MBOM collaboration and cost of change

October 9, 2014

mbom-collaboration

The only thing that is constant is change. This is very much applies to everything we do around BOM. Engineering and manufacturing eco-system are full of jokes about engineering changes. You maybe heard about renaming "engineering change order" into "engineering mistake order" as well as the correlation between number of engineers and number of ECOs in a company. However, the reality – change orders are one of the central elements of engineering and manufacturing life. And it is primarily related to bill of materials. Once defined, we keep changing BOMs through the lifecycle of the product. ECOs are helping us to do so.

In my yesterday post (Manufacturing BOM dilemma), I discussed the complexity of manufacturing BOM. Fundamentally, MBOM is reflecting manufacturing process, which is by itself defined by both – product information coming from engineering department and by part and other related information coming from manufacturing systems (MRP / ERP). The collaboration between these two systems is never easy. This is one of the reasons why MBOM management process is struggle to find the right place in many companies.

One of the suggestions made in comments was to use PLM system as BOM manager and run ECO/ECR processes each time we need to make a change in bill of material. Such process will insure ERP will be always updated with the last information about BOM. My initial thinking – this is very straightforward way to manage it and I’ve seen it in many companies. On second thought, maybe there is a better way to manage that.

As I mentioned before, changes to the bill of material are a controversial topic. My hunch every company should have a policy how to manage BOM changes. From my experience I can classify three major type of changes to bill of materials: 1/mistakes; 2/materials and/or parts changes; 3/arbitrary changes (liabilities, etc.). In many situations, BOM changes can lead to significant cost related to material scrap, additional material planning, etc. On the other side, every change related to materials, process optimization and manufacturability should be synchronized back into PLM system. So, maybe, ECO/ECR is not a right way for engineering/manufacturing collaboration these days?

The life was good when engineers were able to through BOM over the wall of manufacturing department and finish their job. This is not a reality we live in today. Engineering and manufacturing should maintain a very close relationships by developing and optimizing manufacturing processes. Sometimes, the solution is purely manufacturing. However, very often, redesign or additional level of product engineering optimization required to reduce product cost or bring product to market faster. Maybe it is a time for both engineering and manufacturing department to develop new practices how to collaborate on BOM? Abandoning old fashion ECR/ECO processes for engineering/manufacturing collaboration can be a first step into this change.

What is my conclusion? Engineering and manufacturing process planning are tightly coupled these days. In many situations both product development and engineering planning must go in parallel to achieve desired level of optimization. It requires new type of processes and software enabling new level of BOM collaboration. Old fashion ECR/ECO method may not work. Just my thoughts…

Best, Oleg


Manufacturing BOM dilemma

October 9, 2014

mbom-dilemma

Manufacturing process optimization is one of the biggest challenges in product development these days. Companies are looking how to low the cost, optimize manufacturing process for speed and to deliver large variety of product configurations. The demand for these improvements is very high. The time when engineering were throwing design"over the wall of engineering" is over. Engineering and manufacturing people should work together to optimize the way product is designed and manufactured at the same time. Which, in my view, leads to one of the most critical element of this process – Manufacturing BOM (MBOM).

In one of my earlier posts, I addressed the challenges PLM systems has to manage BOM. PLM vendors are recognizing the importance of manufacturing solutions. However, it is hard to deliver MBOM in PLM. It related to CAD roots of PLM products, historical disconnect of engineers from manufacturing processes, complexity of synchronization between multiple BOMs and problems of integrating with ERP systems. Vendors are encouraging companies to use PLM technologies to manage MBOM and to push right product MBOM information to ERP for execution. The advantage of that is the ability of PLM to deliver accurate product information derived from design and engineering BOM.

However, there is another side in this story- manufacturing planning. Fundamentally, MBOM is created by manufacturing engineers and it reflects the way product is built. It usually structured to reflect manufacturing assembly operations, workstations, ordering process, etc. In other words, MBOM is a reflection of manufacturing process based on information from product design. Company can decide to improve manufacturing process for existing product. It means most probably no changes for CAD design and EBOM, but will require to create a new version of MBOM.

As a result of that, MBOM has dual dependence of both correct engineering information from PLM system and manufacturing constraints and part information management by ERP. Both are absolutely important. By placing MBOM in PLM system company can create a complexity of manufacturing process planning in ERP. At the same time, ERP system (more specifically manufacturing modules) are not providing dedicated BOM planning tools capable to handle information from EBOM and MBOM simultaneously.

What is my conclusion? Manufacturing BOM is stuck between a rock and a hard places. It must reflect manufacturing process and stay connected to both PLM and ERP environment. It creates a high level of complexity for existing technologies and tools. To create a cohesive environment to manage MBOM is tricky and usually requires significant services and customization. Just my thoughts…

Best, Oleg


PLM and growing community of fabless manufacturers

October 6, 2014

plm-fabless-global-communities

There are so many interesting trends to watch these days in manufacturing. I’ve been blogging about Kickstarter projects and manufacturing startups. Another interesting topic to speak about is so called "fabless manufacturing".

A bit history. Fabless manufacturing is not a new thing. Navigate to the following Wikipedia about Fabless Manufacturing to refresh your knowledge. Fabless manufacturing roots are going back to semiconductor manufacturing.

Prior to the 1980s, the semiconductor industry was vertically integrated. Semiconductor companies owned and operated their own silicon-wafer fabrication facilities and developed their own process technology for manufacturing their chips. These companies also carried out the assembly and testing of their chips, the fabrication. Meanwhile, with the help of private-equity funding, smaller companies began to form, with experienced engineers exercising their entrepreneurial prowess by establishing their own IC design companies focused on innovative chip solutions.[citation needed]

As with most technology-intensive industries, the silicon manufacturing process presents high barriers to entry into the market, especially for small start-up companies. So, Integrated Device Manufacturers (IDMs) had excess production capacity. The smaller companies began to take advantage of the opportunity- relying on IDMs to manufacture the chips they were designing. These conditions underlay the birth of the fabless business model. Companies were manufacturing integrated circuits (ICs) without owning a fabrication plant. Simultaneously, the foundry industry was established by Dr. Morris Chang with the founding of Taiwan Semiconductor Manufacturing Corporation (TSMC). Foundries became the cornerstone of the fabless model, providing a non-competitive manufacturing partner for fabless companies.

With latest development in global manufacturing, internet and 3D printing, we can probably see "fabless" model going beyond IC manufacturers. What was true for semiconductors, today is applying on other manufacturing segments as well. Many analysts and strategists these days are referencing developing of new forms of manufacturing as a next industrial revolution. Companies like Local Motors, Quirky and others are energizing community of developers to innovate and heavy outsource, or to be more correct – collaborate with fabrication and 3D printing facilities.

So, you can ask me – where it comes to PLM? Here is the thing. Such neo-manufacturing activity is obviously looking for software tools to support new type of collaboration between community of designers and fabrication companies. Most of existing PLM tools are focused on companies rather than on new type of manufacturing communities. Aerospace and automotive industries with intensive design and manufacturing supply chain can be a good reference of similar activities. But, very often, it serves a closed community or specific project/program to collaborate on. More radical changes needed. Recent turn of some CAD/PLM vendors towards cloud is a good starting point to change PLM collaboration model.

What is my conclusion? Manufacturing industry is changing. Companies are less vertically integrated these days. New type of manufacturing communities will require new design and collaboration tools to connect designers, engineers, suppliers and manufacturing into single connected eco-system. Just my thoughts…

Best, Oleg


Accelerate 2014: PLM360 and the state of manufacturing industry

September 18, 2014

accelerate-plm-360-event

I’m attending Accelerate 2014 PLM360 event these days in Boston. This is the first ever live gathering of Autodesk PLM360 community. According to Ron Locking who kicked the event yesterday, it comes to a total number of about 200 attendees combined of customers, partners and industry analysts.

So, why Boston? The welcome joke triggered by analysts Chad Jackson, Jim Brown and Stan Przybylinski speculated – it was all about “beer innovation” that inspired Autodesk people to have this even in Boston. However, in my view, we have more reasons for that – high concentration of PLM companies around PLM highway, vibrant community of manufacturing companies and startups as well as cross-road location between Europe and U.S. Event is taking place in Boston District Hall in the middle of Seaport district. The place brought my memories back to Smart Summit (first SmarTeam customer event in 2000). Back that days, the only building in Boston Seaport district was Seaport Hotel. Now, Seaport district looks completely different.

boston-seaport-district

Getting back to “beer innovation”, I found an interesting association between U.S. beer craftsmanship and state of PLM and manufacturing industry these days. It comes to empowering of small companies to innovate. It happened to small breweries in U.S. back in 1978. It is a good lesson to learn. Here is a passage about brewery innovation:

On October 14, 1978, President Jimmy Carter signed H.R. 1337 into law, which legalized the home production of a small amount of beer or wine for personal consumption.Since then, the United States has witnessed a resurgence of brewing culture and the widespread proliferation of small breweries. By March 1986, five brewpubs had opened in the United States. The total number of breweries rose from 42 in 1978 to over 2,750 in 2012, reaching or exceeding the number of breweries estimated to have existed during the colonial period. Virtually all of this growth is attributable to small, independent breweries.Today, the U.S. craft beer industry employs over 100,000 individuals brewing 15.6 million barrels of beer per year, generating roughly $14.3 billion in retail sales.

Back to the event itself. Who attended? I found a very interesting mixture of companies attended the event. First and most important is to see a diverse set of manufacturing companies using PLM360 and sharing their stories. Second – a very interesting bunch of partners and service providers representing new “cloud” ecosystem. The last, but probably the most interesting are companies that related to so called “new manufacturing companies”. These days small manufacturing are starting to make difference. And actually, you can see it very well by looking on the list Accelerate 2014 attendee list – Quirky, Dragon Innovation and few others. These companies represents a complete new story in manufacturing industry. Enabled by internet and modern technologies, new manufacturing companies are representing a complete new way to develop products. And, their demand is to have new design and engineering tools.

Specifically I wanted to focus on how PLM can help to new manufacturing startups. Manufacturing is hard. To get from zero to one in manufacturing is not simple. However, to come from one to many is probably even more challenging. It requires a complete new approach and new tools.

manufacturing-is-hard

Agility, speed and flexibility. This is probably a word that explains in a best way how manufacturing companies are using PLM360. It is interesting to see that these definitions are common between both group of customers – larger established manufacturers and new growing startups. Large companies are learning how to solve specific product development business problems using tools like PLM360. At the same time, small companies are learning how to bring some order in their ad-hoc product development environment. So, both groups have something to learn from each other and it looks like PLM360 can give them some common grounds to innovate as a community.

small-vs-big-anagnost-manufacturing

Innovation was one of the most frequently discussed topics during these two days. The product innovation panel discussion gathered a diverse set of attendees – analysts, customers, vendors.

innovation-product-panel

PLM360 is one of the tools coming as an answer on “manufacturing challenge”. However, it doesn’t come alone. PLM360 comes as part of new cloud eco-system Autodesk develops these days – Autodesk A360, Autodesk Fusion360 and some others.

autodesk-cloud-eco-system

What is my conclusion? The modern manufacturing world is a complex combination of new challenges and old problems. New manufacturing companies, communities, new type of products, unprecedented level of product complexity even for small manufacturing – all together representing a new state of manufacturing industry. It requires new approach in design and product collaboration tool. PLM360 gives some good examples and lesson learned in that space. Just my thoughts..

Best, Oleg

Disclaimer: I’m Autodesk employee. The views and opinions expressed in this blog are my own only and in no way represent the views, positions or opinions – expressed or implied – of my employer.


Will future PLM order parts for makers?

September 10, 2014

makers-plm-order-parts

Have you heard about "makers"? If you are in manufacturing business, you probably should pay attention to that. You may hear about "makers movement" these days as a new industrial revolution changing the way people are making stuff. I can recommend you Chris Anderson’s book to read more about that.

New digital technologies are going to change the way we design and manufacturing products. It appears today largely as a new group of manufacturing entrepreneurs, startup companies and small manufacturing firms. PLM vendors are not very successful in providing solutions for SME companies. Historically it was a tough call for PLM vendors. It was too competitive and confusing with major PLM business – large OEMs and suppliers. With new manufacturing eco-system, the situation is getting very interesting. One of the objectives of PLM is to help company to innovate and delivery new products fast. It sounds like a very compelling reason for new manufacturing startups. Read my earlier blog – Why Kickstarter projects need PLM? This is an opportunity for new PLM solutions. However, it looks like something that PLM vendors are missing for the moment – PLM and Manufacturing Startups: Potential Mismatch? We have a complexity of new manufacturing products, multiplied by a complexity of new type of manufacturing processes. It looks like an existing enterprise software doesn’t fit very well a new and growing eco-system of manufacturing companies.

Let me take an example of PLM and ERP system breakdown. The traditional split between PLM and ERP is usually presented as "innovation vs. transactions". PLM system is responsible for engineering part of the business and takes hands off from ordering by moving business process to ERP. This is works well for traditional manufacturing companies. However, PLM v ERP interplay is a very challenging and complicated process in every company. Would it be the same for new type of manufacturing entrepreneurs? This is a good question to ask… I’m pretty sure that new manufacturing companies can question a need to have multiple systems- they will be looking for some sort of intelligent online solutions that can easy interplay together and cover both engineering and manufacturing piece.

My attention was caught by Fortune article – In B2B e-commerce, Alibaba has solved the one problem Amazon can’t. Read the article. I found it very interesting. It is not about PLM. However, I captured a passage that speaks about B2B and supply chain communication.

But there is one true giant in the category: Alibaba, the Chinese retail darling that last week revealed plans for a $21.12 billion initial public offering, which has dominated in B2B e-commerce. I was reminded of this over the weekend while listening to Planet Money’s entertaining explainer of the Alibaba wholesale market. Through Alibaba.com and 1688.com, the company provides to people everywhere access to the Chinese supply chain. This means tinkerers, builders, entrepreneurs, and small businesses can order custom motors and parts from Chinese factories without having to travel there, find a scout, and forge a relationship with a manufacturer before doing business. It opens up the world of international suppliers to people who wouldn’t normally have access to it. They can buy in bulk through Alibaba, which acts as a trusted third party, vouching for the transaction.

It made me think about a potential of PLM software to get connected to online e-commerce systems to process orders and even more- optimizing product design and engineering solution based on that. It probably sounds crazy. However, who knows… Many things that we knew as a separate parts in the past, now unified as a single products. Think about iPhone, which replaced many existing devices. Today’s Apple Watch and Apple Pay announcements are hinting about future transformation of well-known habits. There are some other examples as well.

What is my conclusion? I like to quote Mark Andreessen for the conclusion – "Software is eating the world". There are lot of traditional system breakdown that are going to be transformed and disappear in the future. What looks like a right split between product innovation (PLM) and order-transaction (ERP) today, can be challenged in the future. So, who knows? Maybe tomorrow PLM systems will order parts from Amazon B2B e-commerce web services? Just my thoughts…

Best, Oleg


Existing data prevents companies to improve Part Numbers?

August 15, 2014

historical-part-numbers

Part Numbers is a fascinating topic. I’m coming back to blog about what is the best approach to manage Part Numbers. My last post about it was – Part Numbers are hard. How to think about data first? was just few weeks ago. In that article, I outlined few principles how to keep PN separate from surrounding data focusing on different aspects of parts – description, classification, configurations, suppliers, etc.

Yesterday, my attention was caught by ThomasNet article – Are Part Numbers Too Smart for Their Own Good? The article nailed down a key issue why companies are still having difficulties with management of Part Numbers. Nothing works from scratch in engineering companies. Complexity of characteristics and history of existing Part Numbers and products are making real difficulties to adopt new PN management concepts. The following passage explains the problem:

Another problem with descriptive numbering is that the description can become out of date and irrelevant over time. Individual parts can have their own life cycles; if a part has been identified according to the product, what happens if that product is discontinued but the part continues to be used in a newer product? Or what if a manufacturer changes vendors and the part number contains the name of the vendor that originally provided the piece?

Gilhooley admits that some Ultra Consultants clients have decided that switching from descriptive to auto-generated numbering would require too much organizational change. Some companies stick with old systems, and some opt for hybrid systems that perhaps retain descriptive numbers for existing parts but use auto-generated numbers for new parts.

It looks like there is no single solution or best practice to solve the problem. The "traditional" engineering approach to keep options to manage a diverse set company configuration looks like the only possible way to solve this problem in existing PLM/ERP systems.

What is my conclusion? History keeps customers from moving forward. There are two aspects of complexity in Part Numbers: 1/ complexity of definition and data classification; 2/ historical records of PN in every company including catalogs and existing products. Together, they create a block to make any changes in existing PN schema and prevent companies from migration towards new approaches. New data modeling technologies must be invented to handle existing data as well as supporting customers to migrate into modern PLM and ERP solutions. Just my thoughts…

Best, Oleg


Will public clouds help enterprises to crunch engineering data?

August 6, 2014

google-data-center-crunches-engineering-data

The scale and complexity of the data is growing tremendously these days. If you go back 20 years, the challenge for PDM / PLM companies was how to manage revisions CAD files. Now we have much more data coming into engineering department. Data about simulations and analysis, information about supply chain, online catalog parts and lot of other things. Product requirements are transformed from simple word file into complex data with information about customers and their needs. Companies are starting to capture information about how customers are using products. Sensors and other monitoring systems are everywhere. The ability to monitor products in real life creates additional opportunities – how to fix problems and optimize design and manufacturing.

Here is the problem… Despite strong trend towards cheaper computing resources, when it comes to the need to apply brute computing force, it still doesn’t come for free. Services like Amazon S3 are relatively cheap. However, if we you want to crunch and make analysis and/or processing of large sets of data, you will need to pay. Another aspect is related to performance. People are expecting software to work at a speed of user thinking process. Imagine, you want to produce design alternatives for your future product. In many situations, to wait few hours won’t be acceptable. It will be destructing users and they won’t use such system after all.

Manufacturing leadership article Google’s Big Data IoT Play For Manufacturing speaks exactly about that. What if the power of web giants like Google can be used to process engineering and manufacturing data. I found explanation provided by Tom Howe, Google’s senior enterprise consultant for manufacturing quite interesting. Here is the passage explaining Google’s approach.

Google’s approach, said Howe, is to focus on three key enabling platforms for the future: 1/ Cloud networks that are global, scalable and pervasive; 2/ Analytics and collection tools that allow companies to get answers to big data questions in 10 minutes, not 10 days; 3/ And a team of experts that understands what questions to ask and how to extract meaningful results from a deluge of data. At Google, he explained, there are analytics teams assigned to every functional area of the company. “There’s no such thing as a gut decision at Google,” said Howe.

It sounds to me like viable approach. However, it made me think about what will make Google and similar computing power holders to sell it to enterprise companies. Google ‘s biggest value is not to selling computing resources. Google business is selling ads… based on data. My hunch there are two potential reasons for Google to support manufacturing data inititatives – potential to develop Google platform for manufacturing apps and value of data. The first one is straightforward – Google wants more companies in their eco-system. I found the second one more interesting. What if manufacturing companies and Google will find a way to get an insight from engineering data useful for their business? Or even more – improving their core business.

What is my conclusion? I’m sure in the future data will become the next oil. The value of getting access to the data can be huge. The challenge to get that access is significant. Companies won’t allow Google as well as PLM companies simply use the data. Companies are very concerned about IP protection and security. To balance between accessing data, providing value proposition and gleaning insight and additional information from data can be an interesting play. For all parties involved… Just my thoughts..

Best, Oleg

Photo courtesy of Google Inc.


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