PLM, Bill of Materials and Silo Syndrome

PLM-info-silos.png

Are you familiar with term “silo”. When it comes to enterprises and large organizations, we often can hear about different silos of information. Here is the definition of information silo as it appears in Wikipedia.

An information silo is a management system incapable of reciprocal operation with other, related information systems. For example, a bank’s management system is considered a silo if it cannot exchange information with other related systems within its own organization, or with the management systems of its customers, vendors, or business partners. “Information silo” is a pejorativeexpression that is useful for describing the absence of operational reciprocity. In Information Technology, the absence of operational reciprocity is between disparate systems also commonly referred to as disparate data systems. Derived variants are “silo thinking”, “silo vision”, and “silo mentality”.

Very often, you can hear about “information silos” in a very negative context. Here are typical reasons why silos are bad – productivity killer, bad information transparency, etc. Recently published by PR Newswire article defines a new term called silo syndrome. Navigate to the following link to read Thousands of Companies Diagnosed with Dreaded ‘Silo Syndrome’. Article defines list of so called “silo syndrome symptoms”:

- An inability to immediately access business information
– Searching for answers but never really finding them
– Problems processing terms like “unstructured content”
– A penchant to unnecessarily flatten relational data
– Inability to join concepts together in real-time
– Needlessly accessing multiple systems for “what” and “why” answers

PLM propaganda very often use the value of PLM in overcoming the problem of organizational silos. Here is one of many marketing examples of PLM value connected to org silos coming from Oracle Agile PLM article on IT Toolbox article.

PLM by definition is concerned with tracking and controlling product-related business processes that span multiple departments across an extended period of time. Each of these departments may utilize differing systems. Tracking a products lifecycle will often present the need to gather and share information with ERP, CRM, inventory, manufacturing, supply chain, logistics and other systems. While some off the shelf integration may be available, current PLM users often find themselves faced with a frustrating level of manual re-entry or poor visibility of information and processes trapped in so-called silos. Overcoming these integration challenges can mean that an organization is liberated to find the true value of PLM: more innovative, market-responsive products, faster-time-to-market, faster time-to-volume, more efficient change management, better customer care, and superior obsolescence strategies. These benefits can be achieved by both process and discrete manufacturers.

The reality of PLM and silos are difficult. The main place where PLM is facing organizational silos is Bill of Materials (BOM) management. For manufacturing organizations, to create and manintain multiple Bill of Materials is a straightforward way to split responsibilities and control. Requirements, Engineering, Manufacturing, Sales, Support, Supply… you name it. Every department and organization is requesting to have “my BOM”, which will allow them to control and manage the information in the way they want. The real challenge come after when people demand PLM system to take care of multiple BOMs and information transformation between these BOM-silos.

What is my conclusion? Today, PLM has a limited success in eliminating organizational silos by introducing support for multiple Bill of Materials. In many situations PLM is not eliminating the needs to re-creating information. The demand of customers is to have sophisticated BOM management tools that allows to maintain multiple BOM silos in organization. In practice, manufacturing organizations are not interested to eliminate BOM silos. People want to keep information silos, but have PLM system that can help them to manage silos. Result is skyrockeing complexity of the PLM systems and implementation. So, do we need to preserve silos? It is a good question you can ask before approaching you next PLM BOM implementation. What is your take? Speak up.

Best, Oleg

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2 Responses to PLM, Bill of Materials and Silo Syndrome

  1. Lars Taxén says:

    Oleg,
    You are asking: “do we need to preserve silos”? My answer is yes and no. Yes, because the very essence of organized work is to coordinate various “silos”, each working on something that is needed: marketing, design, manufacturing, etc. Without silos, organized work is not possible. No, if “silos” means that these are entirely disparate in the organization. A balance between commonality and specialization is necessary.

    I would rather denote “silos”as contexts, workpractices, domains, or something similar, to get away from the negative connotations associated with “silos”. For PLM, this means that the thing called “product” will pass through several contexts during its life-cycle. It may start in the marketing context; continue in the design context; be manufactured in the manufacturing context; and supplied and serviced in the supply and service contexts. It is the same product; only differently characterized and structured in each context.

    Concerning the BOM, this means that you do not have to transform different BOMs from one context to another. You just put the product in different BOMs depending on the context, which in essence means that some product parts will show up in several contexts.

    At http://www.neana.se/multiple-boms.jpg there is a screen dump from a PLM-system where this was implemented some 10-15 years ago. You can see the various structures, and how some product parts have the role of “border” objects; they appear in at least two contexts. Most of the parts, however, are specific for each context only.

    Lars

  2. Lars, thank for your comment and insight! Yes, silos are important (and natural) part of every organization. Thanks for sharing the link and picture. Domain borders is an interesting concept and may work to constitute a single BOM combining all information with related semantic parts (domains). Best, Oleg

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