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 the passage (comments) made by Joe Barkai
…multiple BOMs with inconsistent numbering schema often hide a bigger problem: inconsistent attributes and metadata. I [Joe Barkai] worked with a global automotive OEM on issues surrounding architectural complexity reduction and global quality management. I discovered that each product line was using different part numbers. This was obviously difficult to manage from a supply chain perspective. But, not less importantly, other metadata and data attributes such as failure modes, labor operation codes and other important information were codified differently, rendering cross product line reporting and analysis difficult and potentially lacking, if not erroneous
Product lines and multiple configurations is a reality of modern manufacturing. The customization level is growing. On the other side to manage parts and BOM globally becomes one of the most important and challenging tasks. I found another example of that in today’s news . This is an example of a potential impact on Apple from management of bill of material across multiple product lines and supply chain. Navigate to Seeking Alpha post – Apple iPhone 6 Will Pick Up iPad Sales Slack. Here is the passage I captured:
Apple still generates the majority of profits in mobile, despite the slight declines in market share. Last November, research firm IHS estimated $274 in bill of materials and manufacturing costs for the 16GB iPad Air with Wi-Fi connectivity that retails for $499. Going forward, Tim Cook, operations man, will likely leverage Apple’s immense buying power to further drive down costs for component parts shared between the iPhone 6 and eventual iPad upgrade.
I have no information about PLM system used by Apple to manage bill of materials across product lines. However, I guess, re-use of components among different product lines is a very typical approach used by many manufacturing companies.
What is my conclusion? The complexity of bill of materials management across product lines and supply chain are skyrocketing these days. To manage part numbers, bill of materials, cost and multiple product lines can become a critical part of PLM solution to support manufacturing profitability. Just my thoughts…
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 surrounding data focusing on different aspects of parts – description, classification, configurations, suppliers, etc.
Yesterday, my attention was caught by ThomasNet article – Are Part Numbers Too Smart for Their Own Good? The article nailed down a key issue why companies are still having difficulties with management of Part Numbers. Nothing works from scratch in engineering companies. Complexity of characteristics and history of existing Part Numbers and products are making real difficulties to adopt new PN management concepts. The following passage explains the problem:
Another problem with descriptive numbering is that the description can become out of date and irrelevant over time. Individual parts can have their own life cycles; if a part has been identified according to the product, what happens if that product is discontinued but the part continues to be used in a newer product? Or what if a manufacturer changes vendors and the part number contains the name of the vendor that originally provided the piece?
Gilhooley admits that some Ultra Consultants clients have decided that switching from descriptive to auto-generated numbering would require too much organizational change. Some companies stick with old systems, and some opt for hybrid systems that perhaps retain descriptive numbers for existing parts but use auto-generated numbers for new parts.
It looks like there is no single solution or best practice to solve the problem. The “traditional” engineering approach to keep options to manage a diverse set company configuration looks like the only possible way to solve this problem in existing PLM/ERP systems.
What is my conclusion? History keeps customers from moving forward. There are two aspects of complexity in Part Numbers: 1/ complexity of definition and data classification; 2/ historical records of PN in every company including catalogs and existing products. Together, they create a block to make any changes in existing PN schema and prevent companies from migration towards new approaches. New data modeling technologies must be invented to handle existing data as well as supporting customers to migrate into modern PLM and ERP solutions. Just my thoughts…
We like to compare stuff. Gadgets, cars, hotels, software. We can compare iPhone to Samsung, Canon to Nikon, Honda to Toyota. Software is a special category. When it comes to enterprise software it gets even more complicated. However, marketing comparison is a fascinating type of writing. Arena PLM blog posted a marketing writing – Using Excel for Bill of Materials (BOM) Management. The article compares BOM management using Excel spreadsheets and BOM management PLM tools (Arena tools implied, which is okay). Read the article and draw your own conclusion.
I have special passion for spreadsheets. In my view, (and I know many of PLM analysts and bloggers will agree here) Excel is stands out as one of the most popular PLM software tool in the industry. I have my reasons to like PLM spreadsheets as well as list of my “hate statements” about Excel.
Arena’s article reminded me famous marketing stories about vitamins and pain killers. The first is “nice to have” and the second is “must buy now”. I think the value of PLM tools is obvious. But… here is my little “but”. If I compare lists of values, cost and features in that article, I can not come to an absolute conclusion about advantages of PLM tools. It creates some mixed feeling. First, there is no line that says “no” to any of features you can do with Excel. So, basically, I can do everything with Excel, but not in an optimal way (means I won’t die tomorrow by keep using Excel). Second, cost is emotionally on the side of Excel. It is very hard to compete with “free” that everybody can use. And, to switch to PLM tools, you need to change the way you work. Even this is not in the list, it implied when you compared “time to implement” between “immediate” and “days-weeks”. So, when you have organization using Excel and manages BOM, PLM is not in competition with Excel. This is another type of competition, which sales people often calls “competing with status quo”.
What is my conclusion? Few weeks ago, I shared my recipe how PLM can take over Excel spreadsheets. Here is the list of three recommendations – flexible data models, easy customization and excellent user experience. I’d like to add pain killers to the list. This is something that PLM is still missing in competition with Excel. The comparison should have “no/yes” notation. Today’s “poor/excellent” is still has a flavor of vitamins. PLM implementations are still hurting people and lose in the comparison to initially glamorous Excel spreadsheets. Engineers are spending too much time managing Excels, but the cost is hidden and not obvious to managers to step into longer implementations, higher cost and slow learning curve. Just my thoughts…