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Last week I saw once more a post, where free PLM software was offered and combined with the open source aura it should be THE solution for companies that want to implement PLM during this economical downturn. I believe this is a big mistake and for the following reasons:
WYPIWYG (What You Pay Is What You Get)
I learned that the WYPIWYG rule usually applies in the software world. Free software is nice, but does not guarantee that in case some functionality is missing or corrupt, that it will be fixed. So in case a company wants to implement the free PLM software, what to do if you feel something important for your business is missing ? You can ask the software provider to implement it for you – but will this be done ? Probably only when it is easy to achieve it will be done, but no commitment as the software is for free.
To assure it can be done, the software vendor will say it is open source software, so it can be changed if you want it. But who is going to make the change ? The mid-market company that thought to have selected an economical solution is not an IT-company – so who to hire? The open source software development company ? And this is what their business model is based on – they have the expertise with their software, so probably they are the best to adapt the open source software – not for free of course – and they learn from that but the customer pays.
Conclusion: there is no such thing as a free lunch.
It does not mean that all open source software is bad. Linux has shown that for an operating system it makes sense. Operating systems are 100 % in the scope of IT. PLM is something different. PLM systems indeed need to provide an IT backbone to assure data collaboration and replication globally. However PLM is probably more focused on business process changes and NOT on IT.
PLM requires people with business skills and not software developers
From my experience, PLM projects fail in case there are no business knowledgeable people available. It did not only happen with free PLM software or open source software. Some years ago, ERP vendors started to provide free PLM software to their customers to keep PLM companies on a distance. Like free PLM software it looked nice business wise, the software is free when you buy their ERP system. But who is going to implement it ?
This free PLM software availability has changed in the past years for ERP vendors. Also ERP vendors see PLM as a growth market for their business, so they started also to invest in PLM, providing PLM consultancy and no longer for free PLM functionality. However in one of the projects I was involved, it is clear that PLM and ERP are complementary approaches. Interesting is that none of the PLM vendors focus on ERP, apparently ERP vendors believe they can master PLM. I won’t say it is impossible however I believe if there is no real PLM vision on the top level of an ERP company, you cannot expect the competitive focus to exist.
Are CAD vendors providing PLM ?
Some CAD vendors have an embedded data management solution to manage their own data. This is usually more a PDM system and often the word PDM (Product Data Management) is too much for that. These systems manage their own CAD data but have no foundation for a multi-discipline Engineering BOM. For me, this is the base for PDM, as most companies have several disciplines working with different tools all around the same product. So CAD data management for me is not a the base for PDM, so for sure not for PLM.
PLM vendors bring real PLM value !
For me it is clear having worked with different vendors in the past: an ERP vendor, several PDM and PLM vendors, it is clear for me in order to bring committed value to a customer, you need first of all people with PLM skills – the ones that can differentiate between business process adaptation and software development. In order to implement PLM successful companies need to change the way they were working (read many of my previous posts about this – in particular this one). Software developers tend not to take this approach, but they adapt or extend the software to support the old way of working.
Finally paying for PLM software guarantees that the development of this software has a continuation based on business drivers and best practices. A PLM software vendor has the drive to improve to stay in business, both by software capabilities but even more by providing industry best practices.
Therefor my conclusion is that free PLM software does not help mid-market companies.
Feel free to react as I believe it is an important topic in this market.
In the past year I shared with you my thoughts around PLM. Most of the post were based on discussions with customers, implementers, resellers and peers around the world. I learned a lot and will keep on learning I assume, as PLM has many aspects:
– the products, there are many products with the label PLM
– the concept, how do we interpret PLM per industry
– the customers, what do they want to achieve, without buzz-word
– the world, people and economic trends drive us sometime to irrational decisions
In this post I will give an overview from the 2008 posts, categorized by topic. I am looking forward to further suggestions in the comments if you are interested in more depth in certain areas. In parallel I will continue to share my experiences and provide an overview of best-practices and terminology experienced in the PLM space.
PLM concepts
Managing the MBOM is crucial for PLM
Is there a need for classification – and how should it be done ?
Is the PLM concept applicable for mid-market companies too ?
What will happen with PLM – looking towards 2050
PLM and ERP
PLM and ERP – the culture change, continued
Connecting PLM and ERP – part 1, part 2, part 3
PLM and ROI
Implementing PLM is too costly ?
Implementing PLM takes too long ?
Why implement PLM next to an ERP system ?
How is PLM different from CAD data management ?
Economical crisis creates the opportunity for change
Business Process Change
PLM in SMB requires a change in thinking
The management is responsible to initiate a change towards PLM
The change in automotive/aero supply chains to more advanced partners
How will mid-market companies pick-up the benefits from implementing PLM ?
Experiences
European Enovia Customer Conference (ECC)
PLM in Greece – does it exist ?
Is the concept for PLM mature enough ?
Don’t expect a bottom up PLM implementation to become successful
Conclusion
I would like to conclude with a quote from my favorite scientist, who taught us everything is relative, however:
“We can’t solve problems by using the same kind of thinking we used when we created them.”
Looking forward to your feedback, wishes in 2009 !
Jos Voskuil
As the year ends, I decided to take my crystal ball to see what would happen with PLM in the future. It felt like a virtual experience and this is what I saw:
- Data is not replicated any more – every piece of information that exists will have a Universal Unique ID, some people might call it the UUID. In 2020 this initiative became mature, thanks to the merger of some big PLM and ERP vendors, who brought this initiative to reality. This initiative reduced the exchange costs in supply chains dramatically and lead to bankcrupcy for many companies providing translators and exchange software.
- Companies store their data in ‘the cloud’ based on the previous concept. Only some old-fashioned companies still have their own data storage and exchange issues, as they are afraid someone will touch their data. Analysts compare this behavior with the situation in the year 1950, when people kept their money under a mattress, not trusting banks (and they were not always wrong)
- After 3D, a complete virtual world, based on holography, became the next step for product development and understanding of products. Thanks to the revolutionary quantum-3D technology, this concept could be even applied to life sciences. Before ordering a product, customers could first experience and describe their needs in a virtual environment
- Finally the cumbersome keyboard and mouse were replaced by voice and eye-recognition. Initially voice recognition and eye tracking were cumbersome. Information was captured by talking to the system and capturing eye-movement when analyzing holograms. This made the life of engineers so much easier, as while researching and talking, their knowledge was stored and tagged for reuse. No need for designers to send old-fashioned emails or type their design decisions for future reuse
- Due to the hologram technology the world became greener. People did not need to travel around the world and the standard became virtual meetings with global teams(airlines discontinued business class). Even holidays could be experienced in the virtual world thanks to a Dutch initiative based on the experience with coffee. The whole IT infrastructure was powered by efficient solar energy, reducing the amount of carbon dioxide drastically
- Then with a shock, I noticed PLM did not longer exist. Companies were focusing on their core business processes. Systems/terms like PLM, ERP and CRM did not longer exist. Some older people still remembered the battle between those systems to own the data and the political discomfort this gave inside companies
- As people were working so efficient, there was no need to work all week. There were community time slots, when everyone was active, but 50 per cent of the time, people had the time to recreate (to re-create or recreate was the question). Some older French and German designers remembered the days when they had only 10 weeks holiday per year, unimaginable nowadays.
As we still have more than 40 years to reach this future, I wish you all a successful and excellent 2009.
I am looking forward to be part of the green future next year.
The past few weeks a had various moments to interrogate myself about the values for PLM and what would be the best way to address PLM for a mid-market company.
First I was in Copenhagen, attending the Microsoft Convergence event. A meeting where Dynamic customers, resellers and partners from all around Europe came together to learn the latest from Microsoft, to network with other partners and discuss their business processes.
Of course the focus from all of the 4000 attendees was around logistical processes, I was very curious to learn how manufacturing companies would describe their needs and where they feel the missing link – PLM.
But they did not feel it ……….
I believe this is one of the most challenging issues for mid-market companies. They have been investing in their ERP system and consider this as the company’s backbone. Their production and finance is dependent on it. Other departments, like sales and engineering provide somehow their inputs to the system, often Excel is here the information carrier. No PLM vision exist – or in case it exists – it is perfectly hidden.
I touched this topic in one of my previous post, called: “We do not need PLM, we already have ERP”
So why is PLM not yet adopted by mid-market companies and I raise this question mainly for those companies that obvious would benefit from PLM ?
I believe the major reason is the fact that often in mid-market companies there is no high-level strategy available analyzing where the company should be in 5 years from now and what are the challenges to overcome. Most of the companies I am currently working with want to implement something they call PLM, but often it is just PDM.
The big difference between PLM and PDM is that PLM requires the company to work different across departments, where PDM is considered more as an automated way to centralize product data, without changing the department responsibilities.
And now some generalizations
In addition mid-market CAD resellers try to explain their customers that PLM is only for big enterprises and that they just need PDM. This of course makes their sales beyond CAD easier, as touching cross-departmental processes requires different knowledge (which their resellers do not have), a different product (which they do not sell) and of course a longer sales cycle.
The same happens from the ERP side. ERP resellers consider what happens in the engineering department as a black box, where product data is generated and at the end a (configurable) Bill Of Materials. ERP vendors do not jump on PLM as extending the process to engineering requires different knowledge (which is not their domain) , a more extended product (which they do not have (yet))
Mid-market companies are of course influenced by these resellers of their core components and as mentioned before do not have the time and budget to take a strategic, holistic view where the company should be in 5 years. Usually their focus is on solving the pains they experience in their organization. For example we have too many databases and spreadsheets per department, let’s put them all in one central place – more an IT focus then a business focus.
So how to get the vision ?
Companies should ask themselves the following questions:
- what is the success of my company ?
- will I still be successful in 5 years from now if I keep on doing the same ?
- how does globalization affect me ? Risks but also challenges.
- how do I capture the knowledge of my (experienced) workforce before they retire ?
To answer these questions (and the above ones are only the most probing) it requires time and understanding to build a vision. Perhaps the economical downturn creates the opportunity or need to prepare for the future (survival).
And if you are working in a mid-market manufacturing company, chances are big that implementing PLM is a way to guarantee the company’s future and success. This has been proven in big enterprises and mid-market companies are not so different at the end.
Adapting business processes and connecting the whole product lifecycle are key activities. Beyond PDM and ERP it brings portfolio management (which product bring the real revenue) and innovation (New Product Introduction – how do we make sure we introduce a good product in the market).
Conclusion
PLM requires a company vision and strategy. Building the vision is something that PLM vendors, business consultants and others can assist you with. Each group has its own pro’s and con’s but at the end it is the vision that is needed before making the change – it requires first of all an investment in brain power – not in products
Interesting to read:
Stay with the business processes or change them ?
This time a more theoretical post about classification in PLM. A topic that always has been around for more than a decade. Recently classification also came up in some discussions both with customers and on discussion groups on the Internet. So what I will try to do in this post, is to explain the goals of classification, the ways classification is implemented and finally how I see classification will evolve. As always feel free to comment or extend my post.
The goals
Classification is a generic understanding, so to start I want to narrow classification to item classification. Companies might use classification in various ways, for products, for knowledge, for supported functions and more. The most discussed topic in the context of PLM however is item classification. The idea of item classification is twofold: understand what you already have (designed) and promote reuse. Historically the item definition has been stored in the ERP system and reuse was mainly based on recognizing parts of the description. Sometimes the ERP system also supported a kind of classification id to group certain parts – like fasteners, frames, base materials etc.
With the introduction of electronic parts this rough classification as defined in ERP became insufficient as already the description and classification id were not enough to really understand if an item could be reused. During that same period of time more and more companies where merging or acquiring other companies and they want to understand and benefit from items already used in one of the companies.
So this brings back the challenge for the two goals mentioned:
- How can I make sure my engineering reuse existing items in future products ?
- How can i consolidate and understand items i have used in my company ?
Item reuse
In order to promote item reuse companies have used various classification systems in engineering to promote reuse and standardization within the company. Design catalogs with standard purchase parts, extended with company standard parts were implemented to limit the variety of choices for a designer. Companies & Products like Trace Parts, SolidWorks Toolbox, Inventor Content Center address this need.
Additional mostly in the German speaking countries a classification standard exists, called sachmerkmahl leiste (sorry only in German) or often referred to in the context of the DIN 4000 standard. This is also a standard classification standard, less CAD design centric. Interesting to analyze why this standard does not exist in other countries.
One of the reasons might be that classifying all your engineering data takes a lot of time – specially when you haven’t done it from the start. I worked with some companies where more than a man-year was spent on classifying information. This work had to be done by someone with engineering knowledge, so you can imagine the investment for classification, beside the software was huge. Main question is, what will be the (expected) Return On Investment ?
In this area I think that a cultural difference plays a role here. Some countries invest more in their working methodology and processes than others where the focus might be only on the single result. From my global experience to be fair, i have not seen and heard the real benefits of this type of classification for reuse. I am looking forward for statements from companies that have measurable result here. Like many IT projects we have the emotional feeling that this approach should bring benefits
Item Consolidation
In the mid nineties when companies started to merge, PDM became PLM, CRM became important, also another trend became visible. The need for item classification systems, more on the inventory side, for companies to understand which items they were using around their (merged) enterprises. One of the first companies that time was Aspect Development Inc, later in 2000 merged with I2. Customer case studies learned us that in some of these enterprises a single item could exist with 100 different ID’s, all described or classified in various departments a little different, so hard to reuse. Only by classifying items within an enterprise based on their specific characteristics, people start to recognize identical items. Also in smaller mid-market companies I have seen situations where items have been named or identified just a little bit different, although they were the same.
Here benefits of item consolidation can be easier justified. I assume most companies can estimate what is the total cost of handling an item through its lifecycle and what are the purchase benefits by consolidating for example 10 different named into a single item to be purchased in a much bigger quota.
The benefits really come when you control your inventory and from this base feed the engineering department with an optimized selection of validated items for reuse. And this is to my opinion the most important goal of classification
How to implement classification ?
As described above classification is needed to promote reuse of engineering knowledge and to standardize on inventory (purchased items).
To address the first need I believe PLM offers various ways to support a classification. Some might believe DIN 4000 is a useful standard. From my experiences with companies it appears that it is important to bring rational to what you classify. Where is the ROI. Classification brings a lot of constraints and overhead to the engineering department – all parameters needs to be mandatory managed for each part, otherwise your classification looses its value. Probably you will realize that classifying metal strips does not bring the reuse value as the overhead for maintaining the classification is higher then the cost of producing a new strip. So I am not so convinced about classification for this need.
For the second need – inventory optimization – here i believe the classification brings a measurable ROI, specially when the company uses a New Item Approval process or Standardization Process, where every new item will be reviewed (and classified) to guarantee its unique need. Of course it depends very much on the type of industry and main business process if this approach brings value. Listed in a more relevance order: Engineering To Order / Configure To Order / Design For Manufacturing
Folksonomy versus Taxsonomy
A new trend for classification is the way search engines work on massive unstructured data. No one tries to classify all the web pages that exist (although there might be a standard for that). It is easier to perform a context search and specially with new web development you see that tagging information becomes more and more important for retrieval. For example I tagged this article with PLM, ERP, Classification, Item Reuse and Item Consolidation. These tags will be used by search engines and I do not have to worry on which level and where Item Reuse is stored. As a creator of this text part I tag my information for reuse.
This is called Folksonomy, this in contrary to Taxsonomy, the classical method for ordering information. See for more background the related wiki hyperlinks.
Conclusion
Implementing Folksonomy in a PLM environment depends on the type of PLM system you are using (in case you use a PLM system). It requires a way to tag information in an user-friendly way and to retrieve information by tags in an easy way – the ease of use of a search engine. In case it is too futuristic this approach, evaluate your engineering classification needs based on your expected ROI and goals, keeping in mind in the classical way of classification will evolve.
Do you have examples of classification with a proven ROI for engineering, let me know
This time a short post. When I committed myself to write posts about connecting PLM and ERP, I already touched several times the PLM and ERP vision (from the point of view of a PLM missioner of course)
Just as a reminder the 5 most objections I heard the most from companies when discussing a PLM implementation. You also will find references to the first two objections I already discussed.
The 5 reasons not to implement PLM I heard the most were:
- The costs for a PLM implementation are too high
- A PLM implementation takes too long
- We already have an ERP system
- Isn’t PLM the same as managing CAD files ?
- We are so busy, there is no time to have a PLM implementation in our company
3. We already have an ERP system.
From the analyst point of view, PLM has established itself as a discipline beside ERP and CRM. Which discipline requires the major focus in a company depends on the major business process of the company. It is clear PLM brings it benefits for manufacturing companies, where innovation and managing their product IP are major reasons for success.
Various publications on this topic (in order of relevance):
- Collaborative Visions.com- PLM action
Perfectly explaining where PLM brings value and where it is different from ERP - Aberdeen Group – The Best Kept Secret of Top SMB Product Developers. Finding the Shortest Path to PLM Value
Showing the difference in perception and real attention needed when implementing PLM and where the benefits are for SMB companies - AMR research- PLM Report
Showing the PLM market is growing steady, which means for companies that PLM vendors will invest in a more and more mature product based on common principles - TechClarity – Complementary Roles of ERP and PLM
Explaining the differences between ERP and PLM and why you need them together - Aberdeen Group – Integrating the PLM Ecosystem
Explaining integration of your PLM system will bring competitive advantages - CIMdata – SAP PLM roadmap
Showing that even SAP recognizes PLM exists
So by studying all the links in this post, you might come to the conclusion below:
Conclusion
All my previous posts and the above publications (and much more) explain that if a company is interested in managing their Intellectual Property (IP) – the reason why they really differentiate , plus if they want to remain in business by being innovative,PLM is the proven approach for this type op companies.
And tired of innovation, watch this:
In the previous post, I described that the item is the primary entity used in the connection between a PLM system and an ERP system. The initial definition comes from the engineering department, defining the main characteristics of the item, like ID (part number), Description and Classification Data for engineering usage.
Next when the item reaches a certain maturity stage, that it will be purchased or produced, the initial definition needs to be transferred to the ERP system and to be completed in ERP with logistical data. Often as part of the classification data, the engineer has already defined what type of item it will be. This information can be used in ERP to apply default data based on a certain template item or derived-from item.
Item identification / Part Number
Most of the manufacturing companies are using so called ‘intelligent’ part numbers to identify their items. This was done for historical reasons. As there was no IT system in the company, the part number contained logic and information in order to ‘immediately’ understand its usage.
For example M210-23-4-00-A3.C tells me immediately it is a manufactured part, first time used in the milling product line (210) and it is used for hydraulic (23), not in stock (4), a preferred item for engineering (00) and its definition can be found on the drawing with the same name, size A3 revision C.
If you did not understand this directly from the number, it does not mean you are not intelligent, although it is an intelligent part number. This shows that intelligent numbers are useful when people are trained and have a good memory. For everyone else in the company (and joining the company later) the number is initially the same as a meaningless number.
For that reason is is recommended to use ‘non-intelligent’ numbers to identify parts. This creates no overhead for people to learn all kind of intelligent numbering mechanisms and it pushes everyone to look to additional information which can be understood immediately, like the description or classification data. We have now IT systems like a PLM or ERP system that allows us to display more than a number.
For backwards tractability of course beside the new meaningless part number, there can be also a place holder in the IT system to define what the origin of the part was (with the intelligent part number). Specially when companies merge this will happen. The same part exists in different numbering schemes in each company. The only way to solve this is to add a new identifier, preferred to be the ‘non-intelligent’ number.
Conclusion: For part numbers it is recommended to use non-intelligent numbers based on a sequence, avoiding the creation of legacy information (merge) or training to understand the items by number.
Now the new created part has a meaningless identifier, we have achieved two things:
- The PLM and ERP system have unique key to share. Identifying this number with its revision (if relevant) immediately makes it clear for both the PLM and ERP system which part is meant.
- To understand what the item really does, we need to understand additional information like its description
Note
: Not all ERP systems support revisions of items. Some work always with the actual version of the item. Where PLM systems trace and keep the exact definition of an item, often ERP systems trace the item by effectivity. You need to know what was the engineering definition, when the item was manufactured.
Description / Classification
Initially when an item is defined the engineer might create a description, like HYDRAULIC CLAMP without any further details. Some years later there might be 10 or more hydraulic clamps in the system, where some of them might be identical and others differ. However the description HYDRAULIC CLAMP might be sufficient for a part list to be shipped to a customer (we do not want the customer to know the exact item characteristics in order to have him order the spare parts through us).
Often on the engineering side an additional description field is added, which is a detailed description. This description is used internally and should be standardized in order to support the engineer to select the right item.
So HYDRAULIC CLAMP could have an internal definition HYDRAULIC CLAMP 400-600 describing its usage. This detailed description should be either enforced and generated by the PLM or should be handled through a librarian or standardization role in engineering. This should be combined with a classification of the new item. The advantage of a detailed description and classification is two-fold:
- It supports engineers to search for existing items – so reuse is more likely. Often the description in the ERP system was not built in this way and for that reason engineers re-invent items while they might exist.
- The classification will alert the engineer or librarian that an item with the same classification characteristics already exists. This means it might be identical or an additional classification characteristic is needed to differentiate the two items.
The definition of a new item would go through the following steps:
- The engineer defines the description and can work with the item in a temporary mode as he is not sure of using the new item in this way
- The item becomes mature and he needs to generate the detailed description.
- At this stage the librarian or a standardization committee might come in, to analyze the need for the new item. And if so to define all its classification data, knowing it is a new and unique item needed.
- Once the engineering definition is completed, the item definition can be send to the ERP system in order to complete it with logistical data – who can manufacture it and tens of attributes more. The item still is not released
- A hand-shake from the ERP system will confirm that the item definition is completed and as part of the release process the item can be approved for manufacturing. In case no pre-production stage exists it might be released even.
Conclusion: Standard Description, Detailed Description and Classification information is done on the PLM side to support reuse of items and to avoid creation of similar items with a different part number. The ERP systems uses the description definition and completes the definition with ERP required information. Data relevant for the engineering is synchronized back once the full definition is available.
The next post in this sequence will be discussing the BOM transfer to ERP
This week I was in South-Africa working with Aerosud, one of the prominent companies in the Aerospace industry in South Africa, working with the major OEM’s One of the topics discussed in the workshop with Aerosud was the connection between PLM and ERP. As this is a question that occurs so often, see also previous posts, I will address in this post and the upcoming posts the logical steps for an PLM – ERP integration and issues a company might face.
For some people I guess the big surprise will be that most of the difficulties and discussions are not on the technical level, but on how a company has organized their data and organizes their data in the future.
The first rule for implementation is:
The PLM system manages all product related IP (Intellectual Property) and the ERP system manages the executing in the most effective way, taking into account resources, time, material scrap etc often linked with financial transactions
Although some ERP vendors might want you to believe they offer also PLM functionality in their system, it is always a small subset of the total PLM capabilities. Linking manufacturing documents to an item is not PLM. PLM is managing all product related IP and this requires connections to all information sources during the whole product lifecycle, not only during manufacturing.
So if we agree on the above, we understand there is a need to connect PLM and ERP, as both systems have a vital task in a manufacturing company and both work around common information, the product, composed of all its physical items.
The Item
The physical item, is the shared and understandable entity understood through the whole company. Some companies call their items parts. In order not to confuse between an item and a part designed in the CAD system, i will talk about items, when I mean the physical representation.
Items can be a single item, a rivet, a specific metal plate or it can be a complete product or smaller component of a complete product. They have one thing in common, we all identify them with a unique number the item number.
In engineering oriented companies you might hear designers say, the item number is equal to the part number of the part or product they are designing, as often in their case what they design on the lowest level of the assemblies, becomes an item.
In general you can subdivide the items in two major groups:
- standard purchase items
- company or project specific items.
Standard purchase items
The characteristic of a standard purchase item is that it has been designed and developed by external companies and that these items can be found in catalogs produced my one or more manufacturers around the world, based on defined standard. For example a M12 Nut, a bearing with specific diameter and performance characteristics. The company that uses these standard parts creates an own definition of the part and makes references to manufacturers who provide these parts in the right quality and standard. These manufacturers appear on the Approved Manufacturer List (AML), which is an engineering task inside PLM to define this list.
In addition, based on this approved manufacturer list, the purchasing department will allocate vendors for these parts and based on vendor performance and reliability, they create a List of Approved Vendors (AVL)for these parts. This is a execution task to be defined in the ERP system.
So in day to day operation, engineering will define new standard purchase items if not available and this request will lead into an AML and then in ERP towards a AVL of the standard item. It is a combined activity where each of the disciplines has participate. For existing standard items, there is also a process triggered from ERP that influences their usage. For example a certain manufacturer might stop producing a certain item and this affects the AVL – purchasing raises a flag that the item becomes hard to acquire or even unavailable, which leads to engineering to define a new AML, which might end up in an engineering change as by changing some of the product functionality other standard items can be used to replaced the original defined item.
So for standard purchase items we see:
- new standard items are introduced through PLM – starting from AML into ERP with the AVL.
Both system add information to the item information - exiting standard item can become obsolete through PLM – as the company decides not to use them (anymore) or become phase out or obsolete based on a trigger coming from the ERP side, as the AVL has changed.
- Standard purchase items do not have revisions
Items
With items here we mean the non-standard purchase items, which can be divided again in two major groups:
- company standard items
- project specific items
Project specific items are items defined by engineering during the definition of a product. These items need to be manufactured specifically for this product based on the specification provided by engineering. Outside the project these items are not used again anymore as they are too specific.
However companies try to standardize even their project specific items, in order to share and reuse them in other products. At this stage, the project specific item becomes a company standard item and is managed to be reused.
Both company and project specific items can have revisions as their maturity may grow. As long as the new definition complies to the Form-Fit-Function rules, the new revision of the defined item can replace previous revisions, meanwhile better support future usage.
So for items we see:
- project specific items are introduced through PLM and on the moment of production pushed to ERP to be manufactured according the design specification with the right revision
- company standard items are introduced through PLM and can be produced on stock (if there is a wide usage through various products) or pushed to ERP when needed to be manufactured according the design specification with the right revision
- Items are revision managed and follow the Form-Fit-Function rules
The conclusion of the above for this post is:
- Items have a common usage in both PLM and ERP
- Items are initially created in PLM and at a certain time transferred to ERP to be completed with logistical information
- Item usage can change based on availability triggers from ERP or use cases in PLM
- an item is a hybrid entity – with a common shared identification, PLM relevant data and ERP relevant data
- Some of the ERP data might be relevant for information to be viewed the engineer and the other way around
Once agreed on the above concept, we have the guidelines how to connect items between an PLM system and an ERP system. In my next post I will talk more about that, also about how to connect BOMs between PLM and ERP.
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This week was again a week with several customer visits and discussions around PLM implementations. As analysts like CIMdata, AMR Research, the Aberdeen group are all claiming that PLM will be the next thing for small and medium manufacturing companies, the discussion around PLM is ongoing. Of course, PLM vendors are adapting their messaging and sometimes their products towards the SMB.
Some vendors like PTC and UGS try to downscale their existing products mainly by changing the packaging of the product (but it remains a PLM system originally designed for enterprises) others like Dassault Systemes have a special SMB offering with full PLM capabilities, ENOVIA SmarTeam.
But let’s assume we have the ideal PLM solution for an SMB company. This was the start point, I had during my meetings this week. How would you motivate a company to implement PLM, knowing all the constraints of SMB companies? Miki Lumnitz wrote about it in his blog –PLM for SMB who are those companies?
I noticed one of the main issues for discussion is the handling of the MBOM (Manufacturing BOM). So let’s look at the different viewpoints in a company.
EBOM (Engineering Bill Of Materials)
“The EBOM reflects the way a product was functionally designed”
When engineers define a product, they design (or reuse) assemblies (modules) and add new parts and assemblies to the design. When working with a 3D CAD system, saving the product results in a document structure that resembles a lot the engineering BOM. Traditionally companies got the impression that by changing this EBOM structure a little, they would have a structure ready for manufacturing, called the MBOM.
MBOM (Manufacturing Bill of Materials)
“The MBOM reflects the way a product will be manufactured”
The MBOM is a structure derived from the EBOM. The main changes from EBOM to MBOM are:
- removal of subassemblies that do not exist in the physical world. For example a grouping of two parts that are logically grouped by the designer, but as a group does not make sense for manufacturing (Assembly B).
- And in addition to non-design items which are needed for manufacturing the product. For example paint or grease. (Item F)
Traditionally – and also in the companies I was visiting – the EBOM is the domain for the engineering department and with additional modifications, they provide a BOM (is it EBOM or MBOM ?) to the ERP system. Some companies add non-engineering items to their design – they draw a can of paint in their design to make sure the paint is part of the BOM. Some work with phantom production order to address the usage of subassemblies by engineering.
Both EBOM and MBOM definitions are preparations before production can start. The EBOM and MBOM contain the product knowledge, how to build and how to manufacture a product. For that reason, they should be handled in the PLM system. The main reasons for that are:
- during process engineering, there is a need to use, analyze and sometimes adapt engineering data. This can be done in the most efficient way within one system where all product data is available
- PLM systems, like ENOVIA SmarTeam, contain tools to create quickly based on certain rules an MBOM derived from the EBOM and when changes occur even compare both structures again, to adapt to these changes
- Having a single environment for product definition and manufacturing improves the total product understanding
So where is the MBOM?
Ask yourself as a company ” where do I handle the MBOM ?” Some of you might say, we do not have an MBOM as our EBOM with some modifications is already good enough for manufacturing. Many companies might say, we manage the MBOM in the ERP system as this is (was) the only system we had where we could define such structures. These companies are candidates for improving their Concept to Manufacturing process, as for sure either users or working methods are compromised to work with the MBOM in the ERP system.
Some might says: Do we still need ERP systems?
Yes, as ERP systems are built to schedule and execute the production of well-defined products in the most efficient way. ERP systems are needed for the execution, often the core activity for manufacturing systems.
PLM systems are the reason that ERP systems can execute, they bring the product definition and information to produce a product. And in case the company designs and manufactures excellent and innovative products the future is bright.
But we should not consider engineering activities in the same way as production activities.
Einstein once said (and he is not an expert anyway):
Innovation is not the product of logical thought, even though the final product is tied to a logical structure
I am curious to learn where you manage your MBOM
This week I visited a company, which was very successful in what they were doing with their products – actually everyone is running to keep up the demand from their customers. I have seen this typical situation all around the world. People are too busy to implement new and more efficient ways of working (introducing PLM in the cases where I am involved) and hanging to their old ways of working. Companies went through their first (and second) ERP implementation and this became the dominant system where everyone has to connect to, trying to avoid another maybe painful implementation.
Implementing PLM requires a different vision; it is not just connecting the CAD documents through a PDM system with ERP. It means that you need to start to think about company-wide processes, not optimization of a department. The biggest discussion often is around who owns the creation of an item number and its status. Companies have invested in the past in all kind of complex numbering systems to identify items by its number (as there was no IT system to support that). Then the ERP system became the source for item definition although the initial creation was done by engineers.
It is clear there is a change needed in the way companies connect their engineering environment with their production environment. Doing it the old way still requires many flExcels (as Excel is the most flexible tool to pass information) and people chasing, modifying and checking Excels before entering them in the ERP system.
ERP vendors tried to avoid this change by extending their systems with PLM functionality. As PLM and ERP are two complete different disciplines, would you go to a construction company to have your new house designed or would you hire an architect first.
Of course, ERP systems can become familiar with PLM, but if it is not your key activity, you will never get the 100 % feeling for it. For example, the company I visited tried to implement BlueStar, as this was a direct linked PLM system on top of Axapta. The reason the implementation failed was not a technical issue although there were some performance issues. Nevertheless, it is not hard to write the data in the right table even with some delay, but aligning the world of PLM and ERP together was the problem. Engineering works with revisions (major / minor) they work with statuses, which are not known in the ERP world.
Conclusion:
Let PLM systems do what they are design for and implement them through PLM specialists. Next, connect the PLM and ERP system for a streamlined company wide process. Look for the basics at the ENIAC SmarTeam Engineering Express.
In one of my next posts, I will address PLM-ERP integration best practices, but now I am going to pack my suitcase in order to be in Munich for an exciting ENOVIA Customer Conference
Jos Voskuil's Weblog 
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