This video explains how permissions work in SOLIDWORKS PDM and their importance for system administration. Permissions are divided into four categories: administrative, folder, state, and transition. Administrative permissions control vault configuration tasks, while folder permissions govern file and folder actions such as add, rename, delete, or view. State permissions relate to workflow stages, requiring correct combinations with folder permissions for effective file management. Transition permissions control movement between workflow states, including options like disallowing sequential changes to prevent self-approval. Proper configuration ensures security, reduces errors, and streamlines processes for PDM administrators and users.