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BOM

When BOM is not BOM

by Oleg on December 17, 2014 · 0 comments

walks-like-BOM-quacks-like-BOM

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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nike-custom-shoe

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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Thoughts about BOM ownership

by Oleg on November 20, 2014 · 2 comments

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The Engineering.com publication about PLM taking ownership of MBOM ignited few discussions online about Bill of Materials, BOM Management and co-existence of multiple enterprise systems. My first thought was that all of them will have to rethink the way BOM is synchronized between systems. This is not a new problem. Any implementation of enterprise PLM is facing this challenge. Pumping BOM between PLM, ERP and other systems is costly and complex process. But the reality – this is the only practical way to do so.

I went back in my old writing to find some recommendation how to make it easier. My old blog post five years ago, speaks about Seven Rules Towards Single Bill of Materials. To me, all recommendations are still very relevant. Following them can make your “BOM synchronization” problem less painful. Almost at the same time, Jim Brown of Tech-Clarity also shared his thoughts about single BOM: Single Bill of Material – Holy Grail or Pipe Dream? I liked Jim’s thought about Single BOM vs. Associated BOM. Here is a passage I liked:

Companies have spent a lot of time and effort making logical connections between different BOMs, and developing tools to help develop and synchronize different BOMs. For example, PLM, MPM, and Digital Manufacturing software helps companies translate an engineering BOM into a manufacturing BOM and then further into a BOP. In fact, they have gone further upstream to match conceptual BOMs and requirement structures downstream to BOMs. Maybe you would call these “workarounds” to the real answer of a single BOM. But I would propose a different view based on history and my observations. Perhaps engineers have done what we do best – addressed the problem in the most practical way as opposed to the most elegant way to solve a problem.

At the same time, single BOM or Associated BOM is hard. It requires many points of synchronization between departments and processes. Therefore, I still keep my opinion that most of companies today are still Not Ready for Single Bill of Materials.

So, what to do? How to make an improvement? Do you think fight for MBOM as it mentioned in Engineering.com article is the only way? I tried to visualize the picture of different BOMs and present it together with how PLM and ERP ownership is distributed. Take a look on the picture below.

PLM-ERP-BOM-Ownership

There are paces where each systems claims their benefits. At the same time, there are places where ownership of bill of materials and related product information can be different. The touch point is manufacturing BOM. I still believe, this is the next cool thing in PLM – how to manage MBOM.

What is my conclusion? I think both ERP and PLM vendors need to take a step back. Data ownership was a fundamental part of any enterprise business strategy for the last 20 years. Maybe, this is a time to change data ownership approach? Maybe it is a time to think about better data synchronization and transparency. How we can help people to collaborate alongside the product development process from design to management and to support and services? Just my thoughts…

Best, Oleg

photo credit: mrxstitch via photopin cc

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Tesla, iPad on wheels and BOM management complexity

October 28, 2014

The complexity of manufacturing is skyrocketing these days. It sounds reasonable for many of us when it comes to spaceships, jetliners and defense systems. You can think about car as something much simpler. Navigate to Ford Heritage website article – Ford Celebrates 100 Years of the Moving Assembly Line. The complexity of Ford Model T […]

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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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Manufacturing BOM dilemma

October 8, 2014

Manufacturing process optimization is one of the biggest challenges in product development these days. Companies are looking how to low the cost, optimize manufacturing process for speed and to deliver large variety of product configurations. The demand for these improvements is very high. The time when engineering were throwing design”over the wall of engineering“ is over. […]

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How many parts will be in a 3D printed vehicle?

September 16, 2014

3D printing is buzzing trend these days. If you are not up to speed with the trend, you probably should. Because it changes everything around. Start today from Wikipedia article about 3D printing (aka as additive manufacturing). Today’s announcement about GrabCAD acquisition by Stratasys- leading 3D printing company is another confirmation about important role additive manufacturing […]

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PLM and Zero BOM errors: the devil is in details

September 10, 2014

To manage Bill of Materials (BOM) is not a simple job. Often you can hear a simple definition of bill of material as a “list of component needed to build a product”. However, in reality, BOM is much more complex and contains information about product structure, the ways product is manufactured, maintained and even disposed. […]

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Apple iPhone 6 and and cross product families BOM planning

August 18, 2014

To manage Parts and Bill of Materials is not a simple tasks. I shared some of aspects related to the complexity of Part Numbering last week in my post – Existing data prevents companies to improve Part Numbers. The discussion in comments took me towards the complexity of Part Numbers in supply chain. Here is […]

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Existing data prevents companies to improve Part Numbers?

August 15, 2014

Part Numbers is a fascinating topic. I’m coming back to blog about what is the best approach to manage Part Numbers. My last post about it was – Part Numbers are hard. How to think about data first? was just few weeks ago. In that article, I outlined few principles how to keep PN separate from […]

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