For retailers designing, sourcing, and building a high volume of products, implementing a development platform to manage essential business operations can boost productivity and operational efficiency. Brands may choose to streamline vital development processes with the help of Product Lifecycle Management (PLM) coupled with Enterprise Resource Planning (ERP) software.
While each solution compliments one another, PLM helps facilitate the complete development and design cycle, whereas ERP serves more directly with supply chain organization, including accounting, inventory, and logistics. Integrating each tool is beneficial in its own way; however, their capabilities are substantially different. Before you consider each platform, let’s further discuss PLM vs ERP, how these systems differ, and their potential impact on your business.
What is PLM?
PLM solution manages the product development lifecycle from conception and design to sampling and production. It is a collaborative solution that allows designers, product developers, and sourcing teams to seamlessly integrate data, such as colors, size specs, and materials, as well as communicate with adjoining team members to ensure sample changes are demonstrated to the supply chain. In a way, PLM is the pre-production end-to-end product lifecycle tool that enables ERPs to process work through the manufacturing process.
What is ERP?
In comparison, ERP ensures products are manufactured in a timely, cost-controlled manner once a product has been designed and approved. This procedure uses a database to automate the various core processes of a company related to finance, manufacturing, technology, services, and human resources. It’s seen as a catch-all solution for larger companies to manage business functions in a central location. While modern ERP systems have evolved to offer more visibility across business ventures, ERP often includes an “add-on” PLM solution that does not encompass the depth required for an effective product development process.
Retail PLM vs ERP: Capabilities & Comparisons
To simplify the information above, PLM allows design teams to focus on the ideation, innovation, and development of a product.
An ERP’s role is to execute that product and manage cost-control during the supply stages.
A PLM solution allows design teams to highlight the correlation between each component of a product, while an ERP platform handles the transition of materials for inventory, production schedules, and logistics.
PLM tools are used primarily by technical designers and product developers, and ERP systems are more often used by manufacturing or operations personnel. Each system is diverse in its function and cannot be replicated with the other’s capabilities.
Follow the chart below for an easy-to-read breakdown of both PLM and ERP solutions.
Benefits of Retail PLM Integration
The ability to share product data and sampling changes in real time is vital for a successful development process. Whether you’re sharing past or current product renderings, having an accurate forecast of materials will reduce errors, cut costs, and centralize data to establish an efficient workflow throughout each stage of the development lifecycle.
Some of the main benefits of a PLM system include:
Efficiency Rates: PLM integration enhances productivity and provides access to real-time data, meaning you are always updated on the most current version of a product and can easily make changes as needed. Updating and transferring data is automated, so designers can better use their time creating new products rather than manually inputting product information. According to a study by Aberdeen Group, companies using PLM solutions experienced an average 50% reduction in time-to-market for new products.
Reduced Costs: Product data is moved effortlessly across departments without interference; thus, the margin of error decreases and reports are far more accurate. Increased data accuracy allows businesses to reduce sampling and confidently place orders, helping to save money on additional materials and avoid supply shortages. A study by AMR Research indicated that PLM adopters achieved an average 15% reduction in product costs!
Fine-tuned Collaboration Efforts: Clear communication across all departments is necessary for success. Any disparity in product data or confusion in the way records are uploaded by team members can lead to miscommunication, errors, time, and lost revenue. An integrated PLM solution provides a single source of truth for all product-related data, encouraging the collaboration and exchange of information among internal teams and stakeholders. Having a clear understanding of how each product evolves throughout the development cycle better aligns departments and increases performance. Research by Retail Systems Research (RSR) found that 48% of retailers cited improved collaboration as a key benefit of implementing PLM.
Compliance & Sustainability Initiatives: PLM solutions that provide visibility across the supply chain can support retailers in adhering to regulations and implementing environmentally responsible practices. This allows retailers to track and verify sustainable sourcing practices, such as responsible forestry, fair labor, and ethical manufacturing. With comprehensive data on suppliers, materials, and processes, companies can make informed decisions that align with sustainability goals.
Improved Customer Satisfaction: When errors are reduced, the process becomes much smoother for everyone involved in the product development lifecycle. While a PLM supports internal development teams, it also leads to increased customer satisfaction and loyalty by placing orders with factories faster and more accurately, also providing better quality for the customer.
- Faster time-to-market means customers get access to new and trendy products quickly
- Meeting or exceeding customer expectations leads to higher satisfaction and fewer returns
- Offering the right mix of products can help a customer find what they want at the right time
However, if your retail organization is considering an “add-on” PLM system within a larger ERP system, there are some key things to consider:
- Establish documentation to call out expectations around collaboration within systems and teams
- Ensure that your integrations are without error, so data and communication across systems and teams are seamless
- Consider whether the PLM system can scale effectively as your retail business grows
- Ask the PLM provider if it can support internal and external partners from design to delivery across multiple product categories
By carefully considering these factors, your retail organization can make an informed decision and choose the right “add-on” PLM system that complements your larger ERP system and meets your business needs effectively.
Frequently Asked Questions
If you’re comparing retail PLM vs. ERP, you probably have some questions.
Let’s discuss a few FAQs regarding product development software.
Should PLM and ERP Systems be Combined?
If your company tries to combine both tools into one product, you will likely use fewer features and sacrifice the unique characteristics that make these tools successful. As a best practice, we recommend separating PLM and ERP solutions as their application structures are opposing. There is a significant difference between sourcing product data for design and sourcing product data for sales transactions. By allowing each system to operate on its own, both solutions can function as intended and deliver the best possible results.
Do You Need Both PLM and ERP?
It depends. Choosing the right providers that align with your business goals, size, and budget is essential. Best-of-breed PLM solutions will have partnerships with ERP providers to create a seamless flow of information across your business and vendor partners. An end-to-end platform can also support internal and external partners from design to delivery across multiple categories. Make sure to research and evaluate different vendors to find the most suitable solutions for your retail business. We’re here to help!
What Makes Our System Unique?
For a system that stands out from other PLMs, consider Bamboo Rose. It’s a comprehensive end-to-end platform designed to support design through delivery. With our acquisition of Backbone PLM, we’ve thoughtfully designed our PLM platform to facilitate the needs of designers, tech designers, and product developers as they bring products from design to production. Bamboo Rose empowers retail results through collaboration and efficiency.
Want to learn more about our product development and supply chain platform?
Schedule a meeting.