Why Integrate Aras Innovator with your ERP Platform?
/Enabling the Digital Thread - Part 1 in a 3-Part Blog Series
Introduction
Welcome to the first entry of our three-part blog series where we'll delve into the integration of Aras Innovator and ERP systems. This series aims to explore what such an integration accomplishes, how does it work, and how it is implemented. It is based on vdR Group’s extensive experience with both Aras Innovator and integration implementation projects.
Figure 1 - Generalized View of the Product Lifecycle of Activities
Let’s start by revisiting the popular concept of the product lifecycle of activities. Shown in Figure 1 below is a genericized overview of the operations (chevrons on the top) and the various applications that support those operations.
The applications shown include Product Data Management (PDM), Computer Aided Design (CAD), Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Manufacturing Execution Systems (MES), and Maintenance Repair and Operations (MRO), among others. As a PLM platform, Aras Innovator occupies a central role in the product lifecycle.
The Digital Thread
The lines in the figure above represent not only the progression of activities, but also suggest some level of connectivity. This is the digital thread. This concept has garnered significant attention from analysts, software vendors, and industry thought leaders, all highlighting its importance and value. While the terminology may vary, the underlying goal for organizations remains consistent … enhance efficiency, streamline processes, automate routine tasks, boost performance and competitiveness, and ultimately reduce the cost of quality (CoQ).
The reality is that most if not all of this so called “connectivity” is the exchange of product information via emails, documents, spreadsheets, shared file folders, and the export and import of data and files. And this disconnect results in missed-reuse opportunities, scrap, rework, delayed deliveries, expedited shipment expenses, costly support, warranties, and negatively effecting a company’s reputation.
Aras is at the head waters of product data. Yes, specifications, requirements, etc., are created during the sales and project management phases. But ultimately the product design, engineering, relationships and structure, and changes are established in Aras. ERP, MES, MRO and other related applications rely on this data. The first and foremost of these applications is ERP. The part and product data derived from PLM is critical for sourcing, purchasing, QA and inspection, inventory, and scheduling. As a result, integrating PLM and ERP are a cornerstone of the digital thread.
Think of Aras Innovator as the nucleus of “processes” and ERP as its “transactional” counterpart. Common ERP systems today include …
Acumatica
Epicor
Infor Visual
JD Edwards
Microsoft D365
Oracle EBS
Oracle NetSuite
QAD
SAP S4/HANA
Syteline
What is Exchanged between Aras and ERP?
A recurring scenario for an integration is the “part/bill of materials (BOM)” release process. When parts of a product configuration are ready for purchase, outsourcing, or manufacturing, they are typically transferred to an ERP system where purchasing, inventory planning, production scheduling, and work orders commence.
BOM structures can include dozens or even hundreds of parts. Traditionally, releasing these parts involved manually entering them into an ERP system—a time-consuming and error-prone process. Errors in this phase can lead to significant issues as previously noted.
What is the Value of an Automated Integration?
As suggested earlier the expenses associated with the intervention-based manual processes result in errors. On a company’s profit and loss (P&L) statement, these errors are primarily buried in the cost of goods (CoG) so as not to air the “dirty laundry.” But behind the scenes, the cost of quality (CoQ) is typically tracked (because you are out of business if you are not tracking this stuff). And the CoQ is a direct drain on profits. Analyst research shows that CoQ can represent anywhere from 2% to 10% of a manufacturer’s total revenue! Connecting PLM and ERP can cut this by an estimated 10% to 25%. Of course, these numbers are dependent on the industry. Regardless, the value of automating the exchange of data and files between PLM and ERP reduces the CoQ. Thus, this integration goes beyond efficiency—it becomes a business imperative.
Next in the Series
Part 2 of this three (3) part series identifies the common use cases that facilitate an integration. And part 3 provides an in-depth look at how these integrations are implemented and best practice considerations based on vdR’s extensive integration work.
