BOM 101: How Many Levels Do You Need in BOM?

January 30, 2013

I’m continue my BOM 101 series of posts. When working on bill of materials, you can often hear about the ability of BOM management software to support so-called "multi-level" BOM. You can search for the definition of multi-level BOM using Google and find many results. I found the following definition of multi-level BOM on Arena website quite balanced. Here is the passage from the Mult-level BOM article:

A multi-level BOM, also referred to as an indented BOM, depicts parent-child relationships and shows the hierarchical structure of assemblies and their related parts and components. A multi-level BOM is essentially a nested list whose parts or items are listed in two or more levels of detail to illustrate multiple assemblies within a product’s BOM. In contrast, a single-level BOM depicts one level of children in an assembly and only the components needed to make that assembly are listed.

In the past, when BOM was managed using paper and spreadsheets, to create multi-level BOM wasn’t a simple task. Computer systems create an opportunity to manage and manipulate easily with multiple levels of BOM. However, the question people are asking usually – how many levels of BOM do we need? This simple question is actually leads to many interesting discussions. From my practice it related to many factors. The most typical are – type of BOM (engineering, manufacturing, support), type of the product, maturity of product development and many others.

I found an interesting writeup about BOM levels in the Frank Watts’ book – Configuration Management Metrics. Navigate to the following link – I was able to access this book fragment using Google Books. Here is an interesting passage:

The tendencies of the companies to create multi-level assembly structures seems to be overwhelming. This analyst has witnessed 11 levels at a couple of companies and had a seminar attendee tell about 16 levels. Many departments wish to add structure for their apparent need and many needs are not in best interest of the company as a whole. Because agreement cannot be reached on one structure, often an "Engineering BOM" and a "Manufacturing BOM" are created. Often a material folks create "Planning BOM". Many times various department can reach agreement only by adding additional layers to the BOM.

The following diagram shows the number of levels in BOM correlated to maturity of product development. The analyst believes a better communication can be achieved by creating a BOM with minimum levels of structure.

What is my conclusion? The fact you can create multiple levels of BOM doesn’t mean you need to utilize it at full capacity. Multi-level BOMs are complicated and adding an additional work in the process of changes. How to maintain the right number of BOM levels? I’m interested to learn more about your experience. How many BOM levels do you have in your company ERP/MRP/PDM/PLM system? Speak your mind.

Best, Oleg

Investors are looking for “cool PLM kids”

January 30, 2013

For many years, enterprise was considered as a boring space. It was so much fun to talk about web, gadgets, Google and many other "cool" things. Why to get worried about enterprise application? Most of the people might think enterprise isn’t sexy thing. Isn’t it just about ERP, finance, big bosses and decisions that taken somewhere on the management floor? What was visible for the last ten years is huge technological development in the space of web, internet, mobile and consumer applications. This is what people were blogging and talking about. This is where all efforts and technological minds were striving. Consumer IT was "on fire" during the decade of 2000s. Our life and state of mind changed with web, mobile devices and other cool apps. Last year, I posted – PLM: Ugly vs. Cool. Quite many people approached me after that post. It was very enlightening to see how big is demand of people for usability, ease and simplicity of enterprise software.

Nowadays changes are coming to enterprise space too. There are many confirmation about that. I was reading TechCrunch article – The Enterprise Cool Kids. Author is speaking about growing interest of investors to enterprise space and brings long list of startup companies focuses primarily in enterprise space. Here is my favorite snippet:

But the hype is changing. Conversations about “the next Instagram” at Coupa, The Creamery or on Caltrain have been replaced with staid assessments about the future of Big Data, storage and the cloud. The mobile, social, local gold rush of 2011 has been put on pause, at least as far as consumer Internet is concerned. VCs are staffing up with enterprise experts to handle the sharp shift in focus. We’ve even heard someone was working on something described only as, “a Path for enterprise.”

Some of the technologies developed by these companies can be relevant for manufacturing, product data management and PLM. Take your time and read the article. The examples of companies and use cases are very interesting. I captured three top common differentiators among these companies – ease of use, low cost and "coolness factor" in the way these companies are solving existing problems.

What is my conclusion? I see enterprise as a very interesting place these days. The amount of unsolved problems in the enterprise space is skyrocketing. Think about mobile phone 10 years ago. Then compare it with iPhone or Android. The majority of manufacturing companies are running software developed 15-20 years ago. Excels are everywhere. Now, imagine the potential to change it. Investors are looking for enterprise experts. I didn’t find companies associated with manufacturing and PLM in the TechCrunch list of enterprise cool kids. So, quest is open. We are going to see "cool PLM" coming sooner or later. Just my thoughts…

Best, Oleg

picture courtesy of TechCrunch article.

PLM, Viral Sales and Enterprise Old Schoolers

January 28, 2013

I was in the air during this weekend. Literally… Long flights to move from Russia to West Coast of USA. It is a perfect time to catch up on emails and social media. Today, I want to talk about the power of technological influence in consumer and business spaces. The world is changing very fast. The technology is a primary driver of all these changes. Think about the internet, mobile, cloud, social networks, consumerization, BYOD trend… The list can be extended. It is hard to find a place where people are not talking about technological disruption these days. However, here is the candidate – enterprise sales. Speak to enterprise sales people and you find yourself in a different world.

The following TechCrunch article can give you enterprise software startup point of view on enterprise sales – Forget Virality, Selling Enterprise Software Is Still Old School. Take a moment of your busy schedule and read the article. The author, Roman Stanek is CEO and founder of GoodData company selling enterprise software. The author is discussing challenges technological companies are facing when trying to apply modern B2C principles of technological startups to enterprise world. Here are few snippets from the article where author explains the difference between consumer and enterprise market.

There is much talk in the Silicon Valley community of lean startups and pivoting. The idea is that you get going, learn from your mistakes, and then evolve toward what the market needs. In the B2C space, this process can work because the marketing costs are low or nonexistent and there is an efficient path to massive scale. The goal is that the uptake happens virally and the figuring out takes place with a safe cushion of huge numbers of users… This model just won’t work in the B2B space. New products, especially those aimed at IT, must usually be sold. Gaining a toehold in the enterprise is a separate swim lane from engaging consumers or startups who never pay for support or consulting.

So, enterprise software must be sold and not bought. At the same time, world is not standing still. The move from selling to buying is one of the most visible trend in consumer space, but not only. We don’t like when somebody is hard-selling us stuff. One of the most popular new marketing models these days is called freemium model. In software industry, the roots of these idea is going back to 1980s and mostly driven by low cost of manufacturing. Software vendors distributed free floppy discs or CDs with promotion of full version. Internet and SaaS software provided additional boost to freemium model. Very often, freemium is combined with another new trend – viral marketing. In a nutshell, it is a technique combining usage of social network and online materials to increase brand awareness and achieve marketing objectives and product sales.

The discussion about about freemium and viral marketing in B2B and enterprise software is trending online and offline. You can find slides, materials and presentation about that. Established enterprise software vendors, consulting firms, enterprise IT, new enterprise SaaS vendors, startup companies are trying to understand if a new model will change the rules of enterprise.

I can recommend you 16 Ventures whitepaper – The reality of freemium in SaaS. Navigate to the following place to download the paper and see slides. Author brins examples of B2B companies that succeeded using freemium and viral marketing methods. In the slides it summarized as something called “Narrow-band Horizontal” with examples of, Yammer and Xobni.

I can see some traction of freemium and viral methods in PLM eco-system. Established software vendors and startup companies are innovating in technologies, marketing and business models. Here are some examples. Aras Corp is innovating in business model and offering so-called “enterprise open source” – you can use Aras Innovator for free and pay only maintenance and services. Autodesk, Dassault and some other software vendors are creating free mobile application that can be used by engineers and designers. GrabCAD established free social network for engineers and now developing collaborative applications that can be used by engineers. I’m apologizing upfront for not mentioning all companies innovating in this space.

What is my conclusion? TechCrunch article brings 6 requirements of enterprise software sales success. My summary of these rules – follow the rules of enterprise old-schoolers, otherwise you have no chance to succeed in enterprise software game. It might sounds like a good idea for startup company… However, you need to remember that all these rules were created by enterprise software market on both sides – software vendors selling to enterprise and enterprise ITs buying enterprise software. Both sides are interested to keep the status quo. In most of the situation, I can see how freemium and viral applied to compete with “enterprise old shcoolers” from the marketing and distribution cost standpoint. However, large enterprises have no problem with money – they have problem with time. In order to change the rules of enterprise sales (PLM included), you need to look on the solution as a combination of cost of sales, value proposition, ROI and (most important) time. One of the combinations will be winning jackpot. Just my thoughts…

Best, Oleg

Interoperability will play a key role in a success of future CAD/PLM

January 26, 2013

Data. Conversion. Interoperability. Translation. The discussion about these topics is endless in CAD/PLM world. Customers are looking for interoperability between different product versions, competitive products, data models, data formats, databases and geometrical kernels. Customers were always first impacted by problems of interoperability. The lifecycle of engineering and manufacturing work is longer than typical lifecycle of product version or even engineering IT solution. Technically, data interoperability is a complex problem. It is not easy to solve, even if you are want to do so. Evan Yares recently posted an interesting article about interoperability – CAD Interoperability today. Interoperability plays an important role in product lifecycle applications in large OEMs and Supply Chain.

Until now, the perception was that customers are most impacted from data interoperability problems. It was true until very recently. However, I can see some new trends and changes in this space . Consumerization, BYOD and cloud trends are introducing new elements and aspects in product development roadmaps. CAD/PLM vendors are forced to think about cloud and mobile development as well as potential disruptive competition coming from newcomers and other vendors. New design applications become more granular and focusing on a specific functionality or target customers. Two examples of recent announcements are Autodesk Fusion 360, SolidWorks Mechanical Conceptual. These application were born to co-exist with old products. Existing products won’t retire tomorrow. The ability to re-use data with existing product lines such as Inventor (for Autodesk) and SolidWorks (for Dassault) and other CAD packages will be vital for success of new products. I’ve been reading GraphicSpeak – SolidWorks Mechanical Conceptual introduced but not delivered article earlier today. Randall Newton is talking about the product SolidWorks Mechanical Conceptual (SWMC) announced by SolidWorks during SolidWorks World 2013 in Orlando last week. SWMC is build on top of Dassault 3DEXPERIENCE platform. I found the following passage interesting:

Reading between the lines, so to speak, of what was said at SolidWorks World, it seems two critical challenges remain before SWMC will be a selling product. It must prove to be fully and seamlessly interoperable with SolidWorks, and it must be more cloud-based. Interoperability has always been a significant challenge in the 3D CAD industry. 3D kernels are complicated. Dassault’s 3D Experience platform uses the CGM 3D kernel; SolidWorks uses the Parasolid 3D kernel from Dassault’s rival Siemens PLM. Completely accurate automated moving of files from Catia V5 and V6 is not commonly possible, and they share the same 3D kernel. Most of us can only imagine the complexity of moving between CGM and Parasolid.

Granularity is one of the most trending topic these days. Everybody are thinking about Apps. Company are moving away from developing heavy and complex product suites towards granular applications. Al Dean of Develop3D wrote an interesting article about granularity few years ago – Why granularity is going to rock your future… This is my favorite passage:

There are two things that might influence this and push us into further levels of explicit detail and granularity. The first is the ‘cloud’ (yes, I broke my own rules). When you’re working on a system that’s remotely located on a server, whether that’s over your internal network or across the wider web, you’ll need to manage and exchange finite packets of information, features, sketch entities and such. To do that, you need to manage and keep track of those individual parcels of data and oackets of change. That’s going to require a level of granularity that’s way beyond what most data management systems are currently capable of. Consider what would happen when you start to work on today’s products, in a highly collaborative environment, where data is being passed globally, between teams, between languages, between professional disciplines. And you still need to track data down to this type of level. And when you’re working on a product that looks like X-Ray image.

What is my conclusion? I agree with Al Dean. We will see more granularity in data and new applications. Interoperability becomes a very important factor in a future success of new apps. New level of data compatibility is required. Vendors will be forced to improve the level of interoperability of their existing products as well as new apps. Interesting time and change happens these days. Vendors need take a note. Important. Just my thoughts…

Best, Oleg

Will PLM crunch untapped data in manufacturing organizations?

January 24, 2013

Do you remember the golden era of desktop searches? I remember first time I had a chance to run Google Desktop on my computer. The most inspiring moment was to see documents and emails that you completely forgot about. Today, desktop search solutions are not as popular as before. Our personal digital life moved to the cloud. Application search, such as Outlook search and others improved significantly (thanks to open search solutions reused by many vendors). The focus of "data crunch" moved from a single desktop solution to cloud and mobile devices. Despite a huge promise of enterprise search solutions, majority of them are experiencing difficulties to provide efficient, reliable and cost-effective solution that can help to organization to capture and search trough massive amount of digital data. Focused search solutions are more efficient and we can see them coming from enterprise software vendors.

However, it doesn’t solve the problem of huge amount of existing data in organizations. I’ve been reading Crowdshifter article Behold The Untapped Big Data Gap. It shows some data coming from IDC study. Here is an interesting quote:

…article reported that 23% of data within the digital universe of 2012 could be useful for big data collection and analysis purposes if tagged. However, there is a huge gap in the amount that has been tagged versus the amount that remains without semantic enrichment. Only 3% has been tagged and only .5% has been analyzed.

Source: IDC/EMC.

Manufacturing organizations are desperately looking how to improve their decision management process. To leverage the existing data in an organization can be an interesting approach. I can bring many examples from PLM space where data about change management history, maintenance, suppliers, etc. can help to make a better decisions. For the moment, the majority of the information stored in application silos and cannot be used in an easy way. This data can easy become digital garbage similar to last year papers on your desktop and similar to old documents and email on your desktop before desktop search era.

What is my conclusion? To analyze data is a tough job. It requires computing resources, time, investment and smart algorithms. Google laundry list of results won’t be helpful. The new methods of data crunching and data discovery need to be developed. With only .5% of data analyzed and 3% of data tagged, we have a huge potential to tap in. Just my thoughts…

Best, Oleg

PLM, Engineers and Collective Memory

January 24, 2013

Many years ago, one of my mentors told me that "the worst pencil is better than the best memory". I liked it. Since than, I have no trust in remembering things. I started to take notes. I switched to be completely paperless 4-5 years ago. The biggest problem on my way to become completely paperless was the ability to capture information at the time you need it coming from multiple sources. Finally, iPhone and combination of apps allowed me to create an environment where I can keep track of my activities and get access to this at any time.

Engineering people are bad organized (please, don’t take it personally). Processes and work planning are not going well with engineers designing and creating new products. Companies tried to create innovation process management software, but in my view it was very unsuccessful. At the same time, I can see a need of engineers to capture information alongside their everyday activities.

One of the products I’m using to capture the information on a daily basis is Evernote. It supports many ways to capture notes using web and mobile versions including capturing of videos, pictures, website links and many others. Combined with search function, it helps to keep things organized. Evernote is not alone in this market. Two additional notable companies in this space – Clipboard and The last one was snatched by Yahoo few days ago. Watch the following two videos if you are not using similar products in your life.

From Personal to Collective Memory

I found a total absence of tools that can help engineers to capture their everyday working activities. Of course, engineers are not prohibited from usage of Evernote, Google and many other tools. At the same time, one of the key elements in capturing the activity is contextual relationships to information. In case of Evernote, it is photo, voice memos, videos, etc. To make engineering and design context capturing can be an interesting opportunity, in my view. They key element is efficiency. Engineers won’t tolerate even additional 30 secs of their working time. However, to memorize design idea, concept or decision can be extremely powerful.

The next interesting step can come with the ability to provide information around a particular item, drawing, product, customer, etc. collected by different people in organization. Such type of clipboards can become a sort of collective memories. The potential value can be significant – lost ideas, forgotten decisions, potential customer problems and many others.

What is my conclusion? Our memory is not efficient. To be able to capture information around engineering and design activity is still very untapped place. Usability is a key. Vendors can learn from tools like Evernote and others how to create a tool you can use in your everyday life in any environment. Just my thoughts…

Best, Oleg

Image courtesy of [keattikorn] /

Why PLM should pay attention to Facebook Graph Search?

January 22, 2013

One of the biggest tech events for me last week was Facebook Graph Search. If you haven’t heard about this, you better to catch up. There are tons of articles about new Facebook Graph search, but service is still in the Beta phase. You can submit for Beta here and hope to get it soon. So, the best you can do for the moment is to read about other people experience. The stories about Graph search are mixing technical, user and business content. Many of reviewers are taking Facebook graph search as a new Facebook monetizing mechanism. You can read Forbes article Facebook Graph Search Runs On Likes That Advertisers Have Already Paid For, which provides a good review of what Facebook announced. You can have a read of the following blog Under the Hood: Building Graph Search Beta sharing some beta experience with Facebook Graph Search. Finally, watch the video with Zuck presenting Graph search as as third pillar of Facebook.

Graph Search is clearly technological challenge fro Facebook in terms of scale of data. Here is an interesting quote I captured from Digital Spy article.

Graph Search has been a huge engineering challenge for Facebook, as it involved the indexing of data from 1 billion accounts, 240 billion photos and over 1 trillion connections on the social network, but also factoring in the myriad of privacy settings dictating who should be able to see what.

Why Graph Search is important for PLM?

Here is a question you may ask me – why is it important? Here is my take so far on a reason why PLM and enterprise vendors should pay attention on Facebook experiments with search. As we learned for the last decade – scale matters. For the last 10-15 years, the really scalable systems were developed for public web first and then replicated in the enterprise. This trend was different back in 1980s and 1990s when complex problems first were solved in military and defense. What we learned from Google for the last 10 years is that system can scale up enormously. However, Google public web search never faced the problems of privacy, accounts separation and diversity users. Google came to the similar problem earlier last year with injection of personal social results. To me, this dimension of scale is not well developed. Noise vs. signal problem in highly diversified by multiple accounts data corpus is an interesting problem to work on. Facebook is chasing long tail of all Facebook accounts, likes, connections, etc. This is a level of scale I can imagine in enterprise systems or even value chain of OEM and suppliers. This is where things get interesting.

What is my conclusion? Remember, 3-5 years the question of web scalability was introduced as a serious showstoppers for enterprise systems to scale up outside of corporate data center. Almost nobody is talking about that nowadays. It is clear to all of us that public web powerhouses like Google, Facebook, Twitter, etc. proved that systems can scale. Facebook Graph is a step in a direction that can be very close to social collaboration in any enterprise company and beyond. Important. Just my thoughts…

Best, Oleg


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