This is the third post on Bill of Material handling for different types of companies, this time the focus on Configure To Order (CTO). In the CTO process, products are assembled and configured based on customer requirements. This means there is no more engineering needed when customer requirements are known. CTO examples are, the ordering process of a car with all its options, or ordering a personal computer over the internet.
So what has Configure To Order to do with PLM as there is no engineering?
The main PLM activity takes places when designing the configurable product. Designing a product that is configurable, requires a complete different approach as compared to Engineering to Order or Build to Order. Although we see a similar Configure to Order activity in the R&D departments of companies that follow the Build to Order process. They are also designing products or modules that can be used as-is in customer specific orders as part of the solution.
The challenge of CTO is to design products that are modular, and where options and variants are designed on a common platform with common interfaces. If you look to the dashboard of a car you will see placeholders for additional options (in case you have the minimal car version) and also you might see that for example the radio display in a basic car version differs from the complete board computer in the luxury version. The common platform is one dashboard, fitting to numerous options.
An engineering department will not focus on designing and defining each of the possible combinations of options as this would be impossible to manage. What can be managed is the common platform (the baseline) and all different options on top of this baseline.
So what happens with the BOM?
The initial design of configurable products goes through similar steps as the BTO process, which means starting from a conceptual BOM, moving to an Engineering BOM (eBOM) and finally produce a BOM for manufacturing (mBOM). The difference is that in the CTO process the mBOM is not developed for just one product, but contains all definitions for all possible products. In this situation we talk about a generic mBOM.
Only when a customer order exists, the generic mBOM is resolved into a specific mBOM for this customer order, which then can be sent to the ERP system for execution.
In a generic BOM the relations are managed by filters. These filters define the effectivity of the link, in simple words if the relation between two parts in the BOM is valid (and shown) or not. There are various ways to define effectivity – with again a differentiation in usage
- revision based effectivity – which means the relation between two items is valid in case the revisions match
- date effectivity – which means the relation is valid during a certain time interval
Both methods are used most of the time for non-configurable products. The revision and date effectivity are used to be able to track the product history through time and therefore to have full traceability. But this does not work if you want to configure every time a customer specific order.
In that case we use unit or option based filtering.
- unit effectivity – which means the relation between two items is valid for a unit (or a range of units) produced. For example a batch of products or a unique product with a serial number
- option effectivity – which means the relation between two items is valid in case a certain condition is valid. Which condition depends on the configuration rules for this option. Example of options are: color, version, country
It is clear that unit and option based filtering of a BOM can lead to a conceptual complex product definition which goes beyond the BOM for Dummies target. Below an illustration of the various filter concepts (oops the animated gif does not work – i will investigate):
The benefit of this filtering approach is that there is a minimum of redundancy of data to manage. This makes it a common practice in the aerospace and automotive industry. An example describing all the complexity can be found for example here, but I am sure on this level there are enough publications and studies available.
And what about the CAD ?
I will write a separate post on this topic, as all the possible interactions and use cases with CAD are a topic on its own. You can imagine, having the 3D virtual world combined with a configurable BOM brings a lot of benefits
What PLM functions are required to support Configure to Order ?
- Project management – not so much focus here as the delivery project for a customer does not require much customer interaction. Of course, the product development processes requires advanced capabilities which I will address later in a future post.
- Document management – same approach as for project management. The product related documentation needs to exist and secured. Customer specific documentation can be generated often automatically.
- Product Management – managing all released and available components for a solution, related to their Bill of Materials. Often part of product management is the classification of product families and its related modules
- Item management – The main activities here are in the mBOM area. Capabilities for BOM generation (eBOM/mBOM), baseline and compare using filtering (unit based / option based) in order to support the definition if the manufactured product
- Workflow processes – As we are dealing with standardized components in the BOM, the Engineering Change Request (ECR) and Engineering Change Order (ECO) processes will be the core for changes. And as we want to manage controlled manufacturing definition, the Manufacturer Change Order process and Standard Item Approval process are often implemented
Optional:
- Requirements Management – specially for complex products, tracking of individual requirements and their implementation, can save time and costs during delivery to understand and handle the complex platform
- Service Management – as an extension of item management. When a customer specific order has been delivered it might be still interesting for the company that delivered the product to keep traceability of the customer configuration for service options – managing the Service and As-Built BOM
- Product Configurator – the reason I write it as optional, is because the target is order execution, which is not a PLM role anymore. The ERP system should be able to resolve the full mBOM for an order. The PLM product configuration definition is done through Product and Item management. Depending on the customer environment the role of configurator might be found in PLM in case ERP does not have the adequate tools.
Conclusion:
It is hard to describe the Configure To Order process in the scope of BOM for Dummies. As various detailed concepts exist per industry there is no generic standard. This is often the area where the PLM system, the PLM users and implementers are challenged the most: to make it workable, understandable and maintainable
Next time some industry specific observations for a change
6 comments
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February 15, 2010 at 11:24 am
Oleg Shilovitsky
Jos, I think the key of the successful Configuration to Order implementation is to integrate your BOM solution with Sales Configuration and Manufacturing planning. In my view, the strongest supporters of ERP-based PLM can argue by saying both (Sales Configuratort and MRP) are naturally coming from ERP system. What is your take on that? How do you think, possible to have end-to-end CTO system? My fear is that having multiple BOMs can be very tricky for the successful implementation. I had chance to post about synchronized Bill of Material before to share my thoughts on that. http://plmtwine.com/2009/04/02/is-it-time-for-a-synchronized-bill-of-materials/ Thanks, Oleg
Oleg hi,
I am not sure if I understood the point. In my opinion CTO has a complex internal process to build configurable products, using various BOM representations needed for different audiences.
But when the configurable product exists, the order delivery process is really a sales configurator / ERP activity – as all engineering is done before. If there is still engineering needed, I would assume it is the BTO approach.
And finally I do not see different BOMs as an issue – as long as it does not need to be managed by one person – every person can have his/her prefered BOM view to my opion 🙂
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February 16, 2010 at 9:01 am
vishwanathn
Jos,
Nice write up. Agree with your point on views to Oleg for sales and Engineering. That is well addressed.
A couple of points from my side.
1) Configuration management – I would have put this in a mandatory mode than optional for the following reasons
a) Feasible configurations to be made available for sales and this has to be driven from Engineering
b) Feasible combinations of configurations needs to be up to date and hence this cannot be optional
2) BoM Management – In my opinion, this should be more of platform driven and hence an architecture based BoM specification will work well for a CTO model. While this is debatable, architecture based approach looks more of a feasibility in a top down BoM development (like in CTO) rather than a bottom up BoM development
3) Quality Management – This is something I see coming up as we move forward in CTO. With cost of quality becoming an increasing focus these days, a quality management for CTO in PLM will be a great value add
Your thoughts?
Vishy hi,
fully agree with point 1, struggling with mid-market customer to fully implement this.
Regarding point 2 not sure if i got the full point – can you elaborate on this
And point 3 I see the same trend – perhaps Toyota is also an example for more focus on it. In addition you see more and more the concepts of systems engineering bubbling up in traditional industries.
Best regards
Jos
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February 23, 2010 at 2:18 pm
vishwanathn
Jos,
For point 2, elaborating could be as much as this write up. Will put up something on that in my blog and link up soon. If you want to discuss, we could take that offline.
Regards,
-Vishy
Vishy hi,
I am looking forward to your post. I can imagine too much to write. Afterwards we can always go in details offline
Thanks
Jos
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May 25, 2010 at 11:31 am
prabhu
Hi,
I have studied all the questions, but i have still basics questions, can anyone can help me..
1.How the product configuration done by sales team and can be linked to bill of material for manufacturing (This is applicable only for CTO and also this product accepted by Engineering department.)
2.How my bill of material structure should be…??
3.Does attributes is mandatory to link the BOM..??
4.In commercial vehicle, how many of them introduced product configuration
Dear prabhu, many questions and not easy to answer. I will send you an email to get in touch and better understand the context of your questions.
Best regards
Jos
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March 22, 2012 at 5:07 pm
Jeff Stinchcomb
Hi Jos
I have recently started a new job and the position initially offered to me was Change Manager. However, I have been asked to look at Configuration Control and provide reccomendations for it’s implementation and/or improvement. At present CC with this new company is non existent apart from a live Parts Database. BOMs are continually changing as a new part is added to a particular system.
As I have limited knowledge of Config. control, BOMs and product structure, could you advise me of the right questions I should be asking to move towards any recommendations. I realise that this is a grey area and I may be asking too much, but any help would be very welcomed. Maybe we could talk offline if you send me an e mail address.
Thanks for your time
Jeff Stinchcomb
Jeff hi – I agree there is a lot to discover in this area, which most of the time is not public available. I will send you an email in order to be able to discuss this topic offline.
Best regards
Jos
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January 29, 2016 at 9:22 pm
Jeff Erno (@ernoj)
How much have you looked into the 3DEXPERIENCE platform? From what I can tell there is a lot done in this area. I would love to hear whether you have looked and what you think.
Jeff thanks for your question. It is not easy to provide an 100 % accurate answer on your question. I know the 3dexperience platform which has good BOM capabilities like Teamcenter and Windchill. It all depends on the typical scenarios you want to support and the product complexity. So main question is before jumping into a product, what is the topic you want to solve ?
Best regards
Jos
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