The role of Bill of Materials (BOM) in PLM competition

The role of Bill of Materials (BOM) in PLM competition


It is hard to overestimate the value of bill of materials (BOM) in product design, engineering and manufacturing. It is everywhere – product design and configuration, engineering, manufacturing, operation, etc. BOM is equally important and complex. In my earlier articles, I touched multiple dimensions of BOM complexity – disciplines, product lifecycle, changes. PLM vendors are focusing on high level of integration of product information into development process. Few months ago in my article When BOM is not BOM, I touched some of aspects of BOM complexity and how it related to BOM ownership, BOM errors and future battle for MBOM ownership between PLM and ERP.

Actually, the battle between PLM vendors for superior BOM solution can be even more interesting. article – Volkswagen’s Epic Challenge to synchronize PLM for its Truck Brands brings a very interesting story about German automotive giant trying to unify PLM solution across its commercial vehicle brands. Take some of your lunch or evening time and read the article.

The example of Scania brings up the value of well integrated PLM solution to support vehicle configuration and manufacturing.

The secret to Scania’s success is a sales model where product development and modular manufacturing processes are interwoven with sales into a holistic system. The company is known for its tailor-made vehicles. Scania’s PLM plays a big role in its business model. Scania uses Dassault’s (DS) CATIA V5 while ENOVIA V5 serves as the CAD vault. PDM functionality is handled via Scania’s proprietary OAS platform which defines the rules for how the components can be assembled. The OAS works as a product database, configuration and structural control solution. CAD geometries are downloaded from the ENOVIA CAD vault in accordance with the configurations delivered by OAS. In terms of the eBOM and the mBOM, it’s once again about OAS and its couplings to ENOVIA. The company’s manufacturing solutions can’t handle many variations; you have to prepare one at a time and make them individually for each truck.

For some your it might be a big surprise, but according to the article, Excel is a key element of PLM solution used by another vehicle manufacturer. MAN is using Excel based technology to work with EBOM and MBOM.

MAN uses both Dassault’s CATIA V5 and PTC’s ProEngineer/CREO. After a succesful pilot last year that considered product development (ie, not production), the company chose PTC’s PDMLink (part of Windchill) for their CAD vault and PDM system. Configuration and structural control is principally handled via an Excel Integration with PDM Link. The eBOM (engineering BOM) and the mBOM (manufacturing BOM) are produced by PDM Link via the Excel integration, picking up the parts from the CAD vault. The implementation of PDM Link is under way but at a low speed in anticipation of a final PLM decision.

The story of MAN and Scania made me think about importance of BOM management in complex product configurations and vertical integration with manufacturing. Build to order or engineering to order environments are extremely complex and require fine tuned integration between engineering bills, configuration parameters (features) and ability to translate it into manufacturing and as-built environment.

Here is my favorite passage from article which put nail in the head of BOM importance.

BOM management issues will be the most crucial and will determine the direction the company takes. Regardless of what VAG decides to do, the gains that can be made through sharp, highly automated BOM creation and MDM (Master Data Management) solutions is significant. The advanatge of an MDM solution is that it connects the PLM, MES and ERP systems into seamlessly functioning IT units for the shop floor and manufacturing.

What is my conclusion? Platformization is one of the trends in modern PLM according to CIMdata. The example of VW shows an importance of BOM management in order to provide robust and scalable PLM solution for complex automotive manufacturing. My hunch BOM will become one of the most important weapons PLM vendors will be using to differentiate future PLM platforms. Just my thoughts…

Best, Oleg


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  • As part of my presentation at the PLM Market & Industry Forum this year, I asked the audience to name the #1 BOM tool. Audiences in Ann Arbor, Amsterdam, Pune (India) and Beijing correctly said “Microsoft Excel”

  • beyondplm

    Stan, yes…. I know the answer :). Thanks for reconfirming that.

  • My only point was the Excel is unfortunately not very rare in this application, even after the millions/billions in collective investment by the PLM Economy.

  • beyondplm

    Yep. I posted so many articles about BOM and PLM, so this is almost a rhetoric questions – why PLM systems are not good enough to replace Excel-based apps?

  • At this point you have posted so many articles on so many topics it is hard to keep track. 🙂

    Why can they not replace PLM-enabling solutions? You probably have articles on these reasons too but there are many reasons. Flexibility is probably first on my list. If the commercial solutions were easy to adapt by users (vs. by IT or consultants) it might be different. The case of Big Lever Software is relevant here. When I first heard about Product Line Engineering and the software they make, I thought to myself “can’t Teamcenter, ENOVIA, Windchill and the others do this?” The answer seems to be NO, at least not in a way that people are adopting in large numbers. While Big Lever is a small company they have gotten the attention of GM, large A&D OEMs and others, and have a partnership with IBM that was hinted at by their press release last week.

    We talk about PLM-enabling solutions being flexible (particularly compared with ERP) but they are not flexible enough to support developing and maintaining product families (like your reference suggested.

    There are many other reasons, but I will leave that to future (or past blog posts).


  • beyondplm

    Stan, thank you! Flexibility is one of the key issues why companies are using Excel. Also, there is pseudo feeling of “ownership”. Companies are afraid to stuck with PLM solutions. Actually, the example of Scania and their platform is a good one.

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