The Next Big Boom in PLM and ERP and the Battle Over mBOM Ownership

Do you manage your master data with spreadsheets? Throw them out. The analyst firm Gartner recommends that you use a Master Data Management (MDM) solution instead.

They cite good reasons for making the switch; "MDM has the most impact on things like cost and quality."  Master Data Management is a hot topic with large manufacturing companys and as a result, it is also an important development path for the PLM and ERP vendors. 

In fact, it's boling down to a "battle over ownership of the mBOM", pitting the PLM vendors against the ERP players.

Why Manufacturers can Benefit from Master Data Management
Gartner's PLM analyst Marc Halpern talks about MDM (Master Data Management), which he claims has been "a weak link when it comes to product realization processes. Yet, there are gains to be made, especially when it comes to stuff like BOM (Bill of Materials) management." He adds that, "managing BOMs with high level MDM solutions has the most impact on life cycle performance". It affects almost everything from cost, quality and sourcing, to tooling, factory layout, customer options, and service efficiency.

Here are the top five reasons why manufacturers need Master Data Management (according to Gartner):

1. Master data has too many masters
2. Effective new product development and introduction (NPD&I) requires unstructured collaboration
3. Complex manufacturing chains make product data harder to track
4. Orchestrating different enterprise applications is proving too costly and complex
5. High business risks and costs of product data errors

7 Root Causes of Product Data Errors
Ashley Morris, a researcher at Cardiff University in the UK, has identified seven root causes of product data errors. The three most important ones are:

1. Inaccurate data entry
2. Incorrect data flow between applications
3. Duplicate data between systems

Product development teams are all-too-familiar with how these errors occur given the various systems that manage the data. Generally cBOMs (configuration BOMs) and eBOMs (engineering BOMs) are created in the PLM systems, whereas mBOMs (manufacturing BOMs) and sBOMs (service BOMs) emanate from ERP or/and MES systems. But there's no rule here.  Several variants and combinations are "on the map".

1. Dassault Systemes ENOVIA acts as a vault for CATIA product data
2. PTC's Windchill configures the BOM based on the CATIA data
3. SAP is the "official issuer" of the mBOM

The Airbus system currently works well, but it illustrates the kind of challenges that companies faces. To deal with this diversity effectively, implementing APIs (Application Programming Interfaces) between PLM, ERP, MES and MRO systems is a top priority. 

"But manufacturers at this level normally have higher ambitions than that, and to become even more effective you have to either make or break relationships," says Gartner's Halpern. These measures usually revolve around adding or removing attributes, search, flexible editing, and traceability etc.

The scope of BOM Management
Manufacturers that don't have Master Data Management solutions typically manage with spreadsheets, but there are other options.  For larger industrial enterprises ERP-based MDM (Oracle and SAP), manufacturing specialty MDM to manage BOMs across the product life cycle (like PLM solutions from Arena or Aras) or pure play MDM (Riversand or Stibo Systems for instance) are all possibilities.

While these solutions serve many purposes, Gartner suggests that the best MDM/BOM practice is to understand the scope of BOMs from the life cycle perspective, "This in turn involves successfully linking BOMs from different authoring systems, involving suppliers early, and establishing a governance group".

Clearly this means that companies must, "insist on replacing spreadsheets" as Gartner puts it, particularly if a company has a life cycle approach to business.

There are many benefits that can come from implementing enterprise MDM for data solutions with long life cycles. For example, a U.S. based consumer electronics manufacturer reduced the time and cost of engineering changes by 30 %; an industrial equipment manufacturer improved their enterprise BOM management by streamlining their PLM and ERP systems; and a European equipment manufacturer increased their accuracy and efficiency with complex requirements along with their revenues.

Siemens PLM is currently in the lead
When it comes to commercial PLM systems Siemens is in the forefront of MDM solutions with its traditionally strong position in product development and shop floor IT. Their Industry 4.0 concept is a framework for systematically developing the access points that are required for a seamless solution. To read more on that topic, please see Siemens, Tesis PLMware and Industry 4.0.

The main components of the Siemens solution are the PLM suite, Teamcenter (TC) including Tecnomatix (digital manufacturing) and may also include the Totally Integrated Automation ("TIA") Portal for MES (Simatic IT) along with other manufacturing related modules.

These industries were prioritized because of product complexity, variability and high production volumes. Based on the results of these studies Siemens invested heavily in building a robust BOM system on the Teamcenter architecture, called TC PMM (Product Master Management).

"The objective of this BOM module (TC PMM) is to provide an integrated BOM foundation spanning Engineering, Manufacturing, Prototype and Service domains." The tight integration to design and manufacturing processes can drive virtual validation of both these process types from a BOM point of view. "With our approach the BOM is documented once and various other BOM's like mBOM, sBOM, pBOM etc are derived from this core eBOM, without re-documentation."

By building this integrated BOM module within TC, Janakiraman claims that "Siemens provide a system which is not only integrated in product data (BOM, CAD, etc) but also in processes like Change Management, "This provides a huge value proposition for key enterprise processes to happen within one system."

Janakiraman adds that, "by virtue of playing in the mBOM domain we had to build a system that can do hundreds of thousands of BOM solves in matter of 1-2 hours to handle key MRP use cases like forecasting runs, which traditional PLM and ERP architecture could never handle for large complicated auto companies."

Dassault Systems aquired Apriso to strengthen MDM
French PLM developer Dassault Systèmes has also taken several steps to strengthen their Master Data Management offering. Their goal has been to turn their 3DExperience platform - including the DELMIA suite (digital manufacturing) - into a catalyst to pair product development and manufacturing. Their intentions could be seen a couple of years ago when they initiated a partnership with Rockwell(MES), but perhaps most notable is last year's acquisition of Apriso.  This company's FlexNet platform is built to manage and sychronize design data (PLM) and resource planning data (ERP) in manufacturing environments. 

PTC and GE Intelligent Platforms – an aggressive challenger
PTC has been working hard to develop it's offerings during Jim Heppelmanns leadership. Their latest effort is directed towards the integration of PLM (Windchill) and Manufacturing Execution Systems in PTC-centric environments.

Earlier in 2014 they announced the new "Proficy + PTC Windchill", a solution developed in partnership with GE Intelligent Platforms to bridge the gap between product design and manufacturing. This means that PTC's full product suite now covers product development, service and manufacturing, as well as Internet of Things development.

Prior to the GE partnership, digital tools for production control were somewhat lacking from Windchill. While there has been significant development work on software like MPMLink, the development team has focused on manufacturing-related BOM solutions rather than on deep PLM-MES integration. The GE deal changed PTC's position such that they can now challenge in the MDM arena.

PLM or ERP?
The ERP vendors will not give up the mBOM battle easily. SAP has taken several steps to address the PLM developers' increasingly aggressive encroachment on what has historically been ERP territory. Companies won't be making changes away from their current solutions easily.  The switching costs are so high that the promise of benefits will have to be even higher to entice companies to surrender their spreadsheets.