Manufacturing Bill of Materials or MBOM. Where it belongs and how to support it right? Does it part of your ERP system? PLM system? Is it a piece that normally fails between chairs of engineering and manufacturing? In PLM development, manufacturing BOM is usually a piece of functionality that raises lots of disputes and inconsistencies. PLM vendors usually put MBOM as part of the overall PLM solution. Few links can lead you to Windchill MPMLink product or TeamCenter BOM Management system.
The discussion around Manufacturing BOM is quite hot in blogosphere. I found few interesting articles and references on management of Bill of Materials vendors related as well as independent consulting vendors and bloggers. I found the following two publications outstanding in the whole list of BOM debates and posts. Jos Voskuil (aka Virtual Dutchman) posted analytical article asking a simple question “Where is MBOM?“. This is a question customers are probably asking the most. Where do we need to plan our MBOM implementation? Is it part of PLM? Is it part of ERP? The following passage is a try to answer on the question. It sounds to me like no answer.
Ask yourself as a company ” where do I handle the MBOM ?” Some of you might say, we do not have an MBOM as our EBOM with some modifications is already good enough for manufacturing. Many companies might say, we manage the MBOM in the ERP system as this is (was) the only system we had where we could define such structures. These companies are candidate for improving their Concept to Manufacturing process, as for sure either users or working methods are compromised to work with the MBOM in the ERP system. Yes, as ERP systems are built to schedule and execute the production of well defined products in the most efficient way. ERP systems are needed for the execution, often the core activity for manufacturing systems. PLM systems are reason that ERP systems can execute, they bring the product definition and information to produce a product. And in case the company designs and manufactures excellent and innovative products the future is bright.
Another interesting publication on the same topic came last week from Arena blog. Navigate your browser to read – Manufacturing BOM: Critical for Successfully Building a Product. I like the way this article presented the importance of MBOM. Here is my favorite passage.
The manufacturing bill of materials drives manufacturing, operations, purchasing and logistics for a product. The information from the MBOM feeds the business systems used to order parts and build the product. These include enterprise resource planning (ERP), materials resource planning (MRP) and manufacturing execution system (MES) solutions.Inaccuracies in a manufacturing BOM lead to problems: If the wrong parts or wrong quantities of parts are ordered, a company will not be able to build enough product—or any product at all. This leaves the company with unusable components that need to be returned or extra parts that tie up money in inventory. For manufacturing and operations departments that are already running lean, cleaning up these mistakes is a hassle that wastes time and money. Depending on the size of the original mistake, the amount of money lost could be large enough to impact the company’s bottom line.
The assumption of Arena (at least how I understood it) is that MBOM managed by PLM system. The fact MBOM feeds business systems – ERP, MRP, MES and other system create significant dependencies on an accuracy of MBOM. I posted few times about MBOM. You can refresh your memory by navigating to PLM and ERP: Why it doesn’t fit? and the discussion about how to create a single BOM in the company – Seven rules towards single Bill of Materials.
All the above made me think about what are main reasons that prevent PLM vendors to deliver a successful MBOM in PLM and why manufacturing BOM is always an issue in most of PLM implementations.
Here are my 4 reasons:
1. Most of PLM implementations starts from CAD/EBOM. This is a typical PLM implementation route in many companies. CAD data management, Bill of Materials – document BOM, engineering BOM, change processes (ECR, ECO) and … MBOM.
2. Engineers are not taking care of MBOM. Manufacturing BOM is less related to engineering work. Usual “bad” engineering practice is to forget about manufacturing work and to come very late to implement the overall BOM management solution. The trend is to have an integrated solution, but changes happen very slow.
3. Structure synchronization is messy by definition. In order to keep multiple BOMs synchronized (inside one system or multiple systems), PLM vendors developed multiple synchronization tools. Industry didn’t invent any better option, but synchronization tools usually not good (by definition) and brings lots of complexity in the engineering to manufacturing process. MBOM is a key part of this process.
4. To get data about manufacturing parts is painful. However, any PLM implementation required to do so in order to deliver an efficient MBOM solution. Without that, PLM manufacturing implementation is very limited and can end up by serving as “yet another data silo”.
What is my conclusion? Manufacturing BOM is very important to deliver a PLM value “beyond engineering”. The complexity of data and systems make it complex to deliver. This is one of few solutions that has no shortcuts. You need to get data from ERP/MRP system and you need to blend it with your best engineering effort. I think, an efficient MBOM solution today is mostly service and consulting project combined with significant integration solution in place. A good place to innovate. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networks. My opinion can be unintentionally biased.