PLM à la PTC: Manufacturers Have Big Gaps in Digital BOM Management
Verdi Ogewell posted on April 17, 2018 |

PTC is working hard, not only in the IoT field these days, but also in the BOM area. After their recent win that saw BMW select PTC Windchill as its PLM backbone for production and for their sourcing bill-of-material (BOM), PTC’s confidence is high. CEO Jim Heppelmann foresees a great future in automotive.

I think it's a very interesting time in the automotive business, being a very advanced industrial sector. And yes, we're starting to see some interesting possibilities. We don't want to get ahead of ourselves, but we feel good about things,” Heppelmann said in the company’s recent financial reporting call.

PTC’s head of Nordic operations in Europe, Filip Ståhl, couldn’t agree more, especially when it comes to BOM management.

“It’s time to be radical about what can be done with BOM’s (Bill of Materials),” Ståhl said, adding that, “Digitalization has opened so many doors to more rational and effective product realization, manufacturing and maintenance processes today. Still, the options are not used.”

Product data is already there in a modern PLM system, so it’s a waste not to utilize it more than what is commonly done, Ståhl asserted. 

“What we need to do is to get going on the route to modern BOM management. And I’m not talking about just eBOM’s (engineering BOM’s) or mBOM’s (manufacturing BOM’s),” Ståhl added. “Today there is a broad variety of solutions that can make life easier and more productive for engineers and companies. A lot can be gained by developing strategies and implementing solutions to move above traditional CAD data management by adding digital BOM management.”

PTC’S WIN AT BMW IS A BIG COMMERCIAL SUCCESS in the automotive sector for the American PLM player. BMW Group has 31 production and assembly facilities in 14 countries, and in 2017 they sold 2,272,158 cars—the bulk of these vehicles under the BMW brand. What’s PTC’s role in this? Windchill will serve as a backbone in production for BOM handling (Bill of Materials). BMW will use Windchill partly to enable global configuration and partly as a basis for the release of cars for production. PTC’s CEO Jim Heppelmann says that the company, “has a lot more in the automotive pipe.”
PTC’S WIN AT BMW IS A BIG COMMERCIAL SUCCESS in the automotive sector for the American PLM player. BMW Group has 31 production and assembly facilities in 14 countries, and in 2017 they sold 2,272,158 cars—the bulk of these vehicles under the BMW brand. What’s PTC’s role in this? Windchill will serve as a backbone in production for BOM handling (Bill of Materials). BMW will use Windchill partly to enable global configuration and partly as a basis for the release of cars for production. PTC’s CEO Jim Heppelmann says that the company, “has a lot more in the automotive pipe.”

According to the analyst firm Tech-Clarity, Ståhl has a point. He’s also supported by a recent PTC survey, which indicates that the use of BOM’s leaves a lot to be desired. Of the participating manufacturing companies, for example, 55 percent did not have a digital service BOM. This meant that the design department's product data is not reused for this purpose. Even more surprising, 20 percent didn’t have an eBOM management solution in place.

These are only two examples, but there are many more.

In this article we’re going to discuss BOM’s in general and service BOM’s in particular. The latter not least because it’s one of PTC’s most cherished areas.

“One of the Greatest Challenges of PLM”

Different types of BOMs are central to product development and manufacturing. Yet, the most commonly used BOM’s only reflect product development work in eBOM’s, and manufacturing in mBOM’s. This is a limited scope in view of the potential that exists today.

THE BOM HURDLE. “We are continuously on the lookout for new practices, processes and technologies that will help overcome this hurdle,” said Gartner analyst Marc Halpern.

THE BOM HURDLE. “We are continuously on the lookout for new practices, processes and technologies that will help overcome this hurdle,” said Gartner analyst Marc Halpern.

On the other hand, it's not easy to manage this kind of question,  says Gartner’s Marc Halpern. He has studied BOM-related issues for many years and points out that BOM management is one of his clients’ biggest challenges.

“Indeed, BOM management across different BOM representations for any given product or structure is one of the greatest challenges of PLM because each BOM type (cBOM, eBOM, mBOM, sBOM, etc.) is organized differently, has different levels of detail, and each item in each of these BoM types is likely to have different attributes. Our clients struggle with the BOM management capabilities of every major PLM vendor.”

However, the status of mainstream technology for managing BOMs is just one cause for the challenge. 

“The structure of organizations, deeply ingrained design-through-service processes and behaviors, the legacy of having each BOM type managed in siloed legacy applications and the sheer complexity of mapping equivalent BOM items across each BOM type all contribute to the challenge. We are continuously on the lookout for new practices, processes and technologies that will help overcome this hurdle,” Halpern added.

It is also clear that new solutions “pop up” in a continuous stream. This also means that BOM’s are gaining a potentially ever-increasing spread in product realization, distribution and end-user contexts, not least of which are related to the emergence of IoT solutions and the aftermarket management that follows in its tracks.

THE COSTS OF POOR BOM MANAGEMENT. Analyst firm Tech-Clarity’s Jim Brown and his team explored BOM management in an extensive Buyers Guide. “Many companies operate with ineffective and immature BOM management processes without recognizing what it costs them,” Brown noted.
THE COSTS OF POOR BOM MANAGEMENT. Analyst firm Tech-Clarity’s Jim Brown and his team explored BOM management in an extensive Buyers Guide. “Many companies operate with ineffective and immature BOM management processes without recognizing what it costs them,” Brown noted.

The Costs of Ineffective and Immature BOM Management

But despite these growing opportunities, “many companies operate with ineffective and immature BOM management processes without recognizing what it costs them in poor efficiency, excess cost and lost time,” according to analyst Tech-Clarity’s report, BOM Management Buyer’s Guide. The report identifies a number of ineffective BOM management “costs,” among them:

  • Errors in manufacturing
  • Poor first-pass yield
  • Ordering the wrong parts
  • Delays due to part shortages
  • Inability to confidently adopt engineering changes
  • Slow time to full volume production
  • Late identification of manufacturability or serviceability flaws
  • Poor traceability
  • Compliance issues or excess effort to comply
  • Scrap and rework

The conclusion is that BOM management is often managed through methods that aren’t enterprise ready, “including documents, spreadsheets or embedding the BOM into CAD drawings.”

A BOM SOLUTION À LA PTC. Windchill PDMLink has many out-of-the-box reports. One of these is the Multi-Level BOM Compare report. This report can show differences between versions, configurations and even unrelated product structures. The Multi-Level BOM Compare report can be accessed from the structure page of any object.
A BOM SOLUTION À LA PTC. Windchill PDMLink has many out-of-the-box reports. One of these is the Multi-Level BOM Compare report. This report can show differences between versions, configurations and even unrelated product structures. The Multi-Level BOM Compare report can be accessed from the structure page of any object.

The Characteristics of a BOM

A BOM can be defined as a "table of contents of the parts and components that constitute a product, part of a product or product structure." It is roughly a list of materials, or a list of units and the quantities of each one needed to manufacture a final product. The BOM designation is also often used by engineers as an adjective to refer to a product's configuration.

According to Wikipedia, the BOM can define products as they are designed ("eBOM") as ordered ("Sales BOM"), as manufactured (mBOM), as configured ("cBOM, configurable BOM") or as they are to be maintained ("sBOM or service BOM").

There are several more, but they all revolve around companies’ needs and the purposes for which they are intended, including tough challenges such as variant handling of passenger cars or trucks.

Generally, these things apply in the area we call discrete manufacturing—that is, products that are assembled from mechanical and electronic parts into an end product such as cars, mobile phones and the like.

In the process industry it looks a bit different. The products in this industry type are undifferentiated, such as oil, natural gas and salt. Here a BOM can be a formula, a recipe or an ingredient list.

“THE BOM IS THE NEW BLACK.” PTC’s Katie Scherbel is the company’s director of marketing for the PLM and ALM division. She’s also a BOM enthusiast: “I am convinced that BOM is becoming the ‘new black’ once more. Why? People need the BOM and it is in again. Our job is to make it easy for organizations to embrace and transform their BOM and get their teams ready for what’s to come on their roadmap.” According to a recent PTC poll. this crusade seems to be important: nearly 20 percent of the participating companies didn’t have eBOM management at all.
“THE BOM IS THE NEW BLACK.” PTC’s Katie Scherbel is the company’s director of marketing for the PLM and ALM division. She’s also a BOM enthusiast: “I am convinced that BOM is becoming the ‘new black’ once more. Why? People need the BOM and it is in again. Our job is to make it easy for organizations to embrace and transform their BOM and get their teams ready for what’s to come on their roadmap.” According to a recent PTC poll. this crusade seems to be important: nearly 20 percent of the participating companies didn’t have eBOM management at all.

Surprisingly Few Companies Have Automated sBOM’s

This brings us to a few words on the PTC “BOM poll” mentioned above, which was taken during a webinar on how discrete manufacturers can align their service and product lifecycle strategies by transforming engineering BOM’s into service BOM’s. The results are shown in the tables below.

The statistical basis is quite thin in terms of the number of participating companies, but if the results are significant–which PTC’s director of service marketing, Carolyn Gross claims–they are a little surprising:

“Based on the survey of 47 employees working in discrete manufacturing companies, 55 percent of companies did not have digital service BOM’s. In essence, they do not use their respective company's technical product data to associate and automatically generate information about service management. Certainly this is a little remarkable in the age of digitization.”

To the question, Does your company handle a digital service BOM through a single system?, the answers were the following:

What seems to matter is whether the company has a single PLM system.

"The reasons for this are many, but on the basis of the results of the survey, I would say that it has to do with the fact that only 37 percent of organizations manage their eBOMs through a single system. Nearly 20 percent have no eBOM management at all,” commented Gross.

Her thesis is that with a modern PLM system, it is usually easier to generate BOM’s based on design data collected in a single database where the information is compatible for use in multiple modular functions. However, in the PTC poll, this proved not to be the case. Here are the answers:

HANDLED IN A LIMITING MANNER. “Many companies handle their CAD objects–which include attributes of the physical components and can be derived to the engineering BOM–in a limiting manner, and do not extend them to the BOM side,” asserted PTC’s sales manager of PTC Nordics in Europe.

HANDLED IN A LIMITING MANNER. “Many companies handle their CAD objects–which include attributes of the physical components and can be derived to the engineering BOM–in a limiting manner, and do not extend them to the BOM side,” asserted PTC’s sales manager of PTC Nordics in Europe.

“This result means that most companies are not able to automatically keep their part directories, repair manuals and other service publications updated with engineering changes. Especially in the light of the fact that 22.2 percent of respondents said they have sBOMs, but they are incomplete or unreliable,” concluded Carolyn Gross.

From CAD Data Management to "BOM Management"

What makes digital serviceBOMs so important to develop?

As Filip Ståhl explained, “Service BOMs represent the parts (mechanics, sensors and software) that can be modified or adjusted in field equipment, i.e. products that are located at users or end users. They can associate with both eBOMs and CAD (for 3D and/or augmented reality visualization) and they can also relate to content such as assembly procedures. 

Essentially, the Service BOM drives the 3D indexing of an equipment's service content and keeps the content up to date with the technical design.”

According to the PTC poll, only 55 percent of companies have service BOMs; what's the problem?

“It’s simply because many companies handle their CAD objects–which include attributes of the physical components and can be derived to the engineering BOM–in a limiting manner and do not extend them to the BOM side,” Ståhl asserted.

What does the PTC solution look like?

“BOM Management enables derivative BOM’s transformed from the engineering BOM, such as the manufacturing BOM and service BOM.  This association keeps the value chain traceable with engineering changes, and promotes the indexing/visualization values noted above. There’s big value here for manufacturers as IoT, for example, enables greater fielded equipment visibility.  So, many organizations are getting their ‘digital houses’ in order by growing from CAD data management to BOM management,” Ståhl said.

PTC claims that there’s great value here for manufacturers. Why?

“IoT enables increased visibility with regard to equipment and devices in the field. The conclusion to gain more potential from this type of initiative is that organizations get settled in their ‘digital houses’ by switching from ‘just’ CAD data management to BOM management," said Ståhl.

A BASIC DIGITAL BOM REQUIREMENT is a Service Information System. In the picture above, an example of the interface in PTC’s Service Information Manager.
A BASIC DIGITAL BOM REQUIREMENT is a Service Information System. In the picture above, an example of the interface in PTC’s Service Information Manager.

What’s Required to Create Digital Service BOMs?

What do you need to efficiently connect engineering data with service solutions (sBOMs) in order to create associative digital systems that show updated information?

On a basic level, a digital sBOM requires some type of Service Information Management (SIM) system that is connected to (or part of) a PLM system. The reason why this integration is necessary is that eBOMs are usually handled in the PLM solutions.

The PLM system creates a digital eBOM, which the connected SIM system identifies. The SIM system then packages the information relevant to service efforts (such as a service package including multiple parts), and creates the separate BOM content information that is applicable.

Since both eBOM and sBOM are digital, the sBOM is automatically updated to reflect any changes. There is simply a "living" associative link between the BOM types.

Overall, solutions with this kind of setup allow organizations to keep all their latest technical publications up to date with changes. This eliminates the risk that resellers order incorrect parts through current sub-directories and that technicians do not see correct product descriptions in the service manuals.

Airbus Helicopters, Embraer and several companies in the high-tech automotive industry are good examples of how to manage digital sBOMs through SIM solutions.

eBOM IN PTC, mBOM IN SAP. European airplane manufacturer Airbus works according to a system where the eBOM’s are produced by the company’s PTC solution. This eBOM is transferred to Airbus’ SAP system where the mBOM is issued.
eBOM IN PTC, mBOM IN SAP. European airplane manufacturer Airbus works according to a system where the eBOM’s are produced by the company’s PTC solution. This eBOM is transferred to Airbus’ SAP system where the mBOM is issued.

Seven Critical Functions According to PTC

What are the benefits of using a digital service BOM system? PTC has a lot to say about this.

"ServiceBOM’s have seven critical features," says Filip Ståhl, pointing to the Windchill's ability to handle these pieces in functional modules such as Service Information Manager and Windchill Service Parts.

  • Organizes spare parts information based on in-field configurations, operating conditions and other service-specific data.
  • Automatically updates parts information whenever engineering teams apply changes.
  • Centralizes and organizes product information according to serviceable components, sub-components and parts.
  • Includes and excludes specific service information depending on its applicability in certain situations.
  • Recognizes dependencies among components and associated parts.
  • Enables technical publications managers to reuse service content and maintain publication composition.
  • Collectively, these functions have increased technical writer efficiency between 20 percent and 90 percent.
A PTC WIN. BMW chose PTC for global BOM sourcing on the manufacturing side. One qualified guess is that if PTC does well on the parts they won, there is a good chance that Windchill will see a broader role at BMW.
A PTC WIN. BMW chose PTC for global BOM sourcing on the manufacturing side. One qualified guess is that if PTC does well on the parts they won, there is a good chance that Windchill will see a broader role at BMW.

Will German Premium Car Maker BMW Bet on PTC as a Backbone?

Important reasons for PTC’s win at BMW appear to be their ideas surrounding broader BOM management solutions. These include PTC’s IoT portfolio on the ThingWorx platform, as well as the work to integrate and create connections between IoT and its PLM suite, Windchill.

BMW’s choice of PTC, and the earlier choice of Aras PLM for the test department, was a somewhat surprising move given that they generally based their PLM work on the proprietary PRISMA platform, SAP IPPE, and CAD tools from Dassault Systemes (CATIA). For Digital Mock-Up (DMU) they have a Siemens Teamcenter instance in place to manage the lightweight, “neutral format” JT data, while in production Siemens Tecnomatix plays a key role in process planning simulation. This means BMW uses a lot from the other two leading PLM players, Dassault and Siemens, but no PTC tools on a broader scale.

In comparison, up until now software from PTC has had a shorter, and less successful history at BMW with ProEngineer being used as a tool in engine development. If I remember correctly, BMW used “ProE” in engine development in the early years of 2000; however, when I asked PTC about today’s situation, they simply stated that, “there are no PTC CAD solutions used at BMW.” My assumption is that it didn’t work according to plan, and was either phased out or never put into active production on a borader scale. So far, it has been impossible to get a clear answer about what actually happened.

Today, PTC’s proactive bet on IoT and its PLM integration, as well as new ideas around BOM management—including Vuforia and augmented reality tools—has obviously made an impression.

My qualified guess is that if PTC does well on the parts they won, there are good chances that Windchill will see a broader role at BMW. Why? Don’t miss my coming article on this topic.


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