Component, costs and BoM collaboration

November 12, 2015

electronic components

Cost is one of the most important drivers to optimize manufacturing and operations. But at the same time, this is not a single criteria when you think about optimization of your product design and component selections. The way to look about it is to think about complete ecosystem combining manufacturing, distribution and sales. Competition in cost and distribution is driven by an increased role of internet connectivity and global economy.

In order to be economically viable, manufacturers and retailer must be able to sell product faster and at competitive prices which sends which sends a ripple effect down the supply chain and manufacturing operation.

One of the aspects of cost optimization is related to component selections. In some industries like electronic manufacturing it can be a dominant factor to drive your product cost. Component selection is complex process if you think beyond simple attempt to pickup the cheapest components. You can think about few possible strategies to optimize component selection process.

Reduce number of suppliers

Distributors are offering products from multiple manufacturers. You can get an additional advantage from consolidate supplier base. It will save number of purchase orders to manage as well as save time for supply chain team. In most of situation, it can also save shipment cost.

Check multiple options – manufacturer and distributors

In some cases buying directly from manufacturers can give you the lowest price. But this is not always true. Because of different reasons such as distributorship agreements and variation of demand and supply, distributor can offer lower prices than manufacturer and you can leverage it for your product.

Minimize inventory cost

To carry inventory is not efficient. Especially for small manufacturers. One of the factors in the decision process is optimize inventory cost. You can check delivery options and variety of hold inventory and cancellation options provided by suppliers and distributors.

All options I mentioned above requires transparency and collaboration between engineering and supply chain. Thinking about potential component alternatives might require round trips to engineering department and changes in a product design.

One of the bottlenecks in this process is bill of materials. For large companies, bill of material is usually located in multiple systems and needs to be synchronized. PLM, ERP, Supply chain systems- this is only a very short lists. Larger companies might have some homegrown systems with bizarre interfaces and communication options. In smaller companies, email + Excel spreadsheet combination is a killer tool to synchronize, but also a place to introduce mistakes.

Real time collaboration between engineers in multiple departments and supply chain professionals can eliminate mistakes and streamline the process. Bill of materials is a key element to make this communication efficient and compare multiple options.

What is my conclusion? Modern manufacturing environment is increasing the bar to enable transparency and collaboration between people and departments. To have system that can enable real time collaboration using updated bill of material can be a great enabler. Unfortunately, many organizations stack with “synchronization” of data between systems. This is a core of significant inefficiency. The opportunity to improve it is huge. Just my thoughts…

Best, Oleg

Will PLM and ALM prevent a car from being hacked?

July 23, 2015


Integration of hardware and software is a topic in mind of many manufacturing companies these days. PLM was traditionally focused on mechanical and lately on electronic topics cannot ignore more software. Software developers are using a different set of tools for configuration management. For long time ALM (Application Lifecycle Management) tools took a separate stand from PLM tools. All these things in the past. Software vendors and manufacturing companies cannot ignore complexity of modern product literally powered by software in every part. I’ve been blogging about it long time ago – PLM and ALM: How to blend disparate systems and lately – How to combine engineering and software BOMs.

In one of my last posts – The importance of software BOM for hardware security, I pointed out how important to get an access to right information about software and electronic running in your products. For many manufacturing companies the information about mechanical, electronic and software components is siloed in different data management systems.The importance of new tools capable to manage multidisciplinary product information is raising. Software BOM security is just one example of the trend. The demand to provide systems able to handle all aspect of product BOM is increasing.

The article in WIRED magazine few days ago brings an interesting perspective on the importance of software security in automotive products. Navigate to the following article – Hackers remotely killed a Jeep on the highway – with me in it. The story is fascinating and gives a lot of "food to think about". Here is my favorite passage:

All of this is possible only because Chrysler, like practically all carmakers, is doing its best to turn the modern automobile into a smartphone. Uconnect, an Internet-connected computer feature in hundreds of thousands of Fiat Chrysler cars, SUVs, and trucks, controls the vehicle’s entertainment and navigation, enables phone calls, and even offers a Wi-Fi hot spot. And thanks to one vulnerable element, which Miller and Valasek won’t identify until their Black Hat talk, Uconnect’s cellular connection also lets anyone who knows the car’s IP address gain access from anywhere in the country. “From an attacker’s perspective, it’s a super nice vulnerability,” Miller says.

From that entry point, Miller and Valasek’s attack pivots to an adjacent chip in the car’s head unit—the hardware for its entertainment system—silently rewriting the chip’s firmware to plant their code. That rewritten firmware is capable of sending commands through the car’s internal computer network, known as a CAN bus, to its physical components like the engine and wheels. Miller and Valasek say the attack on the entertainment system seems to work on any Chrysler vehicle with Uconnect from late 2013, all of 2014, and early 2015. They’ve only tested their full set of physical hacks, including ones targeting transmission and braking systems, on a Jeep Cherokee, though they believe that most of their attacks could be tweaked to work on any Chrysler vehicle with the vulnerable Uconnect head unit.

While story is still under development, it is already raised many questions. Some of them led to discussion about standards for cars’ defense against hackers. I’m expecting an increased demand for software capable to manage traceability and tests of mechanical, electronic and software systems together to insure car is not vulnerable to potential hacks.

Manufacturing business technology article echoed the same topic –Software Integration With Hardware Crucial For Manufacturing. It confirms that hardware – software integration is complex and very few companies are doing it in a right way. It gives interesting recommendations how to improve that – common data model, integrated requirement and change management tools and a framework independent from software tools. A common data model is my favorite. Here is a quote:

A common data model. Unified ALM-PLM defines a common data model and change management processes for managing an entire system, both hardware and software data, without duplicating data management or business processes across those systems. The two primary integration points are, first, tying back the requirements to the software and hardware bill of materials and, second, linking defects back to change requests and change orders so PLM can reflect them.

While all recommendations make sense to me, I have a concern about their implementations in real life. How feasible to create a common data model using existing PLM and ALM software tools? A dream data and lifecycle management system should be flexible enough to handle all system definitions from mechanical, electronic and software as well as system behavior related to that.

What is my conclusion? The complexity of modern products is creating demand for new capabilities to support by PLM and ALM software. While integration is usually hardest part of PLM implementation, not all PLM system are flexible enough to maintain demanded "common data model" to handle all bill of materials and related information. Just my thoughts…

Best, Oleg

picture credit WIRED article

Configurable BOM – an ultimate PLM platform test?

June 10, 2015


Platformizaiton in PLM is an interesting trend. If this is a first time you hear about "platformization", you are not alone. The term was "coined" by CIMdata – analytical and consulting outfit focusing of PLM and manufacturing. You can read more here – Platformization: The next step in PLM’s evolution. As I mentioned earlier in my blog, it is hard to understand what specifically CIMdata means by platformization. So, I’m still learning…

In one of my earlier posts I made a guess that that Today’s CAD and PLM tools won’t become future PLM platforms. So, you may ask me – what does it mean with regards to existing PLM platforms provided by top CAD/PLM providers? First of all – relax. Nothing is happening fast in PLM platform world. Large manufacturing companies are running their business in a very conservative way and it takes years until some changes will happen. In my old blog from 2011 – PLM platforms: Who is Right and Who is Left? I touched some aspects of future competition between PLM platforms. Interesting enough, five years after my post, some of these disputes are still very hot.

One of these stories connected to Dassault Systems and 3DEXPERINCE platform. It was called V6 back in 2011, but I don’t think it changed a lot and I’m going to touch it later in my post. My attention was caught by Verdi Ogewell blog post – PLM at Jaguar Land Rover – The Moment of Truth for Dassault’s 3DEXPERIENCE Platform. I found it very interesting and it is absolutely worth reading. It speaks about history of Dassault’s 3DEXPERIENCE platform adoption by JLR. The internal JLR’s code name is iPLM. I found a bit funny that Dassault strategy name was called "beyond PLM". I captured two interesting data points from the article.

The first data point is related to Dassault competition Siemens PLM. Teamcenter is still a production backbone for JLR. Here is a passage that says that:

Siemens was eliminated in JLR’s evaluation – 7 years later, it still uses Teamcenter. Siemens’ Teamcenter (TC) was eliminated as an option due to architectural reasons. TC’s unified architecture wasn’t ready at the time.But here is the paradox; Teamcenter is still a major part of JLR’s product data management backbone, generally used in combination with CATIA V5. Even in the last few years, JLR has bought new TC licenses in anticipation of the new PLM project

Second data point is related to the core element of JLR iPLM implementation – configuration driven BOM. According to the article, this one of the most important components of iPLM and it connects BOM to variety of different BOMs and support change management activities. Here is the passage with some more details.

During 2015 the goal is to establish the fully functional platform through a gradual entry process containing four parts (”P1-P4”), which in turn will make it possible to develop and realize the first vehicle ever (”Vehicle 1”) on the completed iPLM platform.With these platforms in place, iPLM lead at JLR, John Knight-Gregson, claims that ”after four years in [the] making,” it will have the ability to execute on: Milestone driven configuration; Configuration driven BOMs; BOP/BOM/BOI/etc driven CAD; Integrated Change Management.

Dassault Systems has a strategy called "Zero BOM errors". The article touched BOM story by referencing the conversation with Andy Kalambi, CEO of ENOVIA. It reminded me my article – PLM and Zero BOM errors: the devil is in details. I guess bringing configurable BOM in a data-driven 3DEXPERIENCE environment is a core elements of Dassault System strategy. However, it requires a lot of components inter-playing together for fully configurable view of vehicle with support of change management.

What is my conclusion? To have PLM vision is a great thing. Dassault System certainly has one. "Beyond PLM" vision is even better (note, the name of my blog and Dassault System vision name is an absolute coincidence). But… to make platform successful requires to handle a very basic set of PLM operations. What I learned from JLR story – it is all related to managing of CAD data and configurable BOMs. Without that, all bells and whistles of a new platform are useless. Configurable BOM functionality is needed to move JLR from Teamcenter to ENOVIA and this is one of the most interesting PLM platform validation points. Just my thoughts…

Best, Oleg

Image courtesy of ammer at

Why PLM is failing to manage multi-disciplinary BOM?

May 21, 2015


Products are getting complex these days. Look on every small electronic gadget in your hands. It is actually combined from multiple pieces – mechanical parts, plastics, electronic and software. Traditionally you are using separate tools to design these parts – MCAD, PCB design, software tools. Then it gets tricky a bit – you need to put together right information about the product, manage changes, coordinate with suppliers, etc. PLM tools are here to help. But, for some reasons, it is a difficult problem to handle. article In High-Tech Electronics, Managing Three Lifecycles As One is a New Key to Product Development by Laila Hirr speaks exactly about that problem. Here is my favorite passage from the article explaining the problem:

HTE’s need for PLM is straightforward—a firmer grasp of the information generated before and during product development and subsequently “in the field.” Many information needs go unmet when products go into assembly operations of original equipment manufacturers (OEMs) and built into other manufacturers’ components in complex supply chains. Users and system integrators may also be slow to share information.

For many reasons, PLM has repeatedly fallen short in this industrial sector. At CIMdata, the reason we see most often is a lack of integration with the full information set that defines the product. Achieving this integration is a multidisciplinary challenge and in PLM’s twenty-plus year history with the high tech industry, the challenge has yet to be resolved. This largely accounts for the scarcity of compelling PLM successes in HTE and the ongoing skepticism about PLM.

Article speaks about absence of integration between tools and dependencies on homegrown spreadsheets to manage bill of materials and change. Which made me think about core problem in PLM tools – management of multi-disciplinary BOM. I addressed this problem in the keynote presentation at ProSTEP iViP Symposium few weeks ago – PLM and ERP: separated by a common Bill of Materials (BOM). PLM systems today are addressing BOM management. Most of them are taking an approach to manage multiple bill of materials view. However, these tools are not efficient enough to manage a BOM which contains mechanical, electronic and software pieces together. The complexity of BOM is driven by multiple disciplines, change management and product lifecycle as I presented on the following slide


What is my conclusion? Technical difficulties and disagreement between people often can lead to problems in establishment of cohesive BOM management solutions. PLM fails to provide a way to manage multi-disciplinary BOM and changes. High-tech and electronic industry is specific because of high diversity of design tools – mechanical, electronic, software. PLM tools are not integrated well with design tool, which leads to poor BOM management. There are several reasons why it happens – limits of BOM management tools, complexity of integrations between design tools provided by multiple suppliers, UI complexity. Just my thoughts..

Best, Oleg

Image courtesy of Toa55 at


Bill of Materials (BOM) and product lifecycle open loops

May 19, 2015


It is hard overestimate the importance of Bill of Materials for product development. In my keynote at ProSTEP iViP symposium in Stuttgart earlier this month I’ve been sharing my thoughts why developing of single BOM across multiple disciplines in critical for organization. I wanted to bring few examples that can demonstrate why having a single BOM strategy can bring benefits to product development and manufacturing organization.

Earlier today, at Siemens PLM connection event in Dallas, I captured the following slide demonstrating an integrated approach in design, manufacturing, planning and production. What is really interesting is how as-design, as-planned and as-build views in PLM are integrated with design, manufacturing, planning and production.


Few days ago, I the following article by 3D CAD World article caught my attention – Progress in closing the product lifecycle’s loops  by Peter Bilello, president of CIMdata. The article speaks about the importance of collaboration across diverse enterprise groups.

For many years, the PLM industry has greatly benefited from a steady stream of improvements in collaboration among ever more diverse enterprise groups—in data interoperability, for example, and in the transparency of workflows and processes. The development, manufacture and support of globally competitive new products are, however, still hamstrung by the remaining open loops new and old.

Later in the article it came to the topic I was looking for – Bill of Materials. According to article, BOM is a biggest remaining challenge to make integration running smooth. Here is the passage, which explains that.

Between engineering, manufacturing and finance, a big remaining challenge is the bill of materials (BOM) in its many forms—the as-designed BOM, the as-engineered BOM, the as-manufactured BOM, and so on. Generated and managed with PLM and often executed by enterprise resource planning (ERP) systems, BOMs themselves are loop closers. PLM-ERP connectivity and interoperability are steadily improving, but some open-loop issues are resolved only after time consuming face-to-face meetings.

What is my conclusion? Single BOM could be a great thing if vendors will figure out how to implement that. As you can learn from Biello’s article, PLM-ERP has open-loop issue and BOM is a tool to close that. However, companies are concerned about bringing single BOM strategy since it can raise lot of organizational challenges for them. At the same time, the demand for better integration and collaboration can put companies in front of decision to bring single BOM to close open loops between engineering, manufacturing and production anyway. Just my thoughts…

Best, Oleg

Image courtesy of Stuart Miles at


BOM and roadblocks for Product-as-a-Service in manufacturing

May 12, 2015


Software-as-a-Service (SaaS) is a software licensing and delivery model in which you are buying software subscription and software is typically centrally hosted. Here is a potentially big news – SaaS model is proliferating into manufacturing. Welcome Product-as-a-Service (don’t be confused with PaaS- Platform as a service). According to IDC report, manufacturing companies have seen some potential in after sales services and support. There is a good chance soon we will be buying services and not manufactured product. Here is a passage from IDC article to explain more.

By 2018, 40% of Top 100 discrete manufacturers and 20% of Top 100 process manufacturers will provide Product-as-a-Service platforms. Leading manufacturers have seen the potential that after-sales service revenues hold, with some generating up to 50% of their profits from after-sales sources. As manufacturers apply service innovation to their efforts, the product becomes a platform to deliver business outcomes and tangible value. IDC Manufacturing Insights defines product-as-a-service as the transformation of service from a standalone function within a manufacturing organization into an integrated product and service offering that delivers value in use. Manufacturers transition from selling physical products to selling the business outcomes the products will deliver.

Among the IT impacts we see as a result of product-as-a-service are the need for IT to support a global service delivery network with systems that enable the process flow for this new business model. Major systems, from customer management to service parts planning to finance and accounting will need to be altered and brought in alignment with how the product-service is brought to market. The change necessary is not to be underestimated, which is why we see approximately 40% of manufacturing reaching out to external IT service providers to assist with the implementation of product-service systems.


To transform organization to sell services from selling products is a big deal. As it was mentioned above, it will bring significant challenges to transform existing IT systems. However, it made me think about challenges it can also bring to product lifecycle management environment and its core – BOM management.

The article Bill of Materials (BOM): Necessary or Just Nice to Have? from SparePartsKnowHow blog speaks about the role of Bill of Materials in services and spare part management. The article brings some interesting controversy around the need to have an up-to-date bill of materials in service. The article is very practical and I specially liked some examples. Here is my favorite passage:

If you choose to go down the path of software optimization (a theoretical approach) you probably do need to ensure that your BOMS are up to date. However, if you apply a pragmatic and process based approach such as the Inventory Cash Release process then the BOMS are less important. This type of approach forces you to look at the issues that drive your spare parts holdings.

These issues are not related to how many machines you have that use the part, they are almost universally related to the processes in place for spare parts management. These include: the basis of decision making (emotional, logical or data based), supplier relations, commercial arrangements, supply chain, procurement, planning, team behavior, and accountability. These are the most obvious examples.

From direct experience I can say that without a doubt these issues have far greater effect on your spare parts holdings than knowing whether you have X machines that use part Y. Of course the number of machines requiring a part will be an influence on the required holding levels, as it impacts demand, however, for the vast majority of companies their spare parts levels are far more influenced by the issues listed above and addressing these is the best approach for reviews and optimization.

That discussion reminded me very old disputes between Order Point and MRP strategies. It is clearly better to manage inventory by knowing what organization is manufacturing rather than maintaining a specific level of inventories. Moving into modern IoT era, I can see even more potential to correspond to a specific product requirements and needs to manage services and maintenance operation.

To have exact BOM of products in service can be tricky. This type of information is not well maintained by manufacturing organizations (especially, it is related to manufacturers that not using Serial Number BOM). It can be a challenge for this organization to move into more intelligent BOM management practices to bring up-to-date BOM in service management.

What is my conclusion? Manufacturing organizations will have to transform to support "Product-as-a-Service" model. It might create some significant IT challenges. One of potential challenges is the need to manage bill of materials for physical products in service and operation. The importance of BOM management will depend on specific "service management practices". We are going to see the evolution of these practices and related PLM technologies in coming years. Just my thoughts…

Best, Oleg

Image courtesy of pakorn at

PLM and ERP: Separated by a common Bill of Materials (BOM)

May 6, 2015


Yesterday, I had a privilege to share my thoughts about Bill of Materials and BOM management during my keynote at ProSTEP iViP Symposium in Stuttgart. That was my first time at ProSTEP conference. The first day is over. I will be publishing  updates in my live blog here.

The discussion about Bill of Materials is always interesting and entertaining. BOM is a centerpiece of every engineering solution. As an organization you have to manage different aspects of Bill of Materials during design, engineering, manufacturing and support stages. These days, as companies are moving from selling products into services, support and maintenance BOM is getting more into the focus of discussions. After all, Bill of Materials is complex topic. On the following picture you can see multiple dimensions of BOM complexity:


In every organization, Bill of Materials has two notions  – technical and political. The first one is absolutely important. The following three characteristics are absolutely important if you think about reliable BOM management solution: 1/ ability to manage multi-disciplinary data; 2/ scalability; 3/ user acceptance. User acceptance is a tricky thing. The demands of people in an organization about BOM are different. Engineering, manufacturing, support, supply chain, sales – these organizations have want to see BOM differently.


However, regardless on the role of a person in organization, the following demands are absolutely critical: 1/ No errors (each mistake in BOM is painful and can lead to significant problems in an organization ; 2/ No painful date re-entry (nobody wants to enter information into BOM multiple times); 3/ No painful synchronization of data between PLM, ERP and other systems.


Below you can find a full deck of my presentation:

PLM and ERP: Separated by a common Bill of Materials (BOM) from Oleg Shilovitsky

What is my conclusion? Bill of Materials and BOM is a very interesting topic. My hunch, it is getting even more in the focus of people as products are getting more complex. These days every single product is a combination of mechanical, electronics and software. Manufacturing companies are selling it as a services. Customers are demanding configurability, high quality and low cost. How to manage all these things together? The following three questions are absolutely important when you think about BOM management – 1/ How to support connected processes in an organization? 2/ How to stop synchronizing BOM between silos (PLM, ERP and others)? 3/ How PLM and ERP can support a concept of “single BOM”? Just my thoughts…

Best, Oleg

PS. If you want to discuss more about BOM management, please feel free to contact me directly.



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