In the manufacturing world, the Bill of Material (BOM) is the genetic code that determines the physical manifestation of newly conceived and revised product concepts.  It is the blueprint by which succeeding steps know how to take a design and build a Bill of Manufacturing or Production BOM (pBOM).  Typically, a pBOM is created in an Enterprise Resource Panning (ERP) system, although how the pBOM is created from the engineering design is sometimes difficult to describe or more often than not a process fraught with confusion and missteps.

To add to the problem, it is usually a manual process where someone needs to key into the ERP system the data used to create the product – time consuming and riddled with errors.  If ERP is the only tool available, then the path is clear – stay the course and hope for the best.

But wait, there is another option! If a PLM solution is adopted and used correctly, the design portion becomes less painful. BOMs are now created in the PLM system assisting in the overall process.  But is that correct?   Should PLM win out over ERP in this scenario?  Considering ERP is the ultimate destination for BOMs, it can be deduced that it should also be the owner of all BOMs.

Well, not really.  The key is what interface exists and how the company deals with data.  Once business understands what the role of PLM is in the overall company strategy, it becomes somewhat clearer to determine the data flow and where the BOM begins and who wins.

To illustrate, we can use a hypothetical example to explain:

Let us assume our company has identified what we think is the best mousetrap.  After all the congratulations and backslaps of management are over, we begin Mousetrap 1.0 design.  Since engineering is the first step in creating Mousetrap 1.0, some model is generated initially to see if the design is even technically feasible.  Engineers crunch numbers, shift parameters, tweak measurements and finally announce that they have successfully completed the design on Mousetrap 1.0.  What then?   Management can’t wait to get their hands on the new design and begin production.  If we choose the shortest path, we simply give the design drawings and BOM to production and tell them to start work ASAP!  Assuming no PLM or ERP systems are being used at all, Production will go off and scratch their heads for a while trying to understand what the engineers wrote. From a simple viewpoint and a perfect world, this would work, but we know that things never work out as planned.

So enters ERP.  Production receives the plan for Mousetrap 1.0 and enters it in the ERP system by means of the production Bill of Material, or pBOM.  This is now what Production will use as the basis for making Mousetrap 1.0.  Financial numbers are calculated, parts are procured and fabricated, and the production design is finalized. We have refined the process, scaled up production, and we are on our way to our first million.  More toasts and backslaps are in order.

Now let’s assume some bright engineer realizes there is a problem – a fatal design error that instead of the mousetrap catching mice will catch cats.  She immediately notifies her manager of the error and an investigation is made.  After some review, it is concluded that she is right and the cat population will suffer heavy losses if the production and sale of Mousetrap 1.0 is continued.  Work begins immediately to correct the error, however several complications in the design slow Engineering in Mousetrap 2.0 design.  It is found that the widget was not specced correctly and needs to be changed out for a new one.  Furthermore, the seat that houses the widget also needs to be redesigned.  Meanwhile, Production is blissfully unaware of the change Engineering has on their plate and Planning has just recently made a purchase of 500,000 widgets at $2 each and purchased a humongous roll of expensive titanium wire to reduce the Mousetrap’s weight according to engineered specs.  Equally, at a production rate of 3,000 Mousetraps a day, which management required from Production, 100,000 faulty Mousetraps have now been manufactured, retailing at $10 each.

Engineering finally completes design on Mousetrap 2.0 and hands it off to Production.  Production now realizes that the new design has rendered the widgets that were purchased useless, all manufactured and completed Mousetrap 1.0’s scrap and the humongous roll of titanium wire has been replaced with aluminum.  As Production reviews the Mousetrap 2.0 BOM, they also realize they miskeyed the thingamajig part number and quantity and had purchased the wrong part – similar but different as well as adding double the required amount.  Management realizes that of the 100,000 units manufactured, 50% have been sold and will require a massive product recall to avoid the cat hazard.  The company’s name has been tarnished and the government is breathing down the CEO’s neck for not having a Quality Management System (QMS) in place.

The above example, although somewhat humorous does shed a little light in how lack of communication and departmental silos can cause severe if not devastating consequences.

Now let’s bring PLM into the picture.  To truly demonstrate the power of PLM, we will assume that PLM is fully integrated into ERP, can input the BOM that Engineering creates and maintains a two-way communication between PLM and ERP.  Listed are the different aspects and results of a PLM solution being implemented and in control of the BOM:

1. If Engineering had control over the BOM, no typographical errors would have caused Production to purchase the incorrect thingamajig. Since the thingamajig was hardware included in the kit, they were adding twice what was required, thereby exacerbating the problem.
2. PLM can notify Production that engineering changes are being made.  Had Production received notification Engineering was working on Mousetrap 2.0, they may have checked with them prior to making the widget purchase, potentially saving the company $1MM.
3. Had Engineering controlled the BOM through PLM and created an approval process to allow Financial to review the design prior to release, they could have reviewed the Mousetrap 1.0 design and questioned Engineering about the use of titanium, saving the $2.5MM spent on the humongous roll of titanium and opted for the less expensive $250K aluminum roll.
4. PLM improves compliance with certain regulatory guidelines and standards, which would help stave off the government and let the CEO sleep better at night, not to mention the improved quality of the product through an established QMS plan.

With so many things that can go wrong in a production facility, the more control you have over the unknown is a wise strategy to ensure smooth, better performing operations and throughput.  All of this increases the bottom line, but does come at a cost.  Let Rockwell Consults review your operation and determine where improvements can be made.