Back to basics: Should PLM Take Control of Your BOMs?

I got a comment on my blog yesterday stating “back to basics”. Why do we discuss advanced stuff at the time very basic issues are still open and require our attention? At the same time, I had chance to see Arena’s web site is stating about “control of the BOMs”.

So I decide to ask you – should PLM take control of the Bill of Materials in the organization?

In the past, I discussed various topics related to Bill of Materials. If you are new on my blog, you may consider to check the following posts:

When BOM seeks the right enterprise nanny…
Seven Rules Towards Single Bill of Materials
How we can socialize PLM Bill of Materials?
Is it time for a synchronized Bill of Materials?
Improve organizational performance by the management of multiple Bill Of Materials
and some others…

The question of “control” in Bill of Material space is related to the organization of different functional process spaces. Normally, they represented by a different department in the organization. Those organizations that have rigid borders between departments will continue to like an idea of control everything belonging to their department. However, some ideas about horizontal integration can lead them towards better integration of BOMs.

So, there are two fundamental options I can see:

1/ Split Bill of Materials between functional processes
2/ Lean organization of Bill of Materials as a single entity

I don’t think there is a solid decision these days about what to choose and how to manage Bill of Materials. However, I think there is a strong tendency to “lean” in the organizations. Multiple business systems and their respective marketing department will continue their war for market share. For me, the question of “control” will become less relevant and question what you can do and how you get value of product data can be considered as a more interesting problem.

Just my thoughts.
Best, Oleg

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  • Manuel Joseph

    I am sure, i am going to learn a lot from you. 🙂
    Thanks Oleg for taking your precious time.

  • Manuel, you are welcome! Oleg

  • Manoj

    Owning BOM is an open question that will bring in a tug of war between ERP and PLM system owners. The option of Spliting Bill of Materials between functional processes excites me the most whih I believe is possible. But in this world where control and power comes before “benefit to end user” that standardization can only be dreamt of. However, vendors who have both PLM and ERP products (SAP, Oracle etc) can help bring in that functional seperation and we can hope that others will follow suite…

    To end it I have a quote that I read somewhere,

    “Power tends to corrupt; absolute power corrupts absolutely.”

  • Jeff Tate

    I think the answer should start with the answers to the following questions.
    1. Who is blamed if the BOM is wrong?
    2. What system is the BOM created in?
    3. Does your business get value out of the 3D models to validate design, assembly processes, service, etc?

    If your answers are the same as my company (Engineering, PLM, and YES), then the BOM should be controled in the PLM system. The first two questions are fairly self explanatory. The last question is typically less understood. For 3D models to flow and be used through the value chain, positional information, alternate geometry, simplified models, etc must be integrated into the BOM. ERP system are not designed to manage this information.

    So,for me the PLM should manage/control the BOM in the context of the sale options or feature codes and pass this information to the ERP system to take orders, manage demand, control the movement of materials, and doing the accounting functions.

  • Manoj, great quote. I like it. The biggest problem of functional separation as I can see it is in following cost of integration. This is something that burden manufacturing a lot in enterprise systems. Oracle and SAP are trying to resolve it (by Oracel AIA and SAP netweaver). In most implementations, I’ve seen integration between functional domains is a mess and required a lot of work, money and efforts from implementation side. Single integrated BOM is an interesting option, but requires people to agree about how they will work together. Best, Oleg

  • Jeff, thank you for your example. This is definitely the case when I think the value of PLM dominating in the organization. Do you carry multiple BOM concepts in your Bill of Materials, like Design, Engineering, Manufacturing, others? Did you make any functional split between PLM and ERP? Who “owns” manufacturing BOM? In my view, the devil in details. But what I liked is your 1st question… Best, Oleg

  • Hi Oleg,
    Don’t have time yet to put some thought on the topic now, but i’ll surely do later. it’s just to thanks you for this series of post getting back to the root problems!
    let’s solve the root problems!

    best regards,
    yoann

  • Yoann, you are welcome! I’m looking forward your comments. Best, Oleg

  • Hi Oleg-

    As always, your blog posts inspire interesting debate! I’ll attempt to take off my “Arena hat” for awhile to consider the question more broadly. I’ve worked for numerous PLM companies to date, and each had a unique view on the problem.

    In the PLM companies whose primary focus was MCAD, the BOM was always a secondary concept. For them, PLM primarily was focused on driving 3D data to all corners of an organization. Other engineering disciplines where often an afterthought to these providers. These PLM systems were best suited for mostly mechanical companies. Automobiles and aircraft were the strong areas for their PLM deployments (and with good reason!). These companies may have printed circuit boards, or software designers, in their product, but that particular discipline would be outsourced to a vendor or it would be a minor part of the development process that could easily be segmented onto an island.

    Other PLM players take a more general view of the matter, and don’t focus on MCAD alone. Companies like Agile and Matrix One (Arena fits here) focus on integrating the needs of multi-disciplinary design and sharing that information with others. There may be PCB designers, MCAD users, software developers, artwork designers and many others involved in the product design. High tech electronics, consumer goods, and medical devices come to mind here. For these companies, management and delivery of MCAD data alone will not suffice. They must capture all the design information from each of the entities, organize it in a logical way, and then manage the approval of this information prior to release to ERP. In these companies I would contend there is no way to capture all the information without a centralized BOM in PLM. Each entity may only be contributing to “their” BOM, but a global BOM is needed for release control of the full product.

    OK, so that was pretty long winded. In short, I think a BOM-less PLM can work in mechanically focused companies. There still are questions of data effectivity, dispositioning prior to release, and 3rd party data to consider (think compliance, etc), so a pre-ERP BOM would likely still be wise. For companies involved in designing products across many departments and disciplines, a pre-ERP BOM is an absolute necessity.

    For me, the real debate is to when/where a eBOM (engineering BOM) becomes the mBOM (aka pBOM, the manufacturing BOM). Some say the mBOM should only exist in ERP. I disagree, but that is a topic for another day!

  • George, Thanks for your comments! I understand where are you coming from by mentioning PLM-centric and CAD-centric. All these characteristics are belonging to my 1st option. You are trying to split BOM between functional/process domains. The alternative is to break walls and to have one lean BOM. In this case, you can forget about ownership and belonging of BOM to the specific system. BOM belongs to the organization. What do you think about this option? Best Regards, Oleg

  • Hi Oleg, I agree with you that the BOM belongs to the organization. No single entity owns it, all contribute to it, and it (along with the supporting documents & approved sources) is the DNA of a company. I’d contend it is the most important asset – above all others. Happy Holidays!

  • George, Agree. However, unfortunately I can see how different functional teams (divisions) in an organization are trying to split BOM in separate pieces. Happy Holidays! Oleg

  • Reblogged this on prasadghole and commented:
    PLM and PDM demystified

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