with supply chain processes. Here are the industries and scenarios where ERP and PLM integration becomes a game-changer.
1. Manufacturing complex products
In industries where products involve thousands of components and complex engineering designs, managing data silos can lead to inefficiencies and costly errors.
PLM systems handle intricate designs, engineering specifications, and Bills of Materials (BOMs). ERP systems, on the other hand, manage procurement, production planning, and inventory. Integration ensures these two systems work together to create a seamless production process.
For example, a car manufacturer designing a new electric vehicle uses PLM to manage CAD files, technical specifications, and design iterations. Integrating PLM with ERP ensures these designs translate into accurate production plans, part procurement, and inventory management.
2. Shortening product development cycles
Competitive markets demand faster time-to-market for new products. Manual data transfer between PLM and ERP slows down the process and increases the risk of errors. Integration streamlines the transition from product design to production, allowing your business to respond quickly to market demands.
For instance, a consumer electronics company designing a new smartphone uses PLM to create and refine the product’s design. Integration ensures that as soon as the design is approved, ERP receives the finalised BOM and production can begin immediately, meeting tight market launch deadlines.
3. Compliance with industry standards
Heavily regulated industries require strict adherence to compliance standards and complete traceability of product data across the lifecycle. Disjointed systems make it difficult to maintain accurate documentation and create audit trails. Integration ensures smooth data flow between PLM and ERP, simplifying compliance.
Let’s say, a pharmaceutical company developing a new drug uses PLM to manage formulation data and compliance documentation. By integrating with ERP, the company ensures manufacturing processes align with approved formulations and automatically generates reports required for regulatory audits.
4. Supporting industry 4.0 initiatives
Industry 4.0 revolves around using data-driven technologies such as IoT, AI, and digital twins to optimise operations. For this, companies need seamless access to both product data (PLM) and operational data (ERP). Integration creates a unified data environment essential for analytics, automation, and intelligent decision-making.
For example, a smart factory producing IoT devices integrates PLM with ERP to unify product design data (e.g., prototypes) with real-time manufacturing data (e.g., production rates). This integration enables the factory to create digital twins for testing and optimising production before physical manufacturing begins.
Get Started With Custom Integrations Now
Every business has unique workflows, data requirements, and objectives - making a one-size-fits-all integration approach ineffective. Custom integrations between ERP and PLM systems are the key to aligning your specific processes, enabling real-time data sharing, and optimising both product development and operational performance.
Working with an implementation expert can make all the difference. They’ll help identify the key touchpoints between ERP and PLM, ensuring that the integration delivers value without disrupting your operations.
ERP & PLM - Frequently Asked Questions (FAQs)
1. Is PLM an ERP?
No, PLM (Product Lifecycle Management) and ERP (Enterprise Resource Planning) serve distinct purposes. While PLM is dedicated to managing a product’s lifecycle, from concept and design to development and disposal, ERP focuses on managing core business operations such as finance, procurement, supply chain, and HR.
2. What is a PLM tool?
A PLM tool is a software system designed to centralise, organise, and manage all product-related data throughout its lifecycle. It enables teams to collaborate efficiently on product development, ensuring accuracy, consistency, and traceability. Common features of PLM tools include:
3. What data is typically shared between ERP and PLM?
When ERP and PLM are integrated, certain data is commonly shared between two systems, including Bill of Materials (BOM), Engineering Changes (ECOs), design details and requirements, compliance and documentation.
References: