JIT’s impact on PLM and BOM management

February 21, 2014

jit-plm-impact

JIT (Just in Time) is a well-known approach in manufacturing industry. In a nutshell, JIT is a production strategy to reduce inventory and associated cost. The philosophy of JIT is related to processing and transactions of inventories, which adds additional cost. By removal (or reducing) of inventories, you can reduce a total cost of production. You may ask me – where is product lifecycle management in this story? It sounds like completely "manufacturing problem" and something that shopfloor and suppliers network should be able to resolve. However, it is not true. In my view, there is tight connection between PLM implementation and JIT manufacturing planning.

Think about manufacturing planning and control. One of the functions is to get access to engineering bill of materials and use this information to create manufacturing plan – workcenter planning, suppliers orders, assembly instructions, etc. The efficient coordination between engineering environment and manufacturing planning is one of the key elements of successful production planning. Now, this is true for every manufacturing types. In most of PLM implementations it means the ability to send design or engineering BOM to manufacturing planners to work planning BOM. The difference come with specific of planning and manufacturing BOM organization related to JIT manufacturing principles.

So, what is the difference in bill of materials for JIT? The main one is significant reduce of bill of material levels. JIT reduce the number of part numbers planning and number of levels in BOM. Many part numbers that in traditional MRP practice are treated as in/out inventories now can be treated as "phantoms". This is actually one of the main goals in JIT – to reduce complexity of detailed manufacturing planning. However, it brings a need to maintain more synchronized communication between engineering and manufacturing – literally between design/engineering and planning bill of materials.

In my view, the main challenge of PLM tools in JIT manufacturing environment is related to engineering-manufacturing collaboration. PLM implementation should be focusing on better synchronization of both development/engineering and manufacturing/planning. The implication in PLM – additional requirements to BOM tools and ECO management. Inefficient collaboration can raise the number of engineering change transactions – one of the most expensive transactions in every manufacturing company.

What is my conclusion? JIT makes manufacturing processes more connected and synchronized. It is obvious that JIT implementation impacts supply chain network. The operations between suppliers are getting more tight. However, JIT is impacting engineering and design processes too. Therefore, as much as manufacturing is moving towards lean principles, the demand for better engineering-manufacturing collaboration will increase. I can see it as a significant challenge in many PLM implementations. Specially it may impact BOM and ECO management tools. Just my thoughts…

Best, Oleg


Will SaaS and Open API solve BOM Management problem?

September 27, 2013

where-is-my-bom

I like the way BOM discussion usually sparks. From my experience, "BOM management" topic has the ability to ignite conversation almost immediately. Therefore, I wasn’t too much surprised when I got blog attention from Hardi Meybaum, CEO of GrabCADmost buzzed about company in Boston if you trust Venturefizz. Here is the article – Why single BOM is not the answer for you. Read it and draw your own conclusion. My favorite passage is the one that explains "BOM problem":

Recent posts on bill of materials (BOM) like Oleg’s ‘Will PLM Manage Enterprise BOM,’ make me [Hardi] remember my first conversation about BOM management. It was when I was in charge of IT in a mid-size manufacturing company. Then, and now, Procurement Specialists said that BOM should live in ERP, Engineering Managers said it should live in PLM, Engineers said that it should live in spreadsheets, and PLM vendors said it should live in PLM. This is where today’s BOM problems start.

According to Hardi, BOM management problem will disappear because of SaaS and API availability. He promotes open exchange of data between GrabCAD and other SaaS applications and out-of-the-box integration. It will finally make right information available to everyone in an organization. From what I can see, GrabCAD’s believe that companies will move from integrated large product suites into lean and granular applications. Actually, I like the idea very much. Granularity is a very good thing. Two years ago, Chad Jackson addressed granularity on his Lifecycle Insight blog -Point Solutions, Integrated Solutions and the Granularity Value Proposition. This is how Chad explains the granularity:

The fundamental idea is that you layer on different solutions that each do something very specific and well. Basically it is the point solution approach but from an ecosystem perspective. It would include something like leaving your workgroup PDM software in place. Layer on top of that a workflow. Then add some social computing solution for collaboration. Then you can add in a project management solution. You get the idea. Leave what you have in place. Add in other point solutions where needed. And integrate them as lightly as you can.

Granularity and best-of-breed application set usually comes with two additional price tickets – IT/setup and integration.I can see an interesting and new perspective in the way Hardi presents the advantage of granular solution. It comes together with SaaS, which makes a lot of sense to me. Installation, setup, updates – all these things will go away with SaaS approach. However, I have a doubt about integration. Out of the box integration is a tricky part. I never seen it works well. If you want to create a custom integration, you eventually coming down to nuts and bolts. API plays an important role in the ability of systems to be integrated. I mentioned the importance of Web APIs in PLM last year – Why PLM Need To Lean Web APIs? Even if APIs are available, integration is an expensive thing. From that standpoint, it doesn’t really matter if your PLM and ERP systems are running as SaaS applications or installed in you datacenter. My hunch, traditional RDBMS technologies allows more options to build hardwired integration compared to multi-tenant cloud applications. BOM implementations are complex and required lots of business rules to be implemented to synchronize multiple bill of materials. This is pure integration question and hardly can be handled as custom-made work.

What is my conclusion? SaaS is a game changer in terms of how systems can be deployed and maintained. It creates a completely different view on IT spending and TCO. It is also creates a different perspective of openness and importance of APIs. It was easy to hack ERP or PLM RDBMS with direct SQL call to solve your integration needs. It is completely different for SaaS apps. You cannot do integrations without custom code or flexible integration frameworks and middleware. In my view, the real BOM management problem is not related to the fact your system runs on the cloud or on premise. It is about how to connect multiple BOMs into a single meaningful solution. This task is complex and cost money. Cloud is an excellent foundation to simplify solution available and making information easy accessible. Will it solve BOM management problems across organizational silos. I’m not sure about that. Just my thoughts. What is your take?

Best, Oleg


Will PLM manage enterprise BOM?

August 26, 2013

Bill of Materials is a huge topic. It is hard to underestimate the importance of BOM management in general as well as specifically for PLM systems. I’ve been blogging about BOM many times. Use this custom Google search to browse my previous beyond PLM articles about BOM.

One of the topics I’m debating already long time is so called "single BOM". I explained my early view on a problem of a single BOM back in 2009 in my post – Seven Rules Towards Single Bill of Materials. Despite most of people you talk to would agree with the idea, the implementation of single BOM in modern enterprise is complicated and challenging. Take a look on another post to get a glimpse of what I’m talking about – Why companies are not ready for single BOM? One of the biggest problem towards achieving of single BOM idea is integration challenges. Today, BOM data resides in many systems in enterprise. Each of these systems provides a specific functional view on BOM management – design, engineering, supply chain, manufacturing, finance, etc. However, the integration of these systems is a very complicated task. In addition to that, the attitude of vendors to lock data to improve the competitiveness of their systems applies additional integration and communication difficulties.

Manufacturing companies have many challenges these days. BOM management is one of them. Despite the fact of complexity of single BOM management strategies, businesses need to have a holistic view of bill of materials. I touched it in my 3 modern BOM management challenges blog post – lean manufacturing, heavy customization, supply and contract manufacturing.

In my view, the problem of BOM management is well understood by industry. I stumble upon one of the old Siemens PLM blog posts written by Nick Pakvasa – BOM Challenges in Automotive Industry. In addition to (obvious) recommendation to use TeamCenter as for enterprise BOM management, article nails down the problem of single BOM. Here is my favorite passage:

The requirement to get the BOM under control at the enterprise level is reaching a critical stage. Exponential increase in software content is driving the requirement to eliminate legacy BOM applications that were structured purely to support older product architectures which were predominantly based on mechanical parts, to an environment that has to deliver integrated BOM management capability for all content in the product. And, to deliver this capability with lifecycle BOM management needs incorporated into the application, and to manage this BOM data starting in the Product Planning phase, through designing, building, selling, servicing and retiring the product. Without integrated enterprise level BOM management supporting all functional areas, geographical locations and external suppliers, partners and joint ventures, actions such as traceability of quality and other imperatives, reuse, BOM access for Service, and lifecycle enterprise change management are either cumbersome, with redundant or non-value added effort, and potential for errors, or in some cases, cannot be executed.

What is my conclusion? The recommendation of all PLM vendors is to use PLM as a central system to manage all BOMs. The recommendation is obvious. However, my hunch is that problem is bigger than it presented by PLM companies and other vendors developing systems producing and requesting data about of BOMs. The complexity of integration, implementation legacy and variety of requirements are creating a very complex application space to manage. In addition to that, high level of competition together with political influence inside of every manufacturing company, make the decision about BOM management one of the most complicated in modern enterprise systems. Just my thoughts…

Best, Oleg


BOM 101: 5 “Don’ts” for Bill of Materials Management

January 21, 2013

BOM is fascinating. After posting 3 Modern BOM Management Challenges a week ago, I keep getting back to Bill of Materials management topic. If you missed my previous BOM 101 posts, here are links to get up to speed: BOM 101- The four pillars of every BOM management solution, BOM 101- How to optimize Bil of Materials. You can also take a look on this post as well – Single BOM in 6 steps. Today, I’d like to take a bit different angle by stating my 5 top most important "don’ts" you need to follow when designing and implementing bill of materials solution in your company. These topics are not necessarily reflecting PLM system. You can face the same problems when implementing BOM solutions using Excel spreadsheets, homegrown DIY data management and large ERP solution.

1. Don’t use significant numbers for Part Numbers – Use Classification

The discussion about "significant" vs. "non-significant" part numbers is probably endless. If you are new in this discussion (or just came out of computer science college), a significant Part Number looks like this 60-44-FN400587-60-NM-40-DWG-CHI. The information in this number is coded and different groups of this number are representing different meaning. Is there something wrong here? No, it is absolutely fine to have significant part number. Even more, if you are still using Excel spreadsheets or legacy data management system, this is probably the only way you can do it. However, it is complicated and eventually will lead you to mistakes. These days, most of PLM systems will provide you with the easy way to use insignificant part numbers. One of the features of good data management system is advanced classification mechanism. Such type of mechanism will help you to define all meaningful terms and characteristics of your Parts, Assemblies and Materials.

2. Don’t use supplier’s part number – use your own Item Master number

When working with suppliers, you may decide to use supplier’s part numbering schema. Especially if you are small company, it sounds very reasonable and it can simplify the communication with suppliers. However, this is a wrong thing to do, in my view. Again, PDM / PLM system maintaining item master record with cross-reference mechanism between parts and supplier part numbers can easy solve this problem and simplify your life in the future. What will happen with your system and processes if supplier will decide to change their number schema one day? it will be probably a very complicated day for you. So, use your own item master numbering schema and don’t rely on suppliers.

3. Don’t use the same ID for Part Numbers and Drawing Numbers

This is another question often asked during implementations. To use the same number for items and for drawings as well as process sheets, specification documents, etc. Initially sounds like something that could be simple enough to support and manage, can potentially lead to significant complexity and limitation in managing of change processes. The same drawing can be used for different part numbers. At the same time, changes of part numbers related to materials, stock, etc. won’t require drawing changes. Keep separate numbers and manage relationships between them is a good data management practice to follow.

4. Don’t be afraid to use extra part numbers

Identification is a very important mechanism. Sometimes, the assembly process is quite complicated and requires some temporarily pre assembled elements of the equipment to be maintained separately. In addition, you might have materials such as service parts, replacements, process result chemicals, etc. Bottom line – you don’t want materials in your bill to fly without identification. Everything needs to be included into the bill. Today’s data management systems are powerful enough to manage "extra Part Numbers" to identify everything you need in your bill.

5. Don’t put Bill of Materials on the drawings

Another topic coming from historical usage of paper drawing. In the past, it was the only way to share information. Obvious decision back that days was to put Bill of Materials on the drawing list. In modern digital life, such practice can create a lot of complications and additional procedures (such as updates of drawing when only part list will be changed). The good practice today is to keep cross reference links between drawings and bill of materials. It will allow you to manage your changes process efficiently and optimize your and your company time.

What is my conclusion? Control and efficiency. These are two important words to remember when you deal with Parts, BOMs and Documents. Many processes in this space were developed in the past and can trail lots of complexity if you not update them to "digital era". To streamline processes and make change management simple are important goals to following when creating the foundation of your BOM management solutions. Just my thoughts. I’m sure missed some issues and useful tips. Speak your mind and share your experience….

Best, Oleg


Search for the right BOM – I’m feeling lucky?

March 20, 2009

 I’d like to start  a wide topic for discussion – BOM. Yes, Bill of Material. This may seem like an old topic, I think, since most of the work that manufacturers do, starts from a Bill of Material (requirements) and ends with a Bill of Material (built/support/disposal). Therefore, my first question in the Bill of Material discussion is how to find right the Bill of Material in an organization? You, of course, know about the “I’m feeling lucky” button on Google start page. So, how many times have you felt lucky and found the right Bill Of Material with single click?

 My initial thought was to discover multiple types of Bill of Materials organizations manage today.

 1.     Concepts /Ideas –I’m not sure that there is a formal BOM here. But probably there is some relevance to existing BOMs in the organization.

2.     DesignCAD systems and other design systems are increasing their potential of showing and managing Bill of Materials.  

3.     EngineeringPDM/PLM and other TLA (Three Letter Acronyms) systems are used here. But, I think, from a market share standpoint, MS Excel is the leader.

4.     ManufacturingERP is heavily presented in this space. Sometimes PLM supports the Manufacturing BOM. If ERP is not setup in the organization, manufacturing is supported by various homegrown systems and… by MS Excel.

5.     Supply chain – depends on the type of communication and various collaboration tools, CAD/Design/PDM/files and again…. MS Excel.

6.     Support and others – various systems for asset management, industry-oriented tools for product having long lifecycle, etc.

7.     Regulation – recently, there is a growing trend for support for various regulations. This leads to the question of how to manage a regulation Bill of Materials.

 While looking at this list, which I’m sure is not complete, I started to think about how I can find the right BOM for what I’m doing now for my role in organization. I don’t have an answer today, but I think, there is  some room for innovation.

 As I consider PLM Think Tank as a discussion place, I will be very glad to hear your voices as I will be continuing discussion on this topic in my upcoming posts.


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