Why PLM is failing to manage multi-disciplinary BOM?

May 21, 2015

high-tech-electronic

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.

Engineering.com 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

bom-complexity-1

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 FreeDigitalPhotos.net

 


What PLM industry can learn from… Hollywood?

May 13, 2015

PLM-hollywood

I’ve been reading a blog Getting PLM right: no one answer by Monica Schnitger. It is a slick writeup started from one of the most popular questions in PLM community – Why it makes my head hurt when I think I need/want/cloud use/maybe should think about PLM implementations? Monica speaks about why PLM creates so many problems that just thinking about that makes you feel bad. The core issue is simple – engineering and manufacturing is very individual. Each PLM project is different and it is hard to create or even think about “standard PLM implementation”. Although, I guess, some vendors will disagree with me and will try to sell you out-of-the-box PLM implementations. Here is the passage explaining the uniqueness of PLM implementations:

The concept of product lifecycle management, that you track many aspects of your product from inception through design to making to servicing to retiring/replacing — that’s common. After that, every case is unique. Also unique to each company contemplating PLM is its motivation. Do you have a specific quality problem? Need to better communicate with suppliers? Or are you trying to create a major corporate shift (“we want to be #1 or #2 in our industry”) and want to use PLM as a lever to re-examine old processes and shake things up? Each of these is a great reason for PLM, but everything downstream from that decision will be different.

A very nice video at the end of the article give you a perspective on modern trends in PLM implementations time and cost. Watch brilliant spoof by Jim Brown about new PLM tech called SprayON. Just spray PLM on your problem and it is over! Nice… More seriously, you can learn how modern cloud PLM products and technologies can create a new reality in PLM implementations in terms of effort, time and resources. To conclusion is simple – since cloud PLM can be instantaneously at your disposal, use it for a specific project first to get it done, show results, prove a value and move the next projects. This is great way to make PLM easier. However, PLM implementations are still hard and there are things that cloud PLM cannot do for you.

My thoughts about potentially magical new way to implementation PLM, took me to…. Hollywood. Have you heard about business approach called Hollywood Model in business? Navigate to the following NY Times magazine article – What Hollywood Can Teach Us About the Future of Work. The basic idea of Hollywood model is pretty simple. A project can be done by a team of professionals available on demand and assembled together for a specific period of time with the goal to make it happen and deliver the result. Here the passage, which explains that.

This approach to business is sometimes called the “Hollywood model.” A project is identified; a team is assembled; it works together for precisely as long as is needed to complete the task; then the team disbands. This short-­term, project-­based business structure is an alternative to the corporate model, in which capital is spent up front to build a business, which then hires workers for long-­term, open-­ended jobs that can last for years, even a lifetime. It’s also distinct from the Uber-­style “gig economy,” which is designed to take care of extremely short-­term tasks, manageable by one person, typically in less than a day.

With the Hollywood model, ad hoc teams carry out projects that are large and complex, requiring many different people with complementary skills. The Hollywood model is now used to build bridges, design apps or start restaurants. Many cosmetics companies assemble a temporary team of aestheticians and technical experts to develop new products, then hand off the actual production to a factory, which does have long-­term employees. (The big studios, actually, work the same way: While the production of the movie is done by temps, marketing and distribution are typically handled by professionals with long-­term jobs.)

Of course, there are lot of differences between movie production and manufacturing. But if you think more, you might think about it a bit differently. Especially if you look over the growing number of open source hardware projects, hardware startups, and other manufacturing initiatives. According to Ben Einstein of BoltVC in Boston, you can assemble hardware team of 8 people to create a new product. Read more here . The team will be working with many contractors in design, engineering, manufacturing and related fields to bring product to life. And remember, despite the fact hardware is still hard, there are many examples of small teams created hugely successful products.

In my earlier article Why PLM should revise NPI process?, I’ve been talking how future is shifting towards agile manufacturing processes and why PLM systems should revise the idea of structured workflow process as a fundamental approach to manage engineering and manufacturing process. I think, this is where future will take us. By the way, I didn’t find a hint on workflow processes in NY Times article about Hollywood production.

What is my conclusion? Cloud PLM is a step in the right direction. To remove a burden of hardware, installations and coding for customization is absolutely important. At the same time, it is tough to think about PLM as a life changing event for manufacturing company. Nobody likes the change and it is painful to get it (even with help of PLM consultants). But industry is changing. Manufacturing is shifting towards different organizational models. Mass production, large investments, big factories and long product lifecycle are going to be a thing in the past. Flat organizations, agile teams, pulling experience, ideas, skills, money and customers on demand – this is a way to think about future of manufacturing. The processes and software to manage it will change too. A note for software vendors, engineering IT managers and PLM practitioners… Just my thoughts…

Best, Oleg

picture credit NYTimes article. Illustration by Andrew Rae.


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

May 12, 2015

manufacturing-as-a-service

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.

idc-manufacturing-innovation

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 FreeDigitalPhotos.net


The optimal org size is shrinking. Will manufacturing follow?

May 9, 2015

business-netowkr

Traditional manufacturing companies are associated with large manufacturing facilities, manufacturing equipment and significant initial investment to take business off the ground. It is still true in many aspects. At the same time, manufacturing is changing. It becomes smaller, more agile and global. In addition to that, changes in IP ownership reshaping manufacturing industry. Similar how open source software changed the landscape of web development in the last decade, we can see new open source hardware is changing some fundamentals of manufacturing business too. What does it mean for future manufacturing companies?

The blog post "The billion-dollar, one-person startup" by Roy Bahat speaks about shrinking of optimal organizational size. It starts from a twitter chat bringing examples of software companies, investments and number of employees. Well… I’m not sure if we are going to see virtual no-employee startup with $1B valuation any time soon. At the same time, I found the discussion around this interesting. Here is an interesting passage that caught my special attention:

In the 1930s, the economist Ronald Coase theorized that companies exist because the cost of doing business inside a firm is less than the cost of doing business with parties outside of the firm. Trust, shared culture, more information, and other factors made it so you were more likely to trust an accountant who worked for your company than one who worked for someone else.

So, if the cost of doing business with outsiders falls, firm sizes might shrink – dramatically. As the quality of outside services goes up, and their way of doing business becomes more transparent to customers, and many companies who work together share a common culture (including communication tools, norms of behavior, and other patterns), companies might use outside partners for functions they’d have previously run themselves

Those companies can focus on what they do best – and that advantage might be delivered (as it was in the cases of Instagram and WhatsApp) by a tiny team. Maybe, one day, by a single person.

It made me think about surge of new hardware companies. While hardware is still hard, new manufacturing businesses are small, agile and relies on a network of providers – designers, freelancers, specialized shops, contract manufacturers and other service providers. If I will follow the same logic of the improved efficiency when doing business with outsiders, in the future we can see much smaller manufacturing companies focusing on what they can do best – innovate and develop new products and business models. If my assumption has some grounds, then we can see a growing number of small manufacturing organization operating in the network of diversified suppliers and manufacturing shops.

What is my conclusion? The manufacturing business is transforming. Large companies won’t disappear any time soon. However, I can imagine a growing part of small, agile manufacturing companies relying on an eco-system of suppliers and contract manufacturers. It will impact engineering and manufacturing software and will demand a new type of design, engineering and management tools. Just my thoughts…

Best, Oleg

Image courtesy of cooldesign at FreeDigitalPhotos.net


Product cost management and global manufacturing

May 7, 2015

global-network-cost-management

Product cost is the top priority for every manufacturing organization in the world. It can be large OEM or small hardware startup. To figure out how to manage and control product cost is absolutely important. I’ve been touching cost management earlier on my blog – CAD, PLM and Product Cost and PLM, Product Cost and Bridge to Nowhere? But it was long time ago and I thought it would be a good idea to reset a conversation about product cost management.

Manufacturing is global. Over the past decades manufacturing companies leveraged low labor cost country to offshore manufacturing and lower production cost. The situation is getting more interesting today. Marketwatch article – Record number of manufacturing jobs returning to America speaks about interesting trends in manufacturing and production cost optimization. Manufacturing companies are coming back to U.S. But this process is much more diverse rather than just moving production back from Chine to U.S. Here is an interesting passage, which can give you some perspective on the process:

Sixty thousand manufacturing jobs were added in the U.S. in 2014, versus 12,000 in 2003, either through so-called reshoring, in which American companies bring jobs back to the U.S., or foreign direct investment, in which foreign companies move production to the U.S., according to a study from the Reshoring Initiative. In contrast, as many as 50,000 jobs were “offshored” last year, a decline from about 150,000 in 2003.

To meet consumer demand, companies increasingly want to make products closer to where their customers are and react to trends and ship faster. Additionally, there are shipping costs and import duties to contend with when a company manufactures the products that it intends to sell into the U.S. market overseas. Meanwhile, such variables as environmental issues, product-quality scandals, and incidents like the 2013 Bangladesh garment-factory collapse or this year’s West Coast port slowdown have made domestic production more appealing. Government incentives and a relatively skilled U.S. workforce are also among top factors.

It made me think about increasing interest for diversified cost management. The decision about manufacturing depends on many factors and trends – market, demand, capacities, transportation cost and many others. Small manufacturing firms can use contract manufacturing in different parts of the world depending on their needs, customers, supplies and priorities. It is absolutely important to manage cost in a holistic way that can account for a diverse factors – product design, configurations, component based, labor, transportation, maintenance, etc. Product data and related information can play a significant role to provide new type of product cost management solutions.

What is my conclusion? New trends in manufacturing and diversification of manufacturing options can demand a new approach in product cost management. It is about collecting and managing a diverse set of information about product and other related information forming product cost. To manage volume, velocity and diversity of this information can be a challenging task. This is also an opportunity for PLM vendors and startups focusing on big data and analytics. Just my thoughts…

Best, Oleg

Image courtesy of cooldesign at FreeDigitalPhotos.net


PLM has a weak point in cloud-based supply chain

March 24, 2015

Global-plm-supply-network

My attention was caught by Manufacturing Trends to watch in 2015 article written by Jeff Moad at Manufacturing Leadership Community. I missed that writing few months ago when it was published. I found one of them very interesting – The Rise of Cloud-based Supply Chain. Here is a passage from the article:

The Rise of Cloud-based Supply Chains. As the manufacturing landscape becomes more interconnected and interdependent, requiring close cooperative links with multiple supply chain partners in multiple locations for materials, parts production and the support of new multi-channel services, companies will increasingly adopt cloud and more predictive web-based supply chain software to help manage and swiftly reconfigure their networks to gain real-time visibility, cut time-to-market, and respond faster to customer changes and potentially disruptive political and natural risks.

It made me think again about new enterprise software reality for PLM vendors and changes in manufacturing eco-system. The interconnected manufacturing landscape is a key. It gives an interesting opportunity for software vendors thinking about cloud software as a platform, rather than a bunch of servers hosted elsewhere. At the same time, it raises many questions about how new generation of enterprise software will handle modern people and organization paradigm. One of the challenges for many PLM products and platforms is related to their ability to manage multiple organizations in distributed networks. Which can be a weak point for many of them to capture cloud-based supply chain opportunity.

What is my conclusion? Modern PLM software can embrace new paradigm of interconnected and interdependent manufacturing environment. This is quite different from traditional environments of OEMs and suppliers. The ability to manage distributed processes will become critical and can be one of the future differentiators for some PLM vendors. It looks like born in the cloud PLM technologies can gain some advantages here. Just my thoughts…

Best, Oleg

Image courtesy of cooldesign at FreeDigitalPhotos.net


PLM and changes in manufacturing eco-system

February 23, 2015

new-manufacturing-ecosystem

In my previous post, I summarized changes in enterprise software that are going to influence a future of PLM. But enterprise software is not only thing that impacting PLM. A lot of new things are happening in manufacturing itself. You probably heard about “new industrial revolution”, “Manufacturing 4.0″, “makers movement”, etc. It is hard to put right tags on every new thing and classify them. I also think it is too early. However, there is one thing clear to me – changes are coming. These changes will impact the overall manufacturing eco-system and status-quo. What will be a manufacturing environment of the future and how it will impact product lifecycle management?

I’ve been trying to capture 3 most important trends I’m observing related to fundamental changes in manufacturing:

what-changing-in-mfg-1

1- Global. Manufacturing business is going global in many ways. It is impossible to imagine manufacturing company these days that is completely disconnected from rest of the world. Small manufacturing firms are multi-located, using rich supply network and manufacturing facilities. Even more interesting, the smaller size you go, the dependencies is getting more interesting. Individual makers, mini-factories are getting even more power and distribution efficiency.

2- Agile network. In many places, hierarchical structures are displaced with the power of network. It is a very interesting, since size won’t matter in the future. Network is more powerful compared to single hierarchical manufacturing structure. The power of communities for manufacturing is yet to be discovered.

3- IP paradigm changes. Manufacturing is going to challenge one of the most fundamental thing – IP ownership. Traditionally companies are owners of IP on manufactured things. Patents, trade secrets, design and manufacturing techniques protection. These are things we are familiar with. What is coming? Manufacturing companies such as Tesla are opening patent portfolios. Open Source Hardware is new trend that you can find similar to Open Source Software. The last one changed the landscape of software as we knew before. How OSHW will change manufacturing?

What is my conclusion? The new manufacturing eco-system is building up in front of us. It comes in many ways as combination of new possibilities of digital manufacturing, 3D printing, scaling, etc. It brings fundamental changes in the process of manufacturing, product development and innovation. Small is a new big. Digital technologies are going to amplify manufacturing potential similar how back 18th century first industrial revolution replaced human power with machine power. The new manufacturing will be built on top of new principles of globalization, networks and open IP. The shift towards networks from centralized databases, open communities with open source hardware and others can influence existing PLM paradigms. Just my thoughts…

Best, Oleg

Image courtesy of Idea go at FreeDigitalPhotos.net


Follow

Get every new post delivered to your Inbox.

Join 276 other followers