Is SAP PLM for Real?

What This Article Covers

• How SAP has been busy pushing a solution that does not actually exist as a distinct product.
• An analysis of SAP PLM.
• The common problems with PLM in SAP ERP.
• PLM and Service Parts.

Pushing SAP PLM

For some time SAP has been promoting its product life-cycle management (PLM) solution. PLM is a problematic term that more than a few companies have had a problem defining. Eric Larkin of Arena Solutions discusses some of the challenges in this video.

Analyzing SAP PLM

When I did an analysis of SAP PLM for a client, I learned that PLM was not an actual product, but was in fact a “solution.” What his means is that various pre-existing modules have been created around the material master in order to meet PLM requirements. This is much like SAP’s non-existent digital asset management solution – where digital media are entered as materials into SAP. Actually digital asset management and PLM have a lot in common because both solutions require a lot of functionality in terms of multi-media files. For PLM these files take the form of images and schematics, while in digital asset management the files take the form of images, music and video. However, the material master functionality in SAP is not designed to manage these files, or make them easy to find or reference. There is no big surprise why. The material management functionality was designed to hold textural data on products for the purposes of accounting and supply chain management. Changing this functionality around to meet the needs of asset and document management is no easy task. When one goes through the BOM functionality and compares it to a real BOM management solution, the difference is like night and day.

Problems with Managing Changing Materials in SAP ERP

If a company makes changes to their material masters and they have SAP ERP, they have maintenance problems. SAP ERP has limited methods for making adjustments to materials, with the consequence that new materials are created as copies of old materials, and the old materials have no real way of being connected to the new materials. The overall maintenance problems with SAP mean these materials that are no longer, or little used, clog up the system. This serious limitation for material master management was one of motivations for bringing out SAP PLM. However, instead of bringing out a new “product” SAP should have simply addressed the underlying material management functionality of the existing software their customers had already purchased. They of course did not do this. However, while the BOM management is one part of PLM, the solution from SAP is much more encompassing than just BOM.

Life-cycle Planning in SCM

The confusing part about PLM, which SAP does not adequately explain is that SAP life-cycle planning exists in the supply chain planning suite offered by SAP. For instance, in Demand Planner, which is the forecasting module of SAP SCM, life-cycle planning in incorporated. DP allows you to introduce an existing product at a different location – using profiles to base historical data from current locations. Phase in profiles allows the reduction of the forecast for the period of introduction. We describe this more fully here:

http://www.scmfocus.com/sapplanning/2009/04/21/plm-and-lifecycle-planning-in-scm-dp/

However, this capability in DP, and the product interchangeability functionality that is available in other modules of the SCM suite (notably SNP, CTM, PPDS and GATP) is quite a bit different from the integrated PLM solution that SAP presents to clients. Again, this gets back to the problem with the PLM solution, confusing messaging from SAP and functionality which is PLM related, but does not exist within the official PLM solution. PLM functionality can exist in different areas of supply chain applications, however, it does not mean that the solution is offering advanced bill of material management functionality which includes:

• Multimedia file management
• Document management
• Engineering change management
• Collaboration management (between marketing, engineering and production)

SAP Has Had Its Shot in PLM

SAP PLM has not taken off, and it does not appear to be an area they have or intend to put real development effort behind. However, they still make their white papers available on the topic. SAP’s entry into the PLM market’s main effect has been to discourage companies from implementing real PLM solutions and damaging the PLM’s image more generally due to the problems SAP has in bringing PLM live on accounts. Part of this is due to the limitations of the solution, but the other part is related to SAP’s positioning and messaging on the solution.

Here you can see one of the main graphics for SAP PLM (listed under Life-Cycle Data Management at the top). However a major flaw in this diagram is apparent. PLM is based upon document management, but SAP does not have any serious document management capability. The best evidence of this is the state of SAP Solution Manager that is causing project heartburn on SAP projects globally.

PLM and Service Parts

PLM is of course extremely important for service parts. Many of the service parts planning applications have built-in control fields in the form of things like shelf life; and of course supersession is a manifestation of product life cycle needs (out with the old – in with the new). While doing some research on PLM for service parts I came upon a company called Arena Solutions and I have tested their software extensively. I think its time more companies gave it a try. It is extremely easy to use, offers hosted solutions and just has tons of PLM functionality. I have over time interacted with Arena Solutions and always come way impressed with their solution and their people. I have written a series of articles and video interviews with them. You can find these articles at this link. However, the market is largely immune to such information, and continues to believe SAP offers a solution where it has none, and to not use “real” solutions in this space because they don’t have a major brand name attached.

PLM and PDSs

SAP has an object in SAP SCM called the Production Data Structure (PDS) that proposes to have PLM capabilities and ties into the rest of SAP’s “PLM” functionality. However, as companies do not actually use SAP for PLM, its makes little sense to use the PDS for that purpose. However, SAP still advises using this object on projects. Read about SAP’s message to clients in this post.

Conclusion

SAP’s has a number of disadvantages when it comes to competing in the PLM market. One is that the material master is not an effective object for BOM life cycle management. The material master lacks the functionality and is extremely far behind of the best of breed Arena Solutions in all functionality related to change and collaboration. Attempting to bring life cycle capabilities as well as collaboration to the material master functionality is stretching it beyond its original design. Secondly, SAP’s messaging is confusing and does not take into account the PLM functionality that is distributed throughout many applications including SAP APO/SCM, but without explaining how it leverage them or even interacts with them. Many analysts who write in the PLM/BOM management space seem to have no idea about the subject matter and cannot help clients differentiate quality solutions from vaporware.

In summation, PLM is a very high risk solution and implementation and companies evaluating it must be extra careful to check what is actually there.

Update

Since this article was written, SAP has attempted a reboot of it’s PLM solution. This article is still relevant to read, because in many ways, things have not changed. However, to read the latest on this topic see this post.

References

http://www.amazon.com/Sales-Inventory-Planning-SAP-APO/dp/1592291236

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Tagged as: Customer Service Level, Supersession