Managing the Entire Bill of Materials: The Autodesk Productstream Edge

11/30/2006-1:00 pm - 2:30 pm Room:Marcello - 4503 (MSD Campus) Managing the Entire Bill of Materials: The Autodesk Productstream Edge Eamon O'Gorman - Autodesk, Inc. Stephen Maloney - Autodesk, Inc. MA33-2 A single source of BOM data is critical in improving product development process efficiency. This class will feature a presentation and a series of live demonstrations showing how Productstream s Bill of Material Management capabilities will enhance BOM accuracy and drive more efficient engineering processes. The importance of continuity of BOM data throughout the entire process from CAD to downstream systems such as ERP will be discussed. The benefits of ERP connectivity will also be discussed and justification for integration to downstream systems presented. In this class we ll cover the following subjects: Manage BOM data from multiple CAD sources to establish the design BOM Include non-cad data in the BOM Add bulk data items to the BOM to establish the engineering BOM Revisioning and Lifecycle State control of BOM data Different ways of viewing BOM data Release of BOM information and updating downstream systems such as ERP Connecting the Engineering BOM with ERP Benefits of ERP integration About the Speaker: As a Product Manager for the Autodesk Data Management product line, Eamon works closely with the development team to ensure Autodesk Vault and Productstream reflect customer and market requirements. Since joining Autodesk in 2004, he has worked closely with customers and channel partners to help grow the data management business. Prior to joining Autodesk, Eamon spent 10 years in pre and post-sales with UGS, firstly in the UK, then more recently in Silicon Valley. During this time he worked with UGS CAD tools and the entire Teamcenter product suite. His legacy being SDRC, Eamon spent a number of years before this using I-DEAS for design and analysis in the automotive industry in the UK. Brian is the former president and CEO of trueinnovations, developers of the Autodesk Vault. He now works for Autodesk as a product manager in the Manufacturing Solutions Division's Data Management Solutions product line. This product line includes Autodesk Vault and Autodesk Productstream. Steve joined Autodesk Consulting in 2005 and is working on customer implementations. He has 30 About years the experience Speaker: working with manufacturing organizations, both as a designer/project engineer, and also implementing, training, and providing integrated solutions. Before joining As a Product Manager for the Autodesk Data Management product line, Eamon works closely with the Autodesk, he worked for another software developer, where he had product manager development team to ensure Autodesk Vault and Productstream reflect customer and market responsibility requirements. for Since Manufacturing joining Autodesk and Bill in of 2004, Materials he has applications. worked closely with customers and channel partners to help grow the data management business. Prior to joining Autodesk, Eamon spent 10 years stephen.maloney@autodesk.com Stay Connect to AU all year at www.autodesk.com/auonline

Terms and Explanations used in this Handout The terms described below are used frequently in this handout and in the presentation, so it s important that we all have the same understanding of them in relation to their use here BOM Item Lifecycle ECO ERP Data Mgmt. Bill of Material A physical component that needs several different data and document objects to enable manufacture The different work and approval states that an item goes through during design, approval and reengineering Engineering Change Order, a container for all objects under a change process Enterprise Resource Planning, corporate wide information and process management system Application to manage work in progress engineering data primarily generated from CAD applications Bills of Material are complex objects with multiple data sources In order to effectively manage Bills of Material (BOM) data, we need to understand that it s a complex subject, with many different types of BOM, gathered from multiple sources. The different types of BOM can be summarized as: PARTS LIST, BOM of drawn parts extracted from CAD applications. ENGINEERING BOM, contains parts list plus non-drawn items added by engineers. PRODUCTION BOM, contains also all required items to complete the assembly, such as paint, grease, and test schedules. AS-DELIVERED BOM, a full record of all items used to manufacture and test the shipping machine, including breakdown and re-assembly instructions, kits and manuals to facilitate the product installation at the customer site. AS-INSTALLED BOM, a complete record of the product AFTER the installation was completed and handed over to the customer, so is exactly what is installed and working. Machines are complex, they have newly designed and re-worked mechanical components. They have electrical components and wiring. They have standard manufacturing items like paint, lubrication etc. They require certificates, manuals, and shipped spare parts. Data Management is about managing ALL of these data inputs effectively. Gathering Mechanical Data For users of Autodesk Inventor together with Autodesk Productstream, this is a simple task. Adding an Assembly model to the vault also adds all sub-components automatically. It s then a simple task to use the Assign Item command with the assembly to make Items and BOM structure in one step. 2

Items are automatically numbered according to one of the created schema (configurable). Gathering Electrical Data Electrical design is a much more complex area to address, since we design in schematics, that are wiring diagrams with references to the same components on multiple sheets. It s therefore not easy to gather the product structure simply from the schematic drawings. Fortunately for users of AutoCAD Electrical, the project file is a master container that holds all this information for us, so it s a matter of adding the project file to Productstream, and then this takes all the schematic drawings for that project along with it. Similarly, assigning the project file to an item will construct an electrical Bill of Materials from all the components referenced on the schematics Add the project file to the vault from within AutoCAD Electrical 3

Created Electrical Bill of Material in Productstream Adding Data From Other Sources In many companies non-drawn or standard product data already exists in some form or another, usually in company databases, or perhaps in an ERP system. Almost all of these can export data to neutral formats such as CSV, TDL, or XML that Productstream can import. These can easily be used to bulk import data that can then be added as new BOM Lines to the assemblies created with Autodesk Inventor. So, now that we have established that we can collect data from multiple sources into Autodesk Productstream, what do we do with it? 4

Producstream BOM Functionality OverView It s not the purpose of this paper to become a demonstration scenario for Autodesk Productstream. However, it is important to understand that it can offer good, simple and flexible control over manufacturing information. First of all, the naming of the created items is greatly flexible, with multiple schema supported. Item Types are gathered automatically from CAD data such as Assembly, Part, Purchased. It s also possible to create your own Item Types, perhaps to comply with those available in your ERP system. The Bills of Material are versioned objects, with history maintained, so that you can visually compare two versions of the same BOM to see what was changed. The data columns shown in the BOM window are also configurable, so that your users see exactly the information that you want them to see. Productstream automatically adds database properties gathered from the file properties of all documents that are added. However you can also add properties to Items, and configure the exchange of these with the file properties. You can determine if File or Item is leading. This is particularly important with CAD Titleblocks, so that if an Item undergoes a change process, the correct data is written back to the CAD file so that incorrect data is not shown and printed. This feature is called Property Write-Back. Item Properties can be made compliant. This means that an Item is not allowed to be released unless this data is completed. Documents are locked from edit if the item they are assigned to is released, and releasing a top level assembly releases automatically all sub-components. Long Lead Time Items can be released individually. Productstream has an ECO mechanism that supports both Engineering Change Request and Change Order workflows. Flexible numbering, customizable ECO properties and routing lists ensure that engineering changes can be managed and tracked efficiently, and that Bill of Material information is always up to date. ERP Integration, what is meant by this? Engineering The Design and Approval Processes for New Designs and Modifications (to existing designs), centred around CAD. Requires controlled release management. ERP Enterprise Resource Planning is a framework of modules that connect all aspects of business together, sharing the same information, and automating business processes between departments, and even between companies. Traditional Engineering Approach The key element is getting accurate Bills of Material information from CAD design to other departments to allow correct procurement and manufacture. Often engineering completes it s As-Designed BOM, and throws it over the wall to manufacturing. Changes require re-engineering (in the engineering department) and then back to manufacturing, causing delays. ERP Approach ERP manages everything, all part numbers allocated from ERP. Tends to focus on one document = one part approach, which suits 2D AutoCAD, but is contradictory to fluid 3D design methodologies such as Autodesk Inventor. 5

Always developed by a 3rd Party (i.e. ERP vendor), so there are always delays before a customer can update to the latest, more productive CAD software, because of need for integration compatibility. Practical Design Approach Practical Data Management manages Engineering work through release and subsequent controlled modifications. Invisible integration with CAD systems, meaning more productive CAD processes. Developed by the CAD vendor, so always immediately available when a new CAD software updates are released. Engineering choose when to release data to procurement, manufacturing, etc. The tail is not wagging the dog ERP Integration To Do or Not To Do? In order to establish if we should consider integrating Engineering Data with ERP, we need to first of all investigate to see if it really is a problem; and if it is, what are the costs of the problem, so that we can make a cost justification for the investment. For the machine building industry, it s a competitive market, with margins often down around 8%, and tighter deadlines on delivery because of competition. Moreover, customers often specify late delivery penalties in all tender documents. Any mistakes made can be costly to a project on such tight margins, so to explain how you might be able to work out costs of errors made in your processes today, we will cover 4 topic areas Purchasing / Stock Management Mistakes Eroding Tight Margins Spares/Repairs Inefficiencies Wasted Resource This is intended only as suggestion to how you might go about calculating inefficiency and wastage costs in your business processes, which might be helped by having one common engineering/manufacturing dataset. Purchasing / Stock Management Simple Example : We buy a particular roller bearing in units of 50@ $34.95 each. Required number per finished delivered machine is 180 (from CAD designed BOM). Last year we delivered 27 machines, this year orders for 33 machines. Required quantity for next year = 5940. If we can buy in quantities of 1000 (x6 over the year) : Unit cost is $34.45. Saving is $0.50 per bearing, $3,000 per year. If this savings model is applied over each of 15 product groups (where saving might be less per unit, but higher quantities so use same savings model), then : Projected annual saving is $45,000 per year. 6

Mistakes Eroding Tight Margins We supply a new machine to a customer at a cost of $480,000 at full 8% margin (= $38,400). A mistake is made when manually entering BOM into ERP system (and it s not noticed until assembly phase) A Cooling Tower Gearbox has been specified in the CAD BOM as - Part No. 778891 Cooling Tower Gearbox. This is the model CDT-A32 cost = $9,000 In the ERP system is entered - Part No. 778991 Cooling Tower Gearbox. This is the model CDT-A34 cost = $12,780 There are many cost implications Supply of new Cooling Tower Motor $9,000 (supplied 778991 stays on stock, possible recovery on later project) Admin costs of correcting error and re-order $ 170 (2 hours at $85) Production down-time waiting for correct Item $10,000 (4 days at $2500 per day) Production staff salary 2 men 2 days $1,360 (for 2 days other work could be found, but for other days 2 men, 16 hours@ 85) Late Delivery Penalty from Customer, 2 days $2,400 (2 days made up, so only 2 days late) (costed at 0.25% machine cost ($480,000) per day) REAL Cost of error made $22,930 Or, in terms of the $38,400 margin, we just lost almost 60 % of our profit. Spares / Repairs Inefficiencies If you don t know which versions of which products exist in which machines out in the field, how can you ship the correct spares? Most customers tell us that they frequently ship the wrong spare parts, some as many as 30%. Many machine builders are accepting low margins of a competitive market, in order to gain more cost efficient spares/repairs business. Many machine builders include X years maintenance of machine in whole customer project. There s a lot of business (and reputation) to lose here. 7

A small example - A customer requests 2-off replacement roller kit for his conveyor for a scheduled maintenance operation. Current specification has been refined over the years resulting in a more reliable/lower cost Unit, but the Customer s machine has been running for 7 years and is the original design spec. You supply the current specification which is not compatible. There are 3 possible Cost Implications You replace the Kit Original supplied kits stay on stock at internal cost of $1777.50 X2 You supply the right kit next day delivery @ $90 pickup and deliver Total is [ (1777.50 x2) + 90 + ((1957.25-1777.50)x2)] $3,992.50 Customer sources spares elsewhere Customer frustrations with your errors means he will source spares from another supplier (competitive market) Customer cancels maintenance contracts You have made these kinds of mistakes before, it has cost the customer too much down time of his production line, and he cancels the maintenance contract for all 5 machines installed, at 7.5k per year each Lost business in case C is $37,500 per year. Wasted Resource Engineers need to know which standards to use, and this information is usually driven by the Logistics system (ERP). Non-CAD users need to refer to drawings and documents that describe a standard item, and are made by engineers. Often time is wasted by re-typing engineering data into Logistics system, or vice versa. Example Each applicable person in the organization spends 45 minutes of their time per week on one or more of the above activities at typical cost (salary plus overhead) of $85/hour. If there are 100 employees in a company, and 30 of these are involved in this way, cost due to inefficiencies is 0.75 x 85 x 30 = $1912.5 PER WEEK x 48 Weeks = $ 91,800 PER YEAR Using the above examples, if all these issues occur once in a year - Stock Efficiency Savings = $45,000 One mistake in ordering = $22,930 Shipping wrong spares item ONCE per year = $3992.50 8

Company does not correct time wastage searching for information = $91,800 In a company that employs 100 people with a turnover of $11.3 Million, of which spares/repairs contract business is 10%, and the company achieves 8% profit ($904,000) The cumulative cost of example errors is $163,722.50 Loss of 10% of service revenue is $113,000 Then these losses together eliminate 30% of the profit for the year. If the cost of connecting Engineering and ERP is around the following ball park figure Cost of Integration software and consultancy $75,000 - $90,000 Cost of customer engineer downtime during implementation $50,000 Cost of retraining staff across departments $25,000 Then looking at projected business costs on previous slide, this is recovered in first year, and those savings are year on year. ERP Integration Methodologies Now that we have seen a sample calculation of the costs of working with disconnected data, what are the options for integrating Engineering and ERP? There are several, and they range from facilities already in the applications (and so are f.o.c.) to complex deep rooted integrations, where significant cost can be required to attain the required level of integration. Each option will be discussed here with benefits and drawbacks. Direct Exchange from CAD Most CAD applications have the ability to export BOMs to other formats such as MS-Excel Benefits : Drawbacks: Simple for designers to use, is in their daily CAD application. Exports As Designed CAD Data (Parts List). MS-Excel is used by almost everyone today. Only shows CAD data, manually have to type other non-drawn objects as new lines, possibility of errors in names/descriptions. No release process as part of approvals workflow. No ability to read manufacturing data from other sources, such as ERP. A one-way push only. Exported data is usually just a flat unstructured parts list. 9

Direct Exchange from Data Management Autodesk Data Management Applications can export and import data in standard formats such as XML, CSV, TDL. Benefits : Drawbacks: Simple for engineers to use, exports BOM structures. Easy to add non-drawn data to publish more detailed BOMs and Items. BOMs and Items are versioned, with ability to compare BOM Revisions. ERP data can be Imported to fill standard item libraries. Other property information can be stored against Items. Non-CAD Users can view documentation associated with Items and BOMs. Only carries BOM structure and Item property information. Is a manual push-pull methodology. Neutral format can be edited opening up possibility of tweaking data before import into other business system. Specific Integration Packages - Out Of The Box Specific custom applications can be developed to provide deeper integration with other business systems; they can take a certain application and develop a standard integration for it. Benefits : Drawbacks: Simple for engineers to use, can be automated on item release. Can take across not only meta-data, but associated documents for viewing. Provides clear functionality set at fixed price. Customer must make a clear decision about which business system is driving the other. Custom code needs to be regularly updated for new releases of software (high maintenance). New code needs to be developed for each new application. Making an out of the box solution cannot meet requirements of every customer. Specific Integration Packages Per Customer Requirement Specific custom applications can be developed to provide deeper integration with other business systems, but the needs are specific for an individual customer, so a custom application integration needs to be developed. Benefits : Drawbacks: Simple for engineers to use, can be automated on item release. Can take across not only meta-data, but associated documents for viewing. Process can be fully automated to update other business system when one data set is changed. Customer Specific requirements can be addressed. Customer must make a clear decision about which business system is driving the other. Custom code need to be regularly updated for new releases of software (high maintenance). 10

Integration Brokers Is expensive to develop since it s bespoke for each customer. Most modern Business Systems use an independent Integration Broker Technology to exchange data between systems. (Examples are BizTalk and WebSphere). Benefits : Drawbacks: Standard technology that allows data exchange with almost any other business system. Rework required for software upgrades is minimal, since standard technologies are used. Allows not only what can be exchanged, but when (rules based). Cost of additional Broker server and software. Needs specialist knowledge for configuration. Still needs custom applications for exchange of documents between systems. Collaborative Integrations In this scenario, the corporate management system is the master repository for all data, but work in progress projects can be passed to an engineering data management system as part of a workflow process. Benefits : Drawbacks: Actions on one application will be dynamically updated in the other. It s clear which application is master and which is slave. Users can continue to work in their familiar applications, no need to learn new. Costly to implement and takes a lot of management. 11

More complex, needs more investigation of requirements. Only a realistic solution for major applications such as SAP and Teamcenter. Really does need specialist knowledge full time. SUMMARY OF INTEGRATION METHODOLOGIES Lots of possibilities depending upon needs. Simple starter scenarios are possible. Benefits are easily calculated, and repeatable year-on-year. Mostly uses standard technologies. This brings to a close the student notes for the presentation MA33-2, we hope that you have found both these and the presentation useful. The speaker can be contacted by email at : stephen.maloney@autodesk.com 12