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, its boling down to a "battle over ownership of the mBOM", pitting the PLM vendors against the ERP players.

The partnership between PTC and GE Intelligent Platforms to develop a
state-of-the-art integrated PLM-MES solution provides a glimpse of what
could be the next big boom in the world of product realization:
solutions that connect the PLM, MES and ERP systems into seamlessly
functioning IT units for the shop floor and manufacturing. With this
partnership, PTC made up a lot of ground on the PLM "shop floor IT
leader," Siemens (PLM and automation), and on Dassault Systemes.  On
the ERP side the competitive situation is clearer - SAP dominates. 

Why Manufacturers can Benefit from Master Data Management
Gartners 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.

These are good reasons for manufacturing companies to invest more in
this area, and a growing number of them are doing so: "Absolutely",
agrees PTCs CEO, Jim Heppelmann, "manufacturers increasingly recognize
the value of Master Data Management to safeguard the reliability of
the data exchanged between PLM, ERP and MES systems."

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 theres no rule here. 
Several variants and combinations are "on the map".

European aircraft manufacturer Airbus, is a good example of system
diversity. Like most large manufacturing companies, Airbus uses a
number of different solutions to get their BOMs together. The creation
of the mBOM actually involves three systems:

1. Dassault Systemes ENOVIA acts as a vault for CATIA product data
2. PTCs 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 Gartners Halpern. These measures usually
revolve around adding or removing attributes, search, flexible editing,
and traceability etc.

The scope of BOM Management
Manufacturers that dont 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.

"We understood the importance of playing in this area 10 years back and
studied the BOM practices of every major Car, Truck and Heavy
Machinery manufacturer", said Pugal Janakiraman, Director at Siemens
PLM Global BOM Solutions Team.

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 BOMs 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 years acquisition of Apriso.  This
companys FlexNet platform is built to manage and sychronize design data
(PLM) and resource planning data (ERP) in manufacturing environments. 

"Apriso will be integrated with and expand the Dassault digital
manufacturing solution, DELMIA, and the 3DEXPERIENCE platforms
capabilities", said DS CEO, Bernard Charles when the $ 205 million deal
was revealed in mid 2013. He continued, "Aprisos solutions synchronize
global manufacturing networks, offering real-time visibility and
control over the business processes performed by plants and suppliers. 
These solutions establish a common set of operational standards that
can be managed holistically, on a global basis, while continuously
improving and meeting local market and customer needs."

PTC and GE Intelligent Platforms – an aggressive challenger
PTC has been working hard to develop its 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 PTCs 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 PTCs 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 wont 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.