JIT’s impact on PLM and BOM management

JIT’s impact on PLM and BOM management

jit-plm-impact

JIT (Just in Time) is a well-known approach in manufacturing industry. In a nutshell, JIT is a production strategy to reduce inventory and associated cost. The philosophy of JIT is related to processing and transactions of inventories, which adds additional cost. By removal (or reducing) of inventories, you can reduce a total cost of production. You may ask me – where is product lifecycle management in this story? It sounds like completely “manufacturing problem” and something that shopfloor and suppliers network should be able to resolve. However, it is not true. In my view, there is tight connection between PLM implementation and JIT manufacturing planning.

Think about manufacturing planning and control. One of the functions is to get access to engineering bill of materials and use this information to create manufacturing plan – workcenter planning, suppliers orders, assembly instructions, etc. The efficient coordination between engineering environment and manufacturing planning is one of the key elements of successful production planning. Now, this is true for every manufacturing types. In most of PLM implementations it means the ability to send design or engineering BOM to manufacturing planners to work planning BOM. The difference come with specific of planning and manufacturing BOM organization related to JIT manufacturing principles.

So, what is the difference in bill of materials for JIT? The main one is significant reduce of bill of material levels. JIT reduce the number of part numbers planning and number of levels in BOM. Many part numbers that in traditional MRP practice are treated as in/out inventories now can be treated as “phantoms”. This is actually one of the main goals in JIT – to reduce complexity of detailed manufacturing planning. However, it brings a need to maintain more synchronized communication between engineering and manufacturing – literally between design/engineering and planning bill of materials.

In my view, the main challenge of PLM tools in JIT manufacturing environment is related to engineering-manufacturing collaboration. PLM implementation should be focusing on better synchronization of both development/engineering and manufacturing/planning. The implication in PLM – additional requirements to BOM tools and ECO management. Inefficient collaboration can raise the number of engineering change transactions – one of the most expensive transactions in every manufacturing company.

What is my conclusion? JIT makes manufacturing processes more connected and synchronized. It is obvious that JIT implementation impacts supply chain network. The operations between suppliers are getting more tight. However, JIT is impacting engineering and design processes too. Therefore, as much as manufacturing is moving towards lean principles, the demand for better engineering-manufacturing collaboration will increase. I can see it as a significant challenge in many PLM implementations. Specially it may impact BOM and ECO management tools. Just my thoughts…

Best, Oleg

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  • abhijit patil

    Traditional approach is BOM first and then Supply chain. Effective JIT demands BOM to be flexible to accommodate changes in supply conditions.
    e.g.. one might have designed BOM structure considering single supply source of say CABIN. But if “CABIN without doors” and “Doors” are supplied by separate vendors/locations (because of any reason), BOM structure need to accommodate it .It may be addition or deletion in part numbers, another BOM level or etc. For tight integration, same updated BOM needs to flow to lot of other consumers of it like finance, services, spares, quality, etc.

  • abhijit patil

    Having JIT in place, How do I build a BOM structure which would facilitate forming a logistic kitting of components in any given assembly shop?

  • beyondplm

    Abhijit, I think you are spot on the flexibility of BOM management. Different BOM configurations, structures and transformation are key to support effective JIT and supply chain.

  • beyondplm

    I’d say, this is what PLM/ERP BOM tools should support. Flexible structures and transformation is probably the most important one.