This document discusses the history and role of the manufacturing bill of materials (MBOM) and its relationship to product lifecycle management (PLM) systems and enterprise resource planning (ERP) systems. It explains that the MBOM was originally managed solely in ERP systems, but as products and processes became more complex, PLM systems emerged to manage engineering bills of materials (EBOM) and provide a single source of product knowledge. The document argues that for most complex, global manufacturing situations, managing the MBOM within the PLM is now considered a best practice, as it allows for managing design changes in full context and avoiding errors. However, it acknowledges some companies may still keep the MBOM solely in E

1. MAINTENANCE DIVISION
WHERE IS THE MBOM ?
The MBOM as PLM indicator
Jos Voskuil
www.virtualdutchman.com

2. Agenda
 The history of BOM
 BOM and ERP
 MBOM and PLM
 Future BOM practices

3. History
 In the beginning there was no BOM

4. History
 In the beginning there was no BOM
 Industrial revolution
Production lines
Focus on logistics:
reorder-point (ROP)
reorder-quantity (ROQ)
Methods like:
Economic Order Quantity
(EOQ)

5. History
 Once upon a time there was no BOM
 Industrial revolution
 1964 MRP – 1990 ERP – introduction of BOM

6. History
 Once upon a time there was no BOM
 Industrial revolution
 MRP – ERP – introduction of BOM
 ERP just needed THE BOM. Engineering was a black box.
… and often this is still the case  2012
Engineering Manufacturing

7. History
 MRP – ERP – introduction of BOM
 Engineering was a black box ERP just needed THE BOM
 PDM and 3D CAD introduced a BOM for Engineering
PDM ERP
THE BOM THE BOM

8. History
 MRP – ERP – introduction of BOM
 Engineering was a black box ERP just needed THE BOM
 PDM and 3D CAD introduced a BOM for Engineering
and programmers started to connect them (1999)
PDM ERP
THE BOM THE BOM

9. History
 MRP – ERP – introduction of BOM
 Engineering was a black box -ERP just needed THE BOM
 PDM and 3D CAD introduced a BOM for Engineering
PLM introduced a broader BOM concept, defining
the Engineering BOM and Manufacturing BOM (2001)
EBOM MBOM
?

10. The purpose of the EBOM
 The EBOM allows multi-discipline
collaboration to work concurrently
on the release of a complex product.
 The EBOM concept supports Test Release To ERP ?
Release
iterations in quality and
completeness
Review Design

11. Could the MBOM definition be in ERP ?
 Can ERP work with the provided EBOM ?
 Inside the ERP system manufacturing and process
engineers will prepare the BOM for Manufacturing
• Yes, sometimes
PDM ERP
in case of a
single site
• No, in case of
remote
manufacturing

12. Could the MBOM definition be in ERP ?
 Single Site: can ERP work with the provided EBOM ?
 Get’s complicated for a modular product in a
Build To Order process
 Many changes on the engineering side
Product
M M M
M M M M M

13. Could the MBOM definition be in ERP ?
 Single Site: can ERP work with the provided EBOM ?
 Get’s complicated for a modular product in a
Build To Order process PLM
 Many changes on the engineering side
 Would require coordinated work on the
ERP
ERP side – working in two systems.
 An ERP system is not designed to manage
iterations and comparing changes at • No, in case of
the design side modular product

14. Not every industry process needs a MBOM
 Sometimes companies design their products with
manufacturing in mind – hybrid BOM
 Usually not complex products or short time to deliver
 Often single discipline (mechanical design)
• Yes, for simple,
mechanical products

15. Could the MBOM definition be in ERP ?
Small Companies Other Enterprises
Situation In ERP ? In PLM
Single Site Yes Multiple locations
Local Manufacturing Yes Global Manufacturing
Non-Modular Product Yes Modular Product
Simple Product Yes Complex Product
Note: This is a generalization. Every rule has an exception.
So there must be a rule without exceptions

16. Could the MBOM definition be in ERP ?
Small Companies Other Enterprises
Situation In ERP ? In PLM
Single Site Yes Multiple locations
Local Manufacturing Yes Global Manufacturing
Non-Modular Product Yes Modular Product
Simple Product Yes Complex Product

17. MBOM and PLM - Do we agree on PLM ?
Nobody owns data Intellectual
Property
Everyone shares data
The Critical Change
The MBOM is part of the Intellectual Property
Best to be managed in a PLM environment

18. The complementary roles of PLM and ERP
“PLM systems are reason that ERP
systems can execute, they bring
the product definition and
information to produce a product.”
“ERP systems are built to schedule
and execute the production of well
defined products in the most
efficient way.
ERP systems are needed for the
execution, often the core activity
for manufacturing systems.”
(Old) slide from tech-clarity
closing loop product innovation erp plm

19. MBOM and PLM
reduce complexity !!
PLM – all product knowledge ERP - execution
Tools
Automation
Manual Actions

20. MBOM and PLM
PLM – all product knowledge ERP - execution
Tools
Automation
Manual Actions
Of course reality is not that simple:
• Standard Parts – cost and status information
• Integrated ECR / ECO processes
• New Part approval process

21. MBOM and PLM – global manufacturing
PLM – all product knowledge Local ERP 1
ERP - execution
M
B
O
M
1
Tools
Automation
Manual Actions
Local ERP 2
M
B
O
In case of global manufacturing: M
local MBOM based on PLM MBOM 2

22. Where is the MBOM ?
 The MBOM managed in PLM is a
best practice.
 Managing change in the full context
of the product
 No late discoveries for errors
 Benefit from the shared information
 Customer centric / Quality

23. Where is the MBOM ?
 The handling of the MBOM is a PLM indicator
 The company learned to change
 The company understands PLM
 However:
 PLM is not only about the MBOM
 Not every company needs a MBOM
 Not every company needs PLM

24. What can we expect in the future (5 years)
 No change: Keep the MBOM in ERP
 No burning need (boiling frogs) 60 %
 Nobody gets blamed for not changing
 Small and medium enterprises
with strong IT focus on ERP

25. What can we expect in the future (5 years)
 MBOM in PLM
 Already there or planning ahead 30 %
 They have understood the value of PLM
 Large dynamic enterprises and young companies
with a focus on global operations

26. What can we expect in the future (5 years)
 MBOM is a “dashboard”
 Data is a combination of various systems 10 %
 Using Search technology and
semantic rules to collect and present data
 A disruptive technology that can change the PLM –
ERP game – no longer single source of the truth
The TRUTH =

27. Conclusions
 “Where is the MBOM” should not be the question
It is the same question as “Should I stop smoking”
 The answer is:
Do we wait till we feel the pain?

28. Questions ?
Thank You