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If you are in PLM business, I’m sure you are familiar with term called “best practices”. The term is widely used to explain how PLM system can be deployed, how to manage data and how to organize and optimize product development processes. So, where are roots of PLM best practices and why PLM vendors like them so much? Remember, the original PLM (and even PDM) systems started as a glorified data management toolkit with elements of CAD and ERP integrations. To get such system in product was very expensive and it required lot of time and implementation services. The reason is simple – every manufacturing company is different. It takes time for service provider to understand company landscape, processes, data requirements, legacy systems and suggest a solution. Put heavy price tag next to this activity. You can think about this process as something similar to organizing mass production assembly line. It is costly and complicated. Once you’ve get it done, your objective will be simple – run it to the largest possible quantity without re-configuration (which will cost you money, again). The same happened with first large PLM implementations.

The invention of “best practices” helped to figure out how to move from heavy and complicated PLM assembly line to more configurable and flexible mechanisms of PLM deployment. Technologically, toolkit approach was a underline product foundation. PLM companies and especially service providers and PLM consultants liked the approach. To create OOTB (out-of-the-box) pre-configured environments was relatively easy based on the practices gathered from existing large customers. However, to get it to the field and implement wasn’t so simple. Marketing and sales used OOTB environments to demonstrate and make sales. However, implementations and fine tuning was failing to apply it after that. The implementation devil was in details and service teams were required to bring to production. Similar to manufacturing mass production environment, customizing and services was a straightforward answer to solve the problem of product and requirement diversity.

As we know from the history of manufacturing, mass customization won and left mass production system in a dust. What was clear innovation 100 years ago was replaced by new forms of manufacturing, customization and flexible manufacturing units. I believe this is still very hot topic in the industry and every manufacturing company. The diversity of product requirements is skyrocketing, product lifecycle is getting even shorter. To produce PLM system that will fit this type of environment is probably one of the most important innovation that might happen in engineering and manufacturing software technologies these days.

What is my conclusion? I think software companies can learn something from the history of manufacturing companies. The move from from mass product to mass customization is one of them. PLM software made a turn from from complicated preconfigured assembly lines to expensive data management toolkits that require services. Manufacturing is getting different these days. Next step can be hardly achieved by pure technology or process organization. My hunch it is going to be a hybrid of new data management technologies empowered by crowdsourcing and customer innovation. Just my thoughts…

Best, Oleg

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JIT’s impact on PLM and BOM management

by Oleg on February 21, 2014 · 4 comments

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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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Business is going global. It is not only for large manufacturing companies these days. As a result of cost pressure and searches for new market opportunities, manufacturing companies are looking how to optimize their businesses. Distributed engineering, manufacturing and suppliers environments – reality of manufacturing these days.

However, outsourcing and future development of supply chain also brings additional challenges. Distributed environment and supply chain collaboration bring additional level of complexity. Combined with growing regulatory requirement it resulted in significant pressure on manufacturing companies to provide transparency of product information for regulatory purposes.

CSRWire article Complying with Supply Chain Transparency: Underlying Issues Lead to Regulation Backlash brings an interesting perspective on the need of manufacturing companies to expose bill of material information across supply chain. Here is a passage I captured:

Currently, there is a gap in the product information shared between the two [contract manufacturers]. The nature of that model is such that retailers either pick from a catalog or provide product specifications and tolerances for manufacturing but never see the finished product’s bill of materials.  That becomes a challenge for documenting environmental and social compliance requirements, as the data stays solely in the contract manufacturer’s product lifecycle management system.

It made me think about how to make product information available downstream in every manufacturing organization and across supply chain. Majority of PLM systems deployed today are focusing on the needs of engineering departments. It serves product development and implementation of engineering-manufacturing collaboration. Which leaves supply chain and contractor manufacturing out of focus. Below, I outlined some functional and business requirements PLM system and vendors can follow to solve the problem of BOM transparency across supply chain:

1- PLM systems need to be deployed beyond engineering organization and become easy available for suppliers and contractors.

2- Bill of Material tools need to support product information beyond development and engineering. It raises the question of manufacturing bills and sub-contractor bills.

3- PLM business models should be adapted to serve new type of users – suppliers and sub-contractors.

According to CSRWire article, manufacturing companies are ready to pay a lot of money these days to solve regulatory compliance issues. It becomes very sensitive for small and medium size organization that cannot afford additional regulatory expenses and extensive paper work related product transparency. I liked the following quote explaining that:

If large corporations are struggling with compliance and transparency, how can small- and medium-size businesses manage these regulations and pressure? Many simply can’t afford it. It puts small and medium businesses at a competitive disadvantage. It’s a time, cost, effort and resource issue. The corporations will figure out a way to do this cost effectively. The bigger companies can help evolve the tools, systems and practices. I don’t think anyone has a comprehensive solution right now. The small- and medium-size businesses still have to comply but if we keep piling compliance cost on top of compliance cost, it becomes unsustainable.

What is my conclusion? There is an opportunity to solve regulatory problem of manufacturing companies of all sizes (and specifically small manufacturers) by providing cloud PLM system making Bill of Material transparent for everybody in supply chain of contractors and manufacturers. Two main challenges here – robust BOM tools capturing manufacturing and contractor information and easy to deploy tools with affordable licenses. The opportunity is on the table. The note for PLM vendor strategists. Just my thoughts…

Best, Oleg

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CAD, Engineers and Online Communities

February 19, 2014

Remember our life before internet? The meaning of community was about social group that shares common values. Actually, the history of communities is longer than history of CAD software . So called “Community Rules” were mentioned in one of the first scrolls found in Qumran Cave. Community word often explains common geography or environment. However, […]

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PLM, Engineering processes and flat organizational structure

February 13, 2014

Our information life is getting more complicated these days. The time when our digital channel was limited to our desktop computer gone forever. Streams of information are coming to us from every place – desktop computer (as much as we are coming to the desk), laptops, mobile devices and fast approaching us wearable devices. Info […]

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The Ugly Truth of Multi-BOM Management

December 17, 2013

Bill of Material (BOM) management is always fascinating topic. It sparks so many debates and introduce a large set of diverse opinions. I can even say that I have a special passion to speak about BOM on my blog. If you want to catch up on my recent posts about BOM, you can try these […]

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Full Product Lifecycle, Cloud and Granular Security

November 27, 2013

Security is one of the most fundamental things in enterprise systems. If you think about every enterprise system as a big data store with applied business rules, security will be the one you will need to evaluate first in order to map it to your organization. It comes in multiple dimensions about who is getting […]

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Will Tesla Motors build their own PLM system?

November 4, 2013

History of CAD and PLM development knows examples of home grown systems. 20-25 years ago, the idea to build their own CAD and PDM system was considered as an absolutely normal option. Since that time, many things changed. In my view, the last decade clearly demonstrated PDM/PLM trend towards using more OOTB (out-of-the-box) and ready […]

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Will PLM Highway Route to Cloud Corridor?

October 31, 2013

It is not unusual to hear about technological clusters these days. Cluster development emphasizes the importance of geography, or more correctly economies and/or technologies of co-located companies and businesses. In manufacturing world it very often includes suppliers or companies specialized in a specific domain or industry. Wikipedia article Business Cluster is covering the history and reasons […]

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Why PLM selection is about data access problem first?

October 29, 2013

How to select PLM? Manufacturing companies, industry pundits and vendors are trying to simplify this process. Nevertheless, after almost three decades, the problem is still on the table. PLM sales is value based and unfortunately requires to juggle too many people and events together. I see this process as a combination of technological choices, company […]

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