"PLM should take over ownership of the manufacturing BOM too", says Siemens PLM’s CEO, Chuck Grindstaff
Verdi Ogewell posted on November 10, 2014 | 26106 views

"So, how is the Industry 4.0 vision coming?", I asked Siemens PLM Software CEO, Chuck Grindstaff, during the recent PLM Europe event in Berlin. "Fine”, he joked, "we're at 3.8".

There is a lot of truth in his riposte. Every detail isn't in place, but they are close to closing the loop between top and shop floor IT, which is a big part of the Industry 4.0 vision.


The PLM system should own the manufacturing BOM,
not as it often is now the ERP system. ”The idea of
coming in at the end of the process to say, ’I want to
own that final answer’, is not enough”,
Siemens CEO, Chuck Grindstaff asserts.

”What we mean by Industry 4.0 is distributing decisions down to more intelligent devices that interconnect those distributed devices into a coherent whole. Many factories have some manufacturing devices that interoperate with varying levels of orchestration.

As to whether Industry 4.0 has reached, 3.7, 3.8 or ”3.x” depends on what kinds of descisions are being made by those devices.”

In his keynote in Berlin, Grindstaff made an analogy between Google's autonomous driving vehicle and an intelligent autonomous robot making decisions in a workplace.

”These are the kinds of analogies that really help people to understand what Industry 4.0 is all about; moving decisions down so you don't have to say HOW something will work in a precise detailed fashion, but instead WHAT to do; like 'pick up things that look like this and connect these parts when they're in this configuration'. A lot of work has to go into creating the instructions to those more sophisticated devices.”

To work smoothly, the intelligence has to be below the surface - systems must be easy to operate and attuned to nuanced semantics. ”Yes, we're doing a lot of work on the semantics,” he said, adding ”the language of definition, and the simulation so that we can actually ask, 'Well, what's the cycle time of this movement?' We don't know exactly how each thing is moving but we know what is to be accomplished.”

Siemens has produced sophisticated integrated vision control systems that create a coherent environment that allows intelligent devices to work side by side with less intelligent devices.

The Smart Innovation Platform

Siemens also demonstrated their new Smart Innovation Platform in Berlin . That platform contains the PLM suite Teamcenter, NX CAx, and the digital manufacturing solution Tecnomatix. None of these software components are new. The difference in this platform is that everything is connected and designed to work seamlessly as a whole.


Siemens’ Digital Manufacturing solution Tecnomatix is one of the components on the Smart Innovation Platform. Here used at Volvo Cars.

”The idea is that we can start to develop an innovation early on in the conceptual phase and move the actual detailed artifacts – not just the files – but the objects that make that up throughout the entire life cycle without having to worry about re-entering, re-transmitting and syncronizing,” the Siemens PLM CEO says, adding that, ”We have a continous flow of refinement going from the the early ideas all the way to fine detailed things at the end. For me that kind of data reconciliation in a continuum is the core of Industry 4.0.”

Airbus and the risks of putting too many eggs in one basket

Both the vision and the platform sound great. However, this tightly integrated vision relies on a single PLM vendor, which is a dilemma raises questions for manufacturers. The PLM and ERP landscapes in industrial environments are more commonly diversified, including multiple solutions from multiple vendors.

A good example is aircraft manufacterer Airbus . Anders Romare is the executive responsible for PLM at this industry giant. He said that the company has a variety of CAx-, PLM and ERP solutions in place. Generally, they are attached to distinct product projects.


Airbus PLM top executive is sceptical to the
idea of having one big PLM system from one vendor.

The latest A350 project uses Dassault's Catia V5 / V4 for CAD, DS Enovia as CAD vault, Siemens LMS for systems engineering and related simulation, PTC's Windchill PDM for product configuration (eBOMen, engineering BOM) and SAP for the mBOM (manufacturing BOM). For manufacturing, Airbus uses several of Siemens hardware and software related shop floor solutions.

The Airbus PLM environment is highly diversified; Anders Romare is skeptical of a fully integrated vision, ”I don't believe that one system can handle all aspects of advanced product development for complex aircraft systems.” He also asserts that there's too much risk from an IP security standpoint to, ”put all the eggs in one basket”.

This raises the question of how Siemens PLM and Chuck Grindstaff's visions for Industry 4.0 can meet respond. The Airbus PLM / ERP environment is not uncommon among Europe's major manufacturing companies.

Chuck Grindstaff responded, ”I don't think that this is an either/or decision. At least not with our architecture. Our idea is that a customer who really would like to get everything from one vendor, could do so with us. But the real trick is that across a complex organization like Airbus it's not surprising that modularity is an important part of Anders Romare's strategy. I agree with that.” Chuck also pointed out that Siemens designed the architecture of their products to allow modules or elements to be integrated seamlessly with products from other vendors.

”Sometimes those vendors are partners, sometimes they are competitors. What we try to do is to have an open way of connecting those modules. This is really the same technique that we use internally to bind it all into our innovation platform. Those standard web services and service-oriented calls to capabilities are exposed to our partners and in many cases to other vendors so our customers can assemble a working environment from what they consider to be the best in breed,” said Grindstaff.

He continued, ”So, I don't disagree with Romare's approach. Some customer prefer a single stop shop while others prefer, and rightly so, a more heterogeneous environment. And I also agree with him on the risks of getting everything from one vendor. Even though Siemens has a very broad vision and certainly wants to deal with the entire technical thread of a product through production, Grindstaff asserts that their objective does not extend to ”everything around the digitilization of an enterprise ”. Sometimes, to maximize functionality a solution from another vendor can do the jobb better. In such a case Siemens does not hesitate to invest, implement, and use it. ”We have a portion of that in our own sights too”.


"The structure of the product communicated to manufacturing is a critical part."

The battle for dominance in the PLM arena

It appears to me that the dream of ”one system” is still the end goal for Siemens PLM and its CEO. Certain sub-systems are currently hotly contested and may be the proving ground for who will ultimately emerge dominant in the PLM arena. For example, the ownership over the various BOM's and the systems-driven product development toolkits that include systems engineering.

According to Gartner's analyst, Marc Halpern, ”this boils down to the question of who should own mBOM”. The concept of MDM, or Master Data Management is a related concept since it represents product data records regardless of in which system they are: PLM, MES or ERP.

Typically, the engineering BOM is created in traditional PLM systems, reflecting how a product is designed (the "as-designed" approach). The eBOM is in turn the basis for a manufacturing BOM (mBOM), which is usually issued by an ERP system and represents the "as-built".

Grindstaff wants to take over the ownership of the mBOM

How important is the BOM issue among businesses? ”Incredibly important”, claims Chuck Grindstaff, and it's not just a matter of semantics, ”The real issue around the Bill of Materials, whether for engineering, for manufacturing, for test or for procurement, is that each of these views of the product are important to the consumer of the BOM. Every view of the 'bill' needs to reconcile to other views and must remain accurate within the context of the total product during each stage of development. We believe that each of these viewpoints needs to be configurable from a common definition; from a single source of truth into the context for each of the engineers. For that reason it's important to get it right. You can call it ”a battle”, yes, but the point still is that a PLM system is the best environment to manage this complexity.”


A "BOM interface" in Teamcenter – eBOM to mBOM Accountability check.

Is an ERP system less suitable to manage the mBOM?

”Yes,” claims Grindstaff, adding, ”For us the structure of the product communicated to manufacturing is a critical part. We feel that Siemens has the best platform to represent the manufacturing structure, the variation of that structure by the factory and by the manufacturting process. We have that conviction due to the deep set of tools we have for planning and configuration for managing the actual manufacturing environment.”

The BOM is the result of a lot of design activity, Chuck asserted, pointing at manufacturing planning and the many participants in the product development process, ”The BOM is definitely the result.” For example, it does not necessarily connect that the financial realm, which is the traditional province of the ERP systems, should be the holder of the BOM. According to Grindstaff, ”The idea of coming in at the end of the process to say, ”I want to own that final answer”, is not enough. You have to think about the knowledge elements, the objects that gave rise to a decision that is embodied in a particular part, in a sub-system or in the entire system.”

Coming at it from the other side, the ERP side, is not going to get you to ”the science of the product,” according to Grindstaff. In his opinion, that approach may fail to represent the real way in which the decisions, the logic, the engineering rules are built in to the product. ”We're coming at it from the other side, the PLM side. It means that we're able to make decisions based on an understanding of the product rather than just having simple rules of the type, ”if you changed this please talk to that person”.

It's clear that the BOM topic engages Chuck Grindstaff. He is visibly excited about how far Siemens has come today with PMM, the BOM management module of Teamcenter, ”What we've been doing is taking all that architecture developed in Teamcenter PMM and bringing that even further together with all of the rest of the value stream. We've talked about systems driven development, the way in which that early engineering BOM connects to the production and the manufacturing BOM. Smoothing out all those semantic links is really right before us.”

PMM is on the development road map to be part of the entire chain so that the design engineers can view a fully configured product as it would be delivered. ”The engineers who make the production decisions can see the impact all of the way back from the product development engineering space. We're excited about it”, Grindstaff explains.


Marine engine manufacturing at Wärtsilä. The head of global
PDM/PLM in the company, Shefali Arora, shares
Chuck Grindstaff’s vision of the mBOM ”owned” by the
PLM platform.

Positive reactions from customers and analyst's

It's not hard to understand Grindstaff's enthusiasm, but in the end it's of course the customer's choises that will ”tip the scales”. And according to a couple of Siemens' major corporate customers that I talked to in Berlin the ideas were well recieved.

Global marine engine and energy solutions developer Wärtsilä's head of PDM/PLM, Shefali Arora, is a good example.

”I think it's a good idea out of many reasons”, she said. ”Basically, if you want to maintain traceability right from the inception of the opportunity when it started towards the realization then, yes, we need to have it all on one platform. That platform could be an integrated platform with many other applications and tools. But at the end of it should be a PLM platform, where it's then maintained throughout the entire life cycle. Our vision is that we will have the eBOM, the as-configured BOM, related then to as-built, as-manufactured, and as-maintained, in one PLM platform which will enable us to have ful traceability from the beginning to the end”.

Futhermore, analyst CIMdata's Peter Bilello, said that he ”can see Chuck Grindstaff's point”.

”ERP solutions generally do not actually optimize or have development tools for defining what the manufacturing BOM is. They just focus on executing a defined Bill of Material. So if I look at what Siemens is doing they are based on developing what that mBOM should be and optimizing that BOM. Quite frankly I don't see any of the ERP vendors spending much time, if any time, at all at actually doing that. That said it makes sense for Chuck to claim the ownership since they have the tools to make changes, analyze and optimize the BOM.”

Siemens PLM expands their domain

So far so good then and Grindstaff underscored how Siemens is progressing towards more valuable capabilities when it comes to BOM management as it connects to production. In October, Siemens reorganized to bring more of the digital manufacturing assets together with Siemens PLM.

According to Grindstaff, ”We brought in our Simatic IT product, our IBS quality solutions for planning and execution quality, and on top of that also our advanced planning and optimization PS product. Together all these things provide a rich and deep understanding of what the mBOM structure is and what variation can exist there. Our enterprise manufacturing BOM really does help to do that. This functionality allows manufacturers to have a standard process across the enterprise along with the local variation; properly configured, properly handled and properly executed.”

Systems engineering and systems driven product development

Grindstaff mentioned systems driven product development, suggesting that customers are evolving towards a completely model-based enterprise. He said, ”We're talking about the usage of models of their product's elements and their production elements, all working in a way where predictive answers about the way things would, should and shall work, can be obtained.”

To make this work Grindstaff says that Siemens has to do a comprehensive job of supporting systems level thinking, ”It's about setting the targets; filtering and aggregating data; being able to then ask questions and get the analytical results; not only the Big Data, but also detailed solutions, particulary the multiphysics kinds of simulations; all put together in a shared model in a way that we really can have the extended community understand the impact of what's changed and the impact of what they want to change.”

He added, ”Without systems level thinking you don't have the division of labor, the interface between those knowledge workers that can lead to predictable results. In many ways, systems level thinking glues together almost everything we do.”


The growing product complexity makes it a
better idea to use a system that can handle compexity…

My take: "Technology isn't Siemen's problem, it's the CIO's"

Nothing comes easy in the world of PLM. Siemen's new Smart Innovation Platform could be great for certain manufacturers when everything (Teamcenter, NX, Tecnomatix) works seamlessly. I also believe that Siemens can outperform the toughest other competitor on the mBOM field, SAP.

But competition is fierce. It takes more than technological excellence to displace tough competitors like SAP PLM, PTC/GE, IBM, and Dassault Systèmes with their ”Zero Error BOM” message.

If market success were merely a technical issue, the PLM/ERP space would be easier to forecast. Siemens PLM is technologically well equipped. Analysts like Gartner's Marc Halpern claim that, ”what PLM-players like Siemens are doing on the systems-centric design and production planning field is way ahead of what SAP can do”. On the design side of business they are superior to SAP. He adds that ”SAP was designed for repeatable and predictable manufacturing processes which certainly isn't the case for new product development.”

So what's the problem? Well, CIO's decision making processes within manufacturing companies extend beyond product development. It's not unusual for a CIO to want homogeneity in their IT environments and they are often ”leaning” in the ”business IT” direction. However, in the light of the growing product complexity this may not always be the best idea.

Nobody denies that SAP is a great system when it comes to product records and business IT capabilities. However, in those companies where engineering has a more powerful voice, Siemens may expect to have more success in winning business for product development and production systems.

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