9 Semiconductor and Electronics Manufacturing Challenges Solved By PLM-ERP Integration

Semiconductor and electronics manufacturing is a complex and highly technical process that involves multiple stakeholders. One minor data error or miscommunication could cost your business plenty of money and time to fix the damage.

So how can you overcome the challenges plaguing the semiconductor and electronics manufacturing industry today? Simple – by connecting your design, engineering, and manufacturing worlds with a PLM-ERP integration solution.

This article will share the everyday challenges of semiconductor and electronics manufacturers and how to quickly solve them by integrating your PLM and ERP systems.

The role of PLM and ERP in semiconductor and electronics manufacturing

Product Lifecycle Management (PLM) and Enterprise Resource Planning (ERP) are two systems used in semiconductor and electronics manufacturing. PLM focuses on managing the entire lifecycle of a product, from initial design to manufacturing, while ERP focuses on handling the resources needed to produce and distribute the product.

Integrating PLM and ERP systems in semiconductor and electronics manufacturing is crucial as it helps streamline the entire manufacturing process, enabling companies to operate more efficiently and effectively.

Let's dive deep into how PLM-ERP integration can address some common challenges of the semiconductor and electronics manufacturing industry.

9 key challenges in semiconductor and electronics manufacturing solved by PLM-ERP integration

Challenge 1: High manufacturing complexity

The semiconductor and electronics manufacturing process involves many steps, each of which must be carefully controlled to ensure high-quality results. For instance, miniaturization is rising, with customers demanding smaller, more powerful electronic devices requiring ever-smaller transistors. This makes the manufacturing process highly complex.

Solution: PLM-ERP integration improves collaboration to reduce process complexity

PLM-ERP integration enables better collaboration between design, engineering, and manufacturing teams. By providing a single source of truth for product data, teams can work together more effectively, reducing errors and improving efficiency.

Challenge 2: Supply chain disruptions

The COVID-19 pandemic, digital transformation, and remote work have accelerated the semiconductor demand. This rise in demand can only be met by involving different suppliers and partners, who must be carefully managed to ensure the timely delivery of materials and components. Any lag in communication or information exchange directly impacts the supply chain.

Solution: PLM-ERP integration eases supply chain management with real-time data

With PLM-ERP integration, real-time data sharing becomes possible, which helps in making informed decisions about production, inventory management, and supply chain planning. You can manage your suppliers and transport more effectively and reduce the risk of delays.

Challenge 3: Increased costs

Semiconductor and electronics manufacturing is expensive and requires significant investments in equipment, facilities, and materials. Any inefficiencies or waste in the process due to product data errors can significantly increase the cost of production.

Solution: PLM-ERP integration lowers costs by decreasing data errors and duplication

Integrating PLM and ERP systems can help reduce errors and duplication in data entry, as the systems share a common database. This leads to improved accuracy and efficiency — lowering the costs of fixing faulty products.

Challenge 4: Localization and regionalization

With changing global macroeconomics and geopolitical factors, the semiconductor and electronics industry is facing a chip supply shortage. The geopolitical disruption, high inflation, rising interest rates, and climate policies have pushed semiconductor companies toward regionalization instead of globalization. Governments are encouraging local manufacturing of semiconductors while depending on other countries for product design.

Solution: PLM-ERP integration helps localization by importing design data

PLM-ERP integration is the union of the two critical databases for design and manufacturing. The integration can take the product design data (in the PLM) and distribute it to multiple manufacturing organizations or legal entities. This allows countries to localize and regionalize semiconductor manufacturing with an external design dependency.

Challenge 5: Prolonged time-to-market

Downtime at any point in the semiconductors and electronics manufacturing process represents a financial and material cost. Manufacturers must be able to develop and produce new products quickly to stay ahead of the competition. However, following unreliable manual processes increases the time needed to process semiconductor and chip-based devices.

Solution: PLM-ERP integration quickens time-to-market by streamlining processes

Integrating your PLM system with ERP can help you bring new products to the market faster by automating and digitalizing the design and manufacturing process. With improved efficiency, you can reduce the time and cost required to introduce new products.

Challenge 6: Low throughput yield

The throughput yield or first pass yield of semiconductor manufacturing, which is the percentage of good chips produced, is essential to profitability. Achieving a high yield can be tricky due to the complexity of the process and can lead to errors or defects in the final product.

Solution: PLM-ERP integration increases yield with better visibility

PLM-ERP integration provides complete visibility of the product throughout the manufacturing process, from raw material procurement to product delivery. This helps you identify and address problems quickly, subsequently reducing waste, improving quality, and increasing throughput.

Challenge 7: Quality control and compliance

The semiconductor and electronics manufacturing industry is subject to strict regulations and standards regarding product safety and quality control. If the necessary compliance is not met, especially if you have a global presence, it could lead to legal issues and bring your production to a standstill.

Solution: PLM-ERP integration helps in quality and compliance with enhanced traceability

PLM-ERP integration can help ensure regulatory compliance by providing end-to-end, traceable product information throughout its lifecycle. Additionally, product data quality is guaranteed with checks done to validate data that moves from the PLM to the ERP.

Challenge 8: Intellectual property theft

The semiconductor and electronics industry is highly competitive, and intellectual property disputes can be a significant challenge, particularly for smaller companies. With the looming risk of IP theft, the semiconductor intellectual property (SIP) market is projected to grow at a CAGR of 6.2% by 2026. If the original product designs are not well documented, you cannot claim ownership and risk losing IP.

Solution: PLM-ERP integration safeguards IP with data security

Connecting your PLM and ERP systems through a cloud-based integration ensures all your product data is well documented and accounted for. With well-connected systems in place, your product documents and IP can be retrieved easily, helping you prove ownership.

Challenge 9: Limited ability to forecast customer demand

According to Gartner, worldwide semiconductor revenue is projected to decline by 3.6% this year with different demands from consumers and enterprises. With a high demand for custom products, it is challenging to forecast demand accurately and handle inventory. Additionally, large amounts of data are generated daily, which can be difficult to manage and analyze.

Solution: PLM-ERP integration helps forecast demand with one version of the truth

By integrating PLM and ERP systems, you can better forecast demand and optimize inventory levels, reducing the risk of excess inventory or stock shortages. Having a centralized system for collecting data, you can choose to analyze it and gain valuable insights that can be used to improve the manufacturing process.

Want to get started with PLM-ERP integration for your manufacturing business?

Integrating your PLM and ERP is a good way to start if you want to address all the above-discussed challenges. The key to better manufacturing management is efficient communication and information exchange where all parties can instantly send and receive data — and PLM-ERP integration's biggest benefit is streamlined communication.

As a manufacturer in the semiconductor and electronics space, you will gain multiple benefits with a PLM-ERP integration solution. A PLM-ERP integration solution can help your semiconductor and electronics manufacturing business address the challenges of complexity, cost, time-to-market, and supply chain management. By having a complete view of the manufacturing process, you can improve collaboration, visibility, and efficiency and stay ahead of the competition in this fast-paced industry.

If you want to invest in an intuitive, easy-to-use integration solution, explore our preconfigured PLM-ERP integration solution for Microsoft Dynamics 365 Finance and Supply Chain Management.

With an experience of 18+ years, we at To-Increase have helped several global manufacturing enterprises integrate their PLM systems with Dynamics 365 ERP.

We offer out-of-the-box PLM integrations for Siemens Teamcenter and PTC Windchill, and a configurable PLM integration framework for other PLM, PDM, or CAD systems.

Check out the solution factsheet to explore more about our PLM-ERP integration solution's benefits, features, and offerings.