Digital Supply Chain MBOM MRP

Digital Supply Chain MRP MBOM

MBOM as the steering wheel of the digital supply chain and the comeback of MRP 2. Sounds interesting? Read what Prof. Jörg Fischer thinks about it.
LinkedIn post 1

Digital Supply Chain, the comeback of Manufacturing Resources Planning MRP 2 - and why (exclusive) stocks are sexy again

Stocks = waste = muda. Muda must be avoided. Is that still up to date? 🤔

Muda, the credo of lean management, demonizes inventories. Now Littel's law has been added to the mix. I remember when Prof. Arnold from Karlsruhe Institute of Technology (KIT) even equated lead time and inventories in a logistics lecture on the basis of Little's law.

Well, I think that is no longer up to date. But let's start from the beginning: First of all, you have to differentiate between inventories that drive throughput times and inventories that do not. How do you do that? Quite simply: Stocks at the sheet level of your M(RP)-BOM do not drive throughput time! Do you have any questions? I'll be happy to answer them in the comments. 

Let's get to the real point. Why are some stocks sexy (just like in my picture 😏)? Since corona and the resulting fragile supply chains, this realization has been gaining momentum. When supply chains no longer flow, but instead falter more often, we have to react.

The answers include:

👉 Exclusive Stocks

This means that we sort the dependent requirements according to availability classes - a fundamental extension of previous ABC/XYZ categorization approaches.

👉 Alternatives and local sourcing

This means considering alternative parts and manufacturing processes that are also available in local markets in particular.

This can be controlled from the (ERP-related) PLM. What is important here is that Paradigm 1 (Object Type Cascade) of ERP-related PLM to consider. ERP PLM Supply Chain.

We at RIM have developed a series of concepts that help you to categorize your inventories accordingly based on AI (RIM availability classes) and to align the product structures and control, i.e. Manufacturing Resources Planning (MRP2), of the digital supply chain accordingly.

Well, and the post picture? - Fun fact: This is how I explain the problem of stocks in more detail in the lecture. In the picture, we see a WG that has invested in exclusive stocks. They tie up capital and liquidity (which can be seen) and take up storage space, which also costs money. Well, since beer consumption in student flatshares often shows clear Z-behavior, it is an interesting logistical approach, as shown in the picture - assuming a long delivery time.

MBOM vs MRPBOM
LinkedIn post 2

M-BOM vs. M(RP)-BOM - Let's resolve the confusion.

One of the increasingly visible misunderstandings in the industry is the confusion between M-BOM and M(RP)-BOM.

Let's clarify that:

M-BOM

The MBOM provides information. You can see it like a teacher. It is set up to define assembly drawings and assembly sequences, for example. It has its origins in the digital factory, more specifically in Body in White planning, where it was necessary to provide 3D geometry for offline simulation. I was there myself, for example, as it slowly migrated from Tecnomatix Process Planner to Teamcenter.

M(RP)-BOM

The M(RP)-BOM controls, indeed commands, the supply chain. You can see it as a general. It has its origin in the ERP. The MRP run runs through it! The control of the supply chain depends on its structure and attribution, as does the ability to carry out post-calculation.

Well, the two sometimes have similar structural semantics, especially if you limit yourself to one work.

Due to the current economic situation, there is now a need to massively improve the ability to control the supply chain. This has a structural impact on the M(RP)-BOM and its semantics will move much further away from the MBOM than before!

We at RIM are currently experiencing how attempts to link the MBOM in PLM directly with the M(RP)-BOM are failing. The situation is even worse when this approach is implemented, but the performance of the supply chain gradually deteriorates as a result and those involved wonder why this is the case.

Where do you stand with this topic in your projects?

If you are not sure - then we have our RIM M(RP)-BOM Health Check for you. We can tell you precisely whether your M(RP)-BOM has the ability to control your supply chain effectively and whether it is even possible to directly link your MBOM in PLM with the M(RP)-BOM.

MBOM DSC
LinkedIn post 3

Did you know? The MBOM is the Steering Wheel of the Digital Supply Chain!

I believe that many people working in PLM today do not have a complete understanding of what the MBOM's role actually is.

Well, at least that's how I felt when I was still very PLM centric and didn't deal much with the downstream processes in ERP.

At the time, I believed that the MBOM was just the EBOM, only rearranged. So in assembly order. Okay, maybe different for one movement or another, but otherwise?

This view is not wrong in itself. However, it has a massive blind spot!

The MBOM has a much more important task! It is the steering wheel for the digital supply chain!!! 

This aspect has become particularly clear in recent times and I am currently experiencing it more and more frequently and clearly in advisory situations.

Why is this the case? Why is supply chain management capability and therefore MBOM so important?

Today, companies are faced with issues such as reacting quickly to individual customer requirements, building resilient supply chains, sustainability, coping with ever stricter regional regulations and much more.

The central enabler of these topics is the flexible controllability of the digital supply chain in the plant network!

The control is realized via suitable structuring, the control of disposition levels, the short-term exchange of material (precisely controlled double sourcing) in the M(RP)-Bom as well as the attribution of BOM items and material attribution.

Short reaction times are the key here. The changes must be implemented precisely via the plant network for each customer order and often at short notice just before the production order is instantiated and released.

From a sustainability perspective, it is necessary, for example, to control supply chain routes that currently have a good CO2 footprint. From the perspective of regional regulations, it must be possible to control whether sourcing is currently permitted for this region.

As you can see, the aspect of MBOM or M(RP)-BOM as the steering wheel of the supply chain is coming to the fore.

It is important to understand that in the classic PLM processes where MBOM is often located in many discussions today, the necessary information, knowledge and responsibility for the supply chain are not given.

One more reason to manage MBOM close to the ERP or supply chain.

I am increasingly surprised why the big ERP vendors are obviously overlooking this topic and not actively placing it. It's a bit like providing a Formula 1 car and leaving the steering wheel in the box.

What do you think?

And if you want to know exactly how you can manage your supply chain with MBOM, get in touch with us at RIM today 👉 Contact STZ-RIM now - here are your options

#SupplyChainManagement #DigitalTransformation #Sustainability #PLM #MBOM #Manufacturing #BusinessStrategy #Innovation

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