Management Information Systems

Prof. Surojit Mookherjee

VGSoM, IIT KHARAGPUR

Week 04: Customer Relationship Management

Lecture 01 :

1
 Customer Relationship Management ……

 Customer relationship management (CRM) is a strategy for managing a

company’s interactions with it’s customers and sales prospects.
 Often CRM is equated with automating business processes related to sales,
marketing and customer service – CRM is not just about technology
 It involves strategy and redesign of business processes with the overall goal to
find, attract, and win new customers, retaining those customers and finally
getting feedback from them to better design company’s product and customer
facing processes.
 CRM can also reduce the costs of marketing, sales and customer service.

2
 Customer Relationship Management

 CRM uses people, processes, and technology to gain insight into the behavior of
customers
 CRM can bring together information from all data sources within an
organization (and from outside the organization if needed) to give one holistic
view of customer in real time.
 CRM allows customer facing employees from sales, customer support, and
marketing to make informed decisions on everything from cross selling and
upselling opportunities to target marketing strategies to competitive positioning
tactics.

3
CRM Benefits
Higher
Productivity
Increased
Better
Customer
Cross Sell /
Retention /
Up Sell
Loyalty

Better Improved
profitability / Customer
revenue per CRM Benefits Service /
customer Satisfaction

Reduced Better
Sales and Opportunity
Marketing Close
Expenses
Focused
Marketing

4
 CRM Application Areas

Sales Force
Automation
Field Service
Revenue and Pricing
eCommerce
Product Configuration
CRM Applications Call Centre
Order Management
Partner Relationship
CRM Analytics
Mgmt

Marketing

5
 Sales Force Automation (SFA)….

Typical areas of sales force automation applications are:

 Contact management
 Lead management / Opportunity management
 Sales forecasting and pipeline
 Sales performance management
 Territory management
 Quote generation

6
 Sales Force Automation (SFA)

 SFA applications help sales force in their daily jobs and aimed at increasing their
productivity.
 With these applications sales force need not remember or store contact
information of thousands of company’s existing customers and new prospects.
 SFA applications help them to manage new leads and sales opportunities.
 These applications helps sales force in managing sales in their territory and
tracking sales performance, based on which they are provided incentive /
compensation.

7
 Field Service Application
 As companies need to manage a large number of mobile technicians distributed
across different customer sites, Mobile solutions are increasingly becoming an
important component of field service applications.

Typical capabilities of field service applications are:

 Filed service management ( Utility services like Power distribution , civic
amenities )
 Scheduling workforce
 Managing spares / service parts
 Mobile Solutions capability

8
 Field Service Application

 These applications typically helps in different after sales service functions i.e.
helps managing installation, service, or repairs of systems or equipment
 These solutions also support scheduling workforce i.e. which worker should go
to which customer site and attend which type of equipment / problem based on
worker’s availability and skill.
 Some of these after sales service activities need some kind of spares, managing
reverse logistics and spare parts management and these are under the domain
of these applications.

9
 E Commerce Application …….

Typical capabilities of E Commerce applications are:

 eMarketing
 Campaigns
 Personalization
 Online ordering
 Online product configuration
 Online auctions
 Online exchange and return
 Online Billing and Payment

10
 E Commerce Application

 These applications help companies to buy, sell, and do other transactions over
the Web.
 Companies use these applications for variety of purpose like product search /
browse, buying through shopping cart, product promotion, personalization,
cross-sell and up-sell, product configurations, registries, multichannel ordering,
customer self service etc.
 Today e-commerce is becoming even more powerful with Web 2.0. It has even
spread to small towns and rural areas.
 Easy availability of Smart phones and Data services have played a great riole in
spreading the popularity of e-commerce

11
 Call Centre / Contact Centre Application ….
Typical capabilities of call centre applications are:
 Predefined escalation route
 Previous records of the caller
 Support in different time zones in different languages
 Managing call assignments
 Knowledge Base
 Self service capabilities
 Workflow

12
 Call Centre / Contact Centre Application

 These solutions provide customer support by answering different types of

customer queries / calls and routing the calls to the most competent person
who can handle it.
 Call centre uses a variety of technologies like: local area networks (LAN),
automatic call distributors (ACD), computer technology integration (CTI), Web
integration, interactive voice response, voice logging and messaging,
IVR/speech portals etc. Call centers today are capable of supporting complex
customer interactions, such as scheduling service requests, providing technical
support, and handling financial transactions.

13
 Partner Relationship Mgmt (PRM) Application…..
Typical capabilities of Partner Relationship Management applications are:
• Partner addition
• Distributing leads
• Partner profiling
• Managing different partner programs
• Partner opportunity tracking
• Special partner discounts and approvals
• Partner service
• Managing channel inventory / partner pipeline:

14
 Marketing Mgmt Application…..

Typical capabilities of Marketing Management applications are:

• Campaign management
• Customer interaction management
• Marketing planning
• Marketing resource and asset management
• Opportunity / Lead management
• Loyalty marketing

15
 Marketing Mgmt Application

 These applications are used by companies to manage their end-to-end process

from gathering and analyzing customer data across Web sites and other
channels, to planning, budgeting, to executing customer communications and
measuring results / effectiveness.
 It helps the enterprise identify and target its best customers and generate
qualified leads for the sales team.
 Marketing automation also encompasses capabilities for managing customer
loyalty, lists, collateral, and internal marketing resources.
 These tools support an integrated approach to marketing strategy, development,
delivery, and measurement across the marketing mix.

16
Revenue and Pricing Mgmt Application

Typical capabilities of Revenue and Pricing Management applications are:

• Trade promotion management
• Promotions
• Pricing and promotion optimization

These applications help companies to optimize and manage prices throughout the
product life cycle, including: initial pricing, promotional, and markdown or
clearance pricing.

17
 Product Configuration Application

 These tools are popular for complex products and services.

 These applications help customers to configure a product as per their

desired specification on the web ( e.g Dell Desktops )
 Based on this configuration, company’s sales staff can quote and generate a
price proposal quickly.
 These applications can automate sales and product configuration, proposal
configuration, cost estimation and pricing and can compress the entire
lead-to-order process.

18
 CRM Analytics
There can be different types of CRM analytics like:

 Sales analytics: This allow companies monitor and understand customer actions
and preferences, through dashboards that graphically display KPIs.

 Marketing analytics Marketing applications generally come with predictive

analytics to improve customer segmentation and targeting, and tools to measure
the effectiveness (ROI) of a marketing / sales promotion campaign.

 Customer service analytics are increasing in popularity as companies demand

greater visibility into the performance of call centers and other support channels,
in order to correct problems before they affect customer satisfaction levels.

19
 Leading CRM Products

 SAP CRM
 Oracle Siebel
 Salesforce.com
 Microsoft
 Amdocs

20
REFERENCES

 Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill – Chapter 28

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon

21
22
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 04: Supply Chain Management

Lecture 02 : SCM – Part 1
 What is Supply Chain ?

Supply Chain Management is a complete process of changing the raw

materials into goods and delivering them to the end-user.
 It is a process of managing the flow of goods/ services starting from the
supply of raw materials to the manufacturer until the delivery of the final
good to the consumer. It involves material flow and information flow.
 SCM involves the supply and storage of raw materials, production of goods,
transporting and delivering it to the end-user.
 Supply Chain is a network of individuals, resources, organizations,
processes, technologies connected together to produce a product/service.
The Supply Chain Management Process

Goods and Services

Planning Procurement Production Distribution

Supplier Customer
Cash
3 Key Features of SCM …. What it tries to achieve ?

Reduce Time of Reduce Cost of

Delivery Delivery

Increase
Collaboration
amongst Partners
What is Supply Chain Management

– Manage a firm’s relationships with Suppliers / Vendors and Customers

– Share information about :

 Orders,
 Production,
 Inventory levels,
 Delivery of products and services

– Goal:
• Right amount of products to destination with least
amount of time and lowest cost
 Supply Chain is …..

• Network of organizations and processes for:

• Procuring materials, transforming them into products, and distributing the
products
• Upstream supply chain
• Firm’s suppliers, suppliers’ suppliers, processes for managing relationships
with them
• Downstream supply chain
• Organizations and processes responsible for delivering products to
customers
• Internal supply chain
• Inside the factory between stores , shop-floor and warehouse.

6
Nike’s Supply Chain

7
 Supply Chain Management - Features

• Inefficiencies cut into a company’s operating costs

• Can waste up to 25 percent of operating expenses
• Just-in-time strategy
• Components arrive as they are needed
• Finished goods shipped after leaving assembly line
• Safety stock: Buffer for lack of flexibility in supply chain
• Bullwhip effect
• Information about product demand gets distorted as it passes from one
entity to next across supply chain

8
 THE BULL-WHIP EFFECT
The bullwhip effect is the uncertainty caused from distorted information flowing up
and down the supply chain.
Causes of the Bull-Whip effect

 Demand forecast updating

 Order batching
 Price fluctuation
 Rationing and shortage gaming
 Un-forecasted sales promotions
 Customers turning back sales orders
 Impacts of the Bull-Whip effect

 Excess inventories
 Unnecessary costs
 Tense supplier relationships
 Stock outs
 Increased wastages
 Changes in buying patterns
Methods of coping with the Bull-Whip effect

 Improve communication along the supply chain

 Improve sources of forecast data
 Share Information
 Establish a demand-driven supply chain which reacts to actual
customer orders – Pull instead of Push system
 Break order batches into smaller lots
 Stabilize prices
 Eliminate gaming in shortage situations
 Supply Chain Management Systems

• Supply chain planning systems

• Model To-Be supply chain based on Industry best practices
• Enable demand planning through ERP
• Optimize sourcing, manufacturing plans using Pull system
• Establish inventory levels ( e.g. Re-Order point planning )
• Identify transportation modes
• Supply chain execution systems
• Manage flow of products through distribution centers and warehouses

13
Global Supply Chains and the Internet

• Global supply chain issues

• Greater geographical distances, time differences ( e.g. most apparel sourced from
South East Asian countries )
• Participants from different countries
• Different performance standards
• Different legal requirements
• Internet helps manage global complexities
• Warehouse management
• Transportation management
• Logistics
• Outsourcing

14
Demand-Driven Supply Chains: From Push to Pull Manufacturing and
Efficient Customer Response

• Push-based model (build-to-stock)

• Earlier SCM systems
• Schedules based on best guesses of demand
• Pull-based model (demand-driven)
• Web-based
• Customer orders trigger events in supply chain ( Dell Computers )
• Internet enables move from sequential supply chains to
concurrent supply chains
• Complex networks of suppliers can adjust immediately

15
Push- Versus Pull-Based Supply Chain Models

Car Manufacturers – Is it
Push or Pull based ?

16
REFERENCES

 Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill – Chapter 25

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 04: Supply Chain Management

Lecture 03 : SCM – Part 2
 1

JUST IN TIME AND LEAN SYSTEMS

 2

Just-In-Time (JIT)

• JIT can be defined as an integrated set of activities designed to

achieve high- volume production using minimal inventories
(raw materials, work in process, and finished goods)
• JIT involves the elimination of waste in production effort
• JIT involves the timing of production resources (i.e., parts
arrive at the next workstation “just in time”)
 Creating the Lean Supply Chain
▪ What is Lean System ?
 “A philosophy that seeks to shorten the time between the customer
order and the shipment to customer by eliminating waste”

▪ Three primary elements of Lean :

Just-in-time Purchasing
Just-in-time Transportation
Just-in-time Production

“Just-in-time” is a management philosophy, not

technique, and the philosophy is simple - inventory
is defined to be waste

4
 4

The Toyota Production System

• Based on two philosophies:

 Elimination of waste
 Respect for people
 5

Waste in Operations

1. Waste from overproduction

2. Waste of waiting time
3. Transportation waste
4. Inventory waste
5. Processing waste
6. Waste of motion
7. Waste from product defects
 11

Minimizing Waste: Inventory Hides Problems

Machine
downtime
Example: By identifying
defective items from a
Scrap Vendor vendor early in the
delinquencies Change production process the
Work in
orders downstream work is saved
process
queues Engineering Design
(banks) design backlogs Example: By identifying
redundancies defective work by employees
upstream, the downstream
Paperwork Inspection Decision
work is saved.
backlog backlogs backlogs
 12

Minimizing Waste: Kanban Production Control Systems

Once the Production kanban is received,
the Machine Center produces a unit to The process begins by the Assembly Line
replace the one taken by the Assembly people pulling Part A from Storage
Line people in the first place

Production kanban Withdrawal kanban

Bin

Machine Part A
Center Assembly Line

Material Flow
Card (signal) Flow
 13

Determining the Number of Kanban's Needed

 Setting up a kanban system requires determining the

number of kanban cards (or containers) needed
 Each container represents the minimum production lot
size
 An accurate estimate of the lead time required to
produce a container is key to determining how many
Kanban's are required
 Managing Inventory Investment

Volume pertains to the Velocity pertains to how

amount of physical Volume quickly raw material/WIP
inventory a firm owns at become finished goods
any given time across that accepted and paid by
the supply chain customer;
Value Velocity
Key Question: How Key Question: How fast
much and what types of do me move inventory to
inventory do we own? the customer?
Value pertains to the unit cost and Key Measures:
Key Measures: Total total value of inventory; Inventory turns
units, total pounds
Key Measures: Total dollars; Activities Affecting
period-by-period unit value changes;
Activities Affecting Volume: Made-to-order
ratio of sales to working capital?
Volume: Improved production, Lean supply
forecasting techniques; Activities Affecting Volume: chain practices;
supplier-provided Product simplification/standardization
consignment inventory

10
The Emerging Internet-Driven Supply Chain

11
Business Value of Supply Chain Management Systems

• Match supply to demand

• Reduce inventory levels
• Improve delivery service
• Speed product time to market
• Use assets more effectively
( Total supply chain costs can be 75 percent of operating costs )
• Increase sales

12
 13

SCM – Challenges and New

Technologies
 Challenges in SCM today

TRACEABILITY QUALITY OF FOOD

SUPPLY

REGULATORY COUNTERFEIT
COMPLIANCE

COST
Technologies and Innovations in SCM
Drones

Big Data

Robotics Cloud Computing

REFERENCES

 Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill – Chapter 25

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 04: Supplier Relationship Management

Lecture 04:

1
 Supplier Relationship Management

 Gartner defines SRM as: “The practices needed to establish the business rules
and understanding needed for interacting with suppliers of products and
services of varied criticality to the profitability of the enterprise

 Meta defines SRM as “SRM is a system of applications that automates specific

planning, scheduling, shipment, and payment processes between a
manufacturer and its critical direct materials suppliers. SRM systems track both
data and process- interchange flows, as well as provide the management and
analytical tools to intelligently track the performance of direct suppliers based
on benchmark, historical, and/or contractual conditions.”

2
 Supplier Relationship Management – Application Evolution

• Supplier/ • Sourcing
Collaboration Optimization
• Contract - Forecast • Industry specific
•E • E Procurement Management - Inventory SRM capabilities
Procurement - For Direct • Content - Product (like Government
- For MRO items Workbench Development Procurement)
Items • Auctions • Supplier • Supplier • Category Mgmt
- For office • Tendering Analytics self service
supplies • RFQ / RFP
• Catalog SRM 4.0
SRM 3.0
Mgmt SRM 2.0

E Procurement SRM 1.0

Starting point SRM – 1st SRM – 2nd SRM – 3rd SRM – 4th
of SRM Generation Generation Generation Generation

3
SRM Vendors serve different purpose for different types of buyers

Auction Collaboration
Shopping Catalog P card Workflow Platform Platform
Cart Content

Desktop Buying by Employees (Items: Office Supplies)

Professional Buying by Procurement Department

(Items: Consumables. Low value indirect items, Service)

Strategic Sourcing by Procurement Department

(Items: Direct production items, Components, Commodities)

Maintenance Sourcing by Engg Buyer (Items: MRO, Engg Items)

4
 SRM – Five Important Areas

 Five Important SRM areas are:

1. Electronic Procurement
2. Catalogue Management
3. Content Management
4. Contract Management
5. Supplier Collaboration

5
 1. E Procurement
Common technology options available for E Procurement are:

A) Electronic Shopping Cart

 Shopping cart is a common e procurement technology used by employees for
procurement of goods and services. Employees can create shopping cart by searching
products in electronic catalogs, start the shopping process, check the procurement status
at any time, confirm goods and services once that is delivered and can then enter invoice
for their purchase order.
B) Procurement Card
 Procurement card can be used as a payment method in E Procurement systems. P cards
are credit cards offered by companies like American Express and Visa.
C) Auction
 This is a suitable process for selecting the most suitable offer in case an organization
deals with a large number of requests for quotations (RFQs).

6
 A) Shopping Cart Functions

 Typical Shopping Cart functions are:

 Creating Shopping Cart (Cart have advanced search capabilities like Catalogs, Favorites
etc. for searching right products)
 Shopping Cart approval
 Purchase Order and Goods Receipt
 Invoice Payment
 Tax Calculation
 Availability check
 Identifying sources of supply / possible vendor for the item
 Approval preview

7
 B) Procurement Card Is a Win-Win for both Buyer and Supplier

Benefits to buyer:
 Reduce cost of purchasing and payment by cutting out unnecessary administration of
multiple ordering and payments to monthly one statement and payment.
 Replacing manual processes with electronic ordering, payment and reconciliation. This
enables instant information sharing and processing.
 Reconciling transactions are easier as all transaction details are available on net – this
help in quick reconciliation and resolve discrepancies

Benefits to supplier:
 Greater security for suppliers as here bank guarantees payment
 Low payment transaction costs as payment happens electronically

8
Procedure of Procurement Card with SAP…..example

Source: www.sap.com
9
 C) Bids and Auctions
Types of Bids
 Public Bids: Here bid invitations are made accessible to potential bidders via
marketplaces on the web. The bidder can reach company’s web page via a hyperlink
from the portal, log on to E Procurement system, and enter their bid.
 Restricted Bids: In this case bid invitations are made accessible to known bidders via e-
mail.
Bids can also be classified as
 Online Static Sealed Bid: The bidders are allowed to bid only once with their price within
a window of stipulated time
 Online Dynamic Sealed Bid: Here bidders are allowed to improve their price bids and till
the hidden reserve price level is touched

10
2.Catalog Management ….

Catalog helps E Procurement in variety of ways:

 Catalogs list all products and detailed product information including links to
supplier data. Catalogs help employees to easily find the products that they
require and for this they support strong search engines that can locate product
based on description, product attributes etc.
 Catalogs can provide price information.
 Catalogs can also check availability from a supplier

11
 2.Catalog Management

Three Types Of Catalogs

 External catalogs: Catalog is managed, updated and hosted by the vendor at his own site.
This is good for the company as vendor in this case is taking all the responsibility.
 Internal catalogs: Catalog is managed, updated and hosted by the company at his own
site. The catalog can have products of various vendors. Advantage of this is look and feel
of the catalog can be controlled and is uniform for all products making it easy for
employees. The obvious disadvantage is the time and cost needed for company to
maintain such catalogs.
 A third party manages the multi supplier catalog on behalf of the company: This multi
supplier catalog is managed by a third party content aggregator on behalf of the
company. Advantage of this is the consistent look and feel for the catalogs from multiple
suppliers. The disadvantage is the recurring expenditure that needs to be paid to 3rd
party.

12
 Catalog Management – Options

Internal Catalogs
External Catalogs
Company Manages
Catalog Catalog Vendor Manages the
Catalog
Management

Third Party Manages Multi

Supplier Catalog
3rd party content Aggregator manages
Catalog from different vendors

13
Areas Of Supplier Collaboration

 Demand / Forecast collaboration

 Inventory collaboration
 New product development collaboration
 Payment collaboration
 Logistics collaboration

14
 Forms of Supplier Collaboration
Collaboration/ trust

Supplier and Collaborative Planning, Forecasting

Company plans and Replenishment (CPFR),
Together
Supplier plans (e.g:CPFR)
for the company
(e.g: Vendor
Managed
Company plans Inventory)
and share
Information with
Supplier
Evolution

15
 Technologies Of Supplier Collaboration
 Electronic Data Interchange (EDI): The oldest message based collaboration technology
for transmitting things like Purchase order, Advanced shipping notification (ASN), Invoice
etc.
 Portal: The company’s portal give access to it’s suppliers about delivery schedule, stock
information, quality of receipts, rejection in case there is any, payment information etc.
Supplier self service (SUS) portals are part of Supplier Relationship management solution
of few ERP vendors like SAP.
 Inventory collaboration: Most of the ERP and SRM solutions provide features like Vendor
managed inventory (VMI) for supporting inventory collaboration need.
 Collaborative Forecasting: ERP solutions provide advanced collaborative forecasting
features in its Advanced Demand Planning solution.
 Payment Collaboration - Evaluated receipts (ERS): Most of the ERP solutions support ERS
functionality where GR is settled automatically based on information received from
Supplier and payment is released.

16
 SRM 5.0 - Activities

Purchasing Contract Financial

Planning Management Settlement

Category Requisitioning Supplier

Management Enablement

Supplier Order
Qualification Management

Supplier Receiving
Negotiation

17
REFERENCES

 Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill – Chapter 23

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon

18
19
Management Information Systems
Prof. Surojit Mookherjee
VGSoM, IIT KHARAGPUR

Week 04: Product Lifecycle Maintenace

Lecture 05 :
 Product Lifecycle Management

 Product lifecycle management (PLM) is a new set of enterprise application that

manages all data and information about a product from its initial conception to
retirement.

 Product lifecycle includes design, manufacturing, ensuring quality of the

product through out its life cycle, ensuring product safety during its usage and
finally service till the product retires from service.
 Business Drivers for PLM

Regulatory compliance pressure

Intellectual Asset Mgmt Shorter Time to Market

Shorter Product Life Cycle Competition

More Choice Innovation

Product Development had become global

Value Drivers Of PLM

 Accelerate new product  Environmental

introduction Compliance

 Drive, facilitate and

 Higher Engg Productivity capture innovation

 Reuse of Parts  Manage complete

product life cycle
PLM: Data management

Product Lifecycle Management

Portfolio Concept Production Maintenance Retirement

planning development Design
and support and disposal
Product Data / Information

• Product Plans • Product • Design / Engg • Manufacturing • Maintenance

• Performance requirements Bill of Materials Bill of instructions
specifications • CAD files (EBOM) Materials • Spare parts
• Engineering (MBOM)
• Release • Part and
Schedules material changes • Packaging
specifications • Part instructions
• Process specification
specifications
PLM need different applications to support needs of diff phases

Product Lifecycle Management

Portfolio Concept Maintenance Retirement

planning development Design Production and support and disposal
PLM Applications

• Program • Innovation / • Engg BOM • Manufacturing • AMC mgmt

management collaboration management BOM
management • Change management
• Project
management • Requirements management • Supplier part
management • Configuration management
• Design Software management • Supplier
(like CAD) quality
 Product Lifecycle Management Functionalities

Product Data Mgmt (PDM)

Portfolio / Project Integration Requirement Mgmt
Storing Product data in
Portfolio Mgmt CAD
different formats
Program Mgmt ERP
Managing BOM /
Project Mgmt Configuration / Structure
Visualization
Collaboration
Product Safety Workflow
Handling hazardous / dangerous goods Change Mgmt
Environmental compliance
PLM Functionality – Document Management and CAD Integration
Document Management
 Historically, PLM evolved from Document Management systems (and CAD Data
Management systems). The document object can have attributes, revisions, versions,
lifecycle states, approvals, controlled access, check-in, check- out, view, print, stamp,
mark-up, and so on. Document management capabilities can be used for any document
format including PDFs, office formats, JPEG, CAD and so on.

CAD Management / Integration

 PLM solutions offer out of box integration with CAD software i.e. users can accesses PLM
functions through the CAD application interface. Some of the functions supported
include
 Common parts libraries
 Check-in and check-out
 Revision and version control
 Change and Release Management
 BOM Management
 PLM Functionality – Search and Change Mgmt
Search
 One of the primary goals of PLM is to allow for reuse of information and that’s
why PLM solutions provide sophisticated search capabilities. PLM solutions can
offer different types of search capabilities like:
 Basic searching
 Parametric searching
 Search along relationships
 Full-text search

Change Management
 Change Management is another key function of PLM products. Change
Management is the process of creating a change request (can be a functionality
change ), for getting it approved, doing the change, testing it and finally
transmitting the change to final design / BOM.
Chapter 31: PLM Functionality – Manufacturer Part Number and BOM Mgmt

Manufacturer Part Number (MPN)

 This is mainly for managing purchased parts.
 A manufacturer part number does not appear in company’s Bill of Material.
 This linking is sometime required to quickly order a supplier a particular part and to
avoid collisions when two manufacturers coincidentally use the same number for two
different parts.
 MPN functionality helps in this.

Bill Of Material Management

 BOM Management capability includes building BOM structures, adding or removing
parts, comparing BOMs, and managing BOM changes and transformation through their
lifecycle.
 PLM systems help in transformation of a CADBOM to EBOM (Engineering BOM) to
MBOM (Manufacturing BOM).
 PLM systems can manage complex BOMs through their lifecycle and configuration
changes.
 PLM systems also have the ability to manage configurable options within a BOM.
 PLM systems also support BOM Cost Management through different BOM comparison.
 Chapter 31: PLM Functionality - Product Visualization, Requirement Mgmt

Product Visualization
 PLM solutions provides a dynamic view of the product’s 3D CAD model
 While designing, the designer can manipulate his inputs and based on that can simultaneously see
it’s effect.
 This helps in designing in an interactive mode where he can play with lot of parameters and can
always see the effect immediately.

Requirements Management
 A new product always starts with a set of requirements. Functional requirements describe product
behavior. Non-functional requirements describe how well this behavior should perform.
 A PLM system can manage requirements like any other object type, linking many-to-many to each
other and to other requirements. So, a requirement can have sub-requirements that go into more
detail. Requirements can lead to products feature.
 PLM systems manage all requirements through revision control and change management.
 Chapter 31: PLM Functionality - Program and Product Management

 A program is basically a collection of projects so there can be a program at a

product level or a product family level that has multiple projects underneath.
The program is used for grouping and reporting purposes.
 A project contains tasks in a work breakdown structure, with associated
resources, durations, deliverables, and workflows.
 PLM project management supports integration with third-party project
management tools, such as MS-Project. Sometime Program Management is also
referred as Portfolio Management.
 To support Program and Project Management capabilities, a PLM system needs
to add additional object types like: Program, Project, Task, Work breakdown
structure, Resource, Calendars (based on location, user, and so on).
 Chapter 31: PLM EHS Functionality – Hazardous Material Tracking

 PLM EHS Software manages chemical inventory systems and track chemical storage (e.g.,
inventory), use, and transportation throughout the supply network and end-of-life
disposal.
 This solution ensures that the company meets regulatory requirements relating to
product safety and to the management and labeling of dangerous goods – while at the
same time protecting employees and the environment.
 PLM EHS supports dangerous goods management by enabling companies to store and
manage regulatory data, classify dangerous goods, perform checks during transport, and
compile and update dangerous goods documentation. This data can be automatically
transferred and used for packing lists.
 For any transportation channels (road, rail, sea, or air), PLM EHS ensure that shipments
comply with regulations before leaving the premises, and manage dangerous goods
storage, transportation, movement, delivery, compliance and reporting.
 Chapter 31: PLM EHS Functionality – Material safety data sheet (MSDS)

 PLM EHS solution lets the company collect and process product compliance data
automatically, enables to document product content and regulatory or sector-specific
substance lists and integrates compliance checks and analyses.
 A specification management database allows to centrally managing substance
information (including product composition).
 A global label management function supports management of many different types of
labels that can be printed directly from various business processes (for example, from
outbound delivery).
 A Material Safety Data Sheet (MSDS) documents proper procedures for handling of
hazardous materials for workers. PLM EHS software support the generation and storage
of MSDS information, such as physical data, toxicity levels, health effects/risks, remedy
requirements for spills or accidents, and storage guidelines. PLM systems make this
information readily available to workers and downstream consumers that are exposed to
these materials.
 Chapter 31: PLM EHS Functionality – Environmental Compliance

 Environmental compliance allows an organization to capture the materials that are used in their
products and track compliance against internal and external standards.

Environmental compliance capabilities maintain several types of information like:

 What is inside a part that could be a substance of concern for environmental regulatory purposes? The
view must include both on purchased parts and also about where the final product is sold.
 What are the compliance standards (for example, WEEE, RoHS, REACH) that are in effect that the Part
may need to comply with?
 Whether or the Part actually meets appropriate compliance standards or not

PLM products support compliance process in variety of ways like:

 Making sure that the latest standards are known
 Managing the process and correspondence with Part suppliers on their material content for each Part
 Performing BOM analysis to check compliance at the Product level
 Tracking the countries where products are sold
 Communicating the compliance status to suppliers, customers, and regulatory bodies
 Chapter 31: PLM Vendors

Some of the leading vendors in PLM space are listed below:

 CAD (Computer Aided Design) / CAM (Computer Aided Manufacturing) / CAE (Computer Aided
Engineering) / Document Management vendors moving into PLM space:
 PTC
 UGS
 Dassault Systémes / IBM (IBM recently acquired Dassault Systems and another PLM vendor
MatrixOne)
 Agile Software

Leading ERP vendors building PLM solution

 SAP
 Oracle
 IFS
REFERENCES

 Enterprise Resource Planning, Rajesh Ray, Tata McGraw-Hill – Chapter 31

 Management Information Systems: Managing the Digital Firm - Kenneth C. Laudon & Jane
P. Laudon