Mass customization is the real reason for PLM to want MBOM

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