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Bill of Materials

When BOM is not BOM

by Oleg on December 17, 2014 · 0 comments

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Bill of Materials (BOM) is a central part of everything in product development. Sometimes, people call it product structure. Manufacturers are using BOM to define list of raw materials, parts and sub-assemblies with corresponded quantities need to manufacture a product. This is over simplistic definition. As usual, devil is details and BOM story is getting quite complex. Depends to whom are you talking, people see a different aspects of bill of materials – sales options, design hierarchy, product configurations, manufacturing process, service parts. Many systems are defining BOM differently. It depends on their roles and functions in overall product lifecycle.

In one of my recent articles – Thoughts about BOM ownership, I discussed some ideas about how BOM can be shared among organizations and enterprise software tools. That was my attempt to think about how to resolve a conflict between two major BOM stakeholder – Product Lifecycle Management and ERP systems. The BOM management landscape in the organization is complex. In my view, companies are not ready for a single BOM management tools - it was my observation 2 years ago.

At the time a major BOM master ownership dispute is between PLM and ERP vendors, I can see an interesting trend which can put some lights on how PLM companies are articulating their BOM strategies.

Dassault Systems ENOVIA is coming with their “zero BOM error” strategy. I posted about it earlier – PLM and Zero BOM errors: the devil is in details. In a nutshell, ENOVIA is trying to improve process of Bill of Material generation by direct connection between CATIA design and product structure. In my view, it might lead to potential formal elimination of EBOM, which will be replaced by a bundle of design and engineering information. Practically, product structure in CATIA/ENOVIA will represent everything that happens on engineering level. According to ENOVIA strategy, it will eliminate errors between design and engineering.

In parallel, I’m observing the way BOM is positioned by Siemens PLM. Teamcenter blog – Introducing BOM management speaks about BOM information as a vital part of many processes supported by PLM. I found interesting how “BOM management” term was replaced by “Product definition”. Here is the passage:

I just noticed that as I am writing this I am using the words “bill of materials” less and “product definition” more. I would go back and correct – I wanted to keep it a surprise!  But I think it’s ok – it helps me get to this next part. To us, it has become abundantly clear that one of the problems that come up when you talk about bill of materials (BOM) management is that the scope of what people might mean is so broad. To call all those things listed above “BOM Management” is not sufficient.  We’ve collected these capabilities into an umbrella we call the Integrated Product Definition. This is an area where we have been leaders, and it continues as a high priority for us – we have the breadth and depth to address these issues like nobody else can.

In both situations, I can see a strategy by PLM vendors to redefine BOM and bring up the extended value PLM environment for customers. This is a very important transformation in my view, since it helps to streamline processes. The problem of synchronization between design and engineering environment is well-known and not solved in many companies. Teamcenter is connecting BOM management into varietly of topics such as part management, master data management, configuration management, coordinate change and variability and others. It helps to create a solid platform to manage product data.

However, the biggest fight over the BOM is between PLM and ERP environments. Engineering.com outlined it in their article – The next big boom in PLM is a battle over MBOM ownership. Muris Capital Advisors outlined the sam conflict in the blog post – The Battle for BOM Control. According to Bruce Boes of Muris Capital, service integrators will play a leading role in making alignment between PLM and ERP and forming BOM master model. Here is an interesting passage:

We predict that System Integrators have a unique opportunity and from our recent experience, the desire to bridge the gap and add value during integration with the BOM as a key point of integration.  In doing so they open the market for process consulting and integration services surrounding the master model concept. 

The last one make sense. In many PLM implementation projects, SI teams are actually leading development of PLM-ERP integration on site or using different middleware or integration toolkits. Unfortunately, the cost of these implementation is high and overall process is very complex.

What is my conclusion? PLM vendors redefining BOM by tight integrating of product information into development processes. From what I can see, both Teamcenter and ENOVIA are trying to redefine Bill of Material (BOM) as a wider topic. This is an interesting strategy to fight over MBOM ownership. Integrated “product definition” can help to streamline processes between engineering and manufacturing. However, the end game should be total BOM experience including all manufacturing aspects – manufacturing process planning, cost and orders. The last one brings PLM-ERP integration topic back on the table. Just my thoughts…

Best, Oleg

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MBOM (Manufacturing BOM) is a tough problem. Initially, you might think about it as an easy problem. Especially, since companies are managing MBOMs in MRP/ERP systems for a while. However, I think, the time when MBOM was simply originated in MRP system to fulfill demand planning and production orders are gone. And it brings lot of questions and, raise attention from software vendors and implementers. PLM vendors are in the first line of companies demanding the change in the way MBOM is handled.

MBOM is really hard if you want to keep it in sync with rest of product data in engineering and manufacturing. It starts from the moment of time, you understand that your engineering BOM and manufacturing BOM are not the same thing. I touched it earlier in my post – 4 reasons why is hard to deliver MBOM in PLM. The initial creation of MBOM can be technically straightforward. It mostly end up by adding date effectivity element into BOM structure. Within time it gets complicated. And one of the main reasons is synchronization of data. It goes mostly around management of engineering change.

MBOM is a central place to capture the impact of engineering changes and to insure changes are managed correctly and reflected into manufacturing process with relevant dates and references to engineering data (EBOM). The priority of changes are not equal. Organization must handle these priorities and it can result in significant cost differences. Fundamentally you can think about mandatory changes and optional changes. The first one is the change organization will be implementing at any cost. It usually result of failures and regulatory changes. The second one is more interesting. This is where all new development, innovation, design improvements, cost reduction and other things are coming. This is a place where play with effectivity date can be tricky and complex. The sequence of steps are as following:

1- Engineering release or ECO transmit the data about changes in EBOM, which serve as a source of change and provides all required engineering information

2- Manufacturing should introduce these changes into planning process. Timing is important and this process is formal. Some of companies connect it to so called MCO process.

3- All dependencies must be discovered and reflected in changes of MBOM and manufacturing planning.

The last step brings a significant complexity. Engineering information (as it comes from EBOM) often comes incomplete and doesn’t contain all data that must be reflected in a change. There are multiple reasons to that, but in general, engineering view of a product is different from manufacturing one. One of the most typical examples is related to part interchangeability. But, I can see many others too. To synchronize changes between EBOM and MBOM is very complex. However, this complexity and challenges can turn MBOM into next cool thing in PLM.

What is my conclusion? EBOM to MBOM synchronization is a complex process that requires significant data manipulation, data discovery and careful operation. It cannot be automated and it requires a lot of consideration from engineering and manufacturing people. The complexity of modern product and manufacturing processes are introducing the new level of challenges in the way to manage EBOM and MBOM. This sync is critical and companies are demanding tools that can help them to handle it in the right way. Just my thoughts…

Best, Oleg

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Data ownership is an interesting topic. Our life is getting more digital every day and we are asking many interesting questions about who owns data about us. Who owns the data about our Facebook profiles, who owns social media data we created and many others. While still there are some gaps in understanding who owns the data about our digital life, when it comes to business use cases, the things are also very complex. Ownership of information is one of the most fundamental things in enterprise business. Engineering and Manufacturing companies are living it every day. If you deal with enterprise data, you are probably familiar with the term – master data. Usually it leads to many discussions in organization. Who owns the master data about design, bill of material, item, etc.

These are questions that need to be answer to allow to enterprise system to functioning properly. In one of my old posts I shared my view on Ugly truth about PLM-ERP monkey volleyball. Until now, the demarcation line of engineering vs. manufacturing was somewhat acceptable in most of the situations. I tried to capture this status in my Thoughts about BOM ownership article. However, things are going to change.

PLM and ERP are getting into new round of debates about ownership of data. It comes as a question raised in engineering.com blog – “PLM should take over ownership of the manufacturing BOM too”, says Siemens PLM’s CEO, Chuck Grindstaff. Navigate to this link to read the article. Management of EBOM and MBOM as well as many other BOMs is a very complex problem that cannot be solved in an easy way. One of the key problems is the need to synchronize information between BOMs. However, synchronize is probably a wrong word. These BOMs are not identical and requires application of very tricky logic to keep them in sync. To solve it is a big deal for many companies and they will demand it from vendors. Therefore, I’m very confident that, after all, PLM vendors fight over BOM will require to solve data synchronization problems.

At the same time, manufacturing is changing. One of the most visible trends in manufacturing is mass customization. We are moving from mass production methods toward total customization. The demand for configuration is growing and customers are requiring sophistication of engineering to order manufacturing processes applied to a broader range of products and services. Bill of materials is a center piece of these processes. What was done before by configuring a small set of preconfigured modules won’t work in a new reality of manufacturing and mass customization.

My attention was caught by a set of articles about Mass customization by Kalipso. One of them was published on Innovation Excellence blog – Modern Mass Customization – Rule 3: Honor the Order, Abandon the BOM. These articles are worth reading. Here is my favorite passage that outlines a special role of BOM in mass customization manufacturing process:

The relevance of the BOM greatly diminishes as a company transitions to a ‘to-order’ product offering. For mass customizers, a Bill of Materials, or more appropriately, a Bill of Modules, is a transient artifact. It is entirely possible that a given BOM may only be built a single time, and for a single order. Mass customizers should shift their perspective of the BOM from the identity of the product, to the technical details of the order. The identity of the product then becomes the governing logic that permits a range of configuration possibilities.

As the purpose of the BOM changes, so changes the purpose of PLM and the systems that support it. Rather than originating in PLM, BOM details originate with the order itself, ideally using a customer-facing product configuration system. As long as the order and corresponding BOM are compatible with the business rules that govern configurations, these details can be passed on directly to production systems for manufacturing (ERP, MRP, MES) without making a pit stop at PLM. PLM thus transitions from a tool for managing the lifecycle of a BOM, to a tool for managing the lifecycle of modular components that are used by the configurator.

I’m not sure about “abandoning the BOM”. However, article made me think about some elements of BOM management that are going to change. One of them is granularity of BOM. What I can see is the overall transition of BOM management into more granular process of configured components. In order to do so, PLM and ERP will have to re-think the way ownership and synchronization is happening. The question of “ownership” of granular product definition is getting less relevant. To manage smooth synchronization process is much more important.

What is my conclusion? Modern manufacturing trends are going to transform enterprise systems as we know them. Mass customization is one of them. PLM and ERP are two main systems that involved into process of engineering and manufacturing. To support mass customization product engineering and manufacturing these systems will have to interplay in a completely different way. In my view, the demand to support mass customization and other complex manufacturing processes is leading PLM vendors to want MBOM badly. However, here is change that can come as a result of rethinking of BOM management. In the future, Bill of Materials should not be owned, but intertwined and shared between PLM and ERP. Ownership of data will become less relevant. The new reality of data sharing and collaboration is coming. Daydreaming? Just my thoughts…

Best, Oleg

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PLM vendors’ fight over BOM will require to solve data synchronization problems

November 10, 2014

Engineering.com article by Verdi Ogewell earlier today is introducing a next step of PLM vs. ERP battle for ownership of manufacturing BOM. Navigate to the following link to read a very provoking interview with Siemens PLM CEO Chuck Grinstaff who says – “PLM should take over ownership of the manufacturing BOM too“. I’ve been writing about […]

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Multiple dimensions of BOM complexity

October 15, 2014

Bill of Material topic is getting more attention these days. No surprise. BOM is a center of universe in manufacturing (and not only) world. People can disagree about terminology applied to BOM management. Depends on a specific domain people can call it part list, specification, formula. But at the same time, everybody speak about the […]

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MBOM collaboration and cost of change

October 9, 2014

The only thing that is constant is change. This is very much applies to everything we do around BOM. Engineering and manufacturing eco-system are full of jokes about engineering changes. You maybe heard about renaming “engineering change order” into “engineering mistake order” as well as the correlation between number of engineers and number of ECOs […]

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How long will take GrabCAD to develop full-blown PLM solution?

August 18, 2014

Time is running fast. It has been two years since I posted GrabCAD: from Facebook for engineers to PLM. If you are in the engineering community, the chances you will come to PLM are very high. Like in the past all roads lead to Rome, I guess all future development roads for PDM solution lead […]

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Drawing Callouts and Future Google PLM Design

June 27, 2014

For me, Google is one of the symbols of simple software design. Therefore, Google developers event is always a good place to get inspired with ideas and new technologies. Google I/O was this week in San Francisco. I had now chance to attend the event, but was able to watch video streaming of keynote and […]

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PLM, demolished silos and closed BOM loop

June 24, 2014

Product development and manufacturing is getting more complex every day. The complexity comes from both direction – product definition complexity and globalization in manufacturing, supply and customer experience. As we move towards future cloud software, the importance of data platforms is growing even more. For the last 15-20 years, we are living in a realm of […]

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Why BOM Management Is Complex?

May 12, 2014

My last post about Manufacturing BOM raised few interesting comments online and offline. One of them by Jos Voskuil  was pretty straightforward – “What is a big deal about MBM”? Jos pointed me on his earlier post – Where is MBOM? This post as well as few other articles I posted earlier - Why companies are not ready […]

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