Better control of enterprise

performance through BOM

Management
October 2013

BOM Excellence Video

Click on image to view video in slideshow mode

Copyright 2013 Accenture All rights
reserved.

What is a BOM?
There is a common thread that ties the entire product lifecycle from
New Product Introduction through to Product Support, it is called a
BOM Bill of Material
What is a BOM?
The BOM contains the historical,
current and planned product
information that supports the design,
planning, production, after market
service and the ultimate disposal of a
product

Copyright 2013 Accenture All rights

reserved.

What are the product

components
(parts, model #, specifications)

How was the product designed

(technical, functional design)

How was the product built

Who participated in Product

Decisions

Why & when decisions were

made (records
3 of change)

Business / Client Challenges

How do we deliver high quality products faster
in a global marketplace everywhere real time?
How can we design
products for a global
marketplace?

How do we reduce cost

by reusing knowledge?

How can we support multiple global & domestic

manufacturing sites?
How do we ensure process discipline when
designing, manufacturing and servicing products?
How do we get product data everywhere real time?

Copyright 2013 Accenture All rights

reserved.

So What do Clients Need to Get Right?

The BOM not only is the common thread throughout the product
lifecycle, it is evolutionary and it is the item that changes most
frequently before a product is launched to market
Hence, it is critical that clients have BOM Excellence; a
structured, end-to-end discipline that integrates the 4 key
functions through product design
Engineering
Manufacturing
Marketing/Sales
Service

Copyright 2013 Accenture All rights

reserved.

Accenture Has Proven Methodology

Accenture has proven methodology and tools to
Develop a unique blueprint
and roadmap to BOM
Excellence

Manage and implement

BOM Excellence, with
Organization Change
Management as the
critical component
running end to end

Copyright 2013 Accenture All rights

reserved.

Diagnostic
1

2
3
4

Task Name

Project Start

PLM Diagnost ic

Durati on
0 days

Start
Mon 7/25/11

Finish

Mon 7/25/11

Mobilization & Target Value

11 days

Mon 7/25/11

Mon 8/8/11

Diagnose & Explore

47 days

Mon 8/1/11

Tue 10/4/11

18

Submit data request

19

Conduct i nter views

Compile i ssues list

21

1 day

Construct cl ient PLM capabi li ty model

22

Assess capability maturi ty, define targets

23

Document As-is PLM pr ocesses

Mon 8/1/11 4

Mon 8/8/11

Fri 8/26/11 16

5 days

Mon 8/29/11

Fri 9/2/11 19

5 days

Mon 8/29/11

5 days

Mon 9/5/11

10 days

Mon 8/29/11

24

Perform technolog y appl icati on assessments

10 days

Mon 8/29/11

Perform skills/org assessments

10 days

Mon 8/29/11

26

Deter mine capabi ltiy gaps

5 days

27

Deter mine process gaps and inefficiencies

Deter mine technology g aps and i nefficiencies

29

Deter mine skil ls/or g gaps and ineffici encies

30

Defi ne issue/gaps/opportunity themes or groupi ngs

31

Deter mine ini tial To-Be process changes

32

Defi ne ini ti al tech application disposition

Mon 9/12/11

5 days

Mon 9/12/11

5 days

Mon 9/12/11

5 days

Mon 9/12/11

Fri 9/9/11 19,18

Fri 9/9/11 19,18
Fri 9/16/11 19,18,22
Fri 9/16/11 23
Fri 9/16/11 24
Fri 9/16/11 25

5 days

Mon 9/19/11
Mon 9/19/11

Fri 9/30/11 27

Mon 9/19/11

Wed 9/21/11 28

Fri 9/23/11 27,28,29

33

Deter mine ini tial org and skil l requirements

7 days

Mon 9/19/11

Tue 9/27/11 29

34

Compare findings to cor por ate strateg y and goal s

2 days

Mon 10/3/11

Tue 10/4/11 31,32,33

35
36
37

Prioritize issues/g aps/opportuni ti es

Peform r oot cause anal ysis

3 days
5 days

Blueprint

33 days

38

Finalize To- Be pr ocess models

5 days

39

Finalize To- Be appl icati on archi tecture

5 days

40

Mon 9/26/11
Mon 9/26/11
Wed 10/5/11
Wed 10/5/11
Wed 10/5/11

Deter mine ini tial set of intiati ves

7 days

Wed 10/12/11

Deter mine hig h level quanti tative and qualitative benefits

5 days

43

Finalize To- Be or ganization and skill requi rements

W ed 10/5/11

5 days

41
42

3 days

Fri 10/21/11

Wed 9/28/11 30
Fri 9/30/11 30
Fri 11/18/11
Tue 10/11/11 31,34,35,36
Tue 10/11/11 32,34,35,36
Tue 10/11/11 33,34,35,36
Thu 10/20/11 38,39,40
Thu 10/27/11 41

Fri 10/28/11

Tue 11/1/11 42

44

Deter mine ini tiative dependencies

2 days

Fri 10/21/11

Mon 10/24/11 41

45

Develop initi al proj ect/pr ograms and roadmap

3 days

Tue 10/25/11

Thu 10/27/11 44

46

Val idate and prior itize i nitiati ves

Develop detai led supporti ng business cases for high priori ty15
projects
days Wed 10/19/11

47

Val idate projects, business cases, and r oadmap with stakeholder

5 days
s

48

Summarize fi nding s and recommendations

49

Draft plan of next steps to move toward impl ementation

Jun '11
Jul ' 11
Aug ' 11
Sep ' 11
Oct '11
Nov ' 11
Dec '11
Jan '12
Feb '12
15 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 4 11 18 25 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29 5 12 19
7/25

Fri 9/2/11 19
Fri 9/9/11 21
Fri 9/9/11 19,18

10 days
3 days

Process
Improvements

Fri 11/18/11

Mon 8/1/11

15 days

25

28

Predecessors
May '11

Mon 7/25/11

85 days

3
17

20

Roadmap

Program
Management
ID

Maturity
Model

Tue 11/8/11 43FF+5 days,45FF+5 days,30

Wed 11/9/11

Tue 11/15/11 46

2 days

Wed 11/16/11

Thu 11/17/11 47

1 day

Fri 11/18/11

Fri 11/18/11 48

Deployment

Data Classification

OCM Organizational Change

Key Levers
There are a set of defined value drivers that can be pushed and pulled
that need to be analyzed corporate wide to achieve BOM Excellence
If this is the
desired
outcome

It is
characterized
by these

Which is attributed by

Order Configuration Management

Improve
Product
Velocity

BOM
Excellence

Then these are value drivers

to consider
Time to respond to Sales/Marketing
product decisions
Engineering design cycle time

Aligned End to End BOM

Procurement planning cycle time

Efficient Change Management

Manufacturing cycle efficiency

New product development

Product development cost

Resource Utilization

Resource Efficiency
Reusability and Carry-Over Content

Reduce
Product Cost

Cross-Functional Collaboration

Simplified Applications and Systems

Inventory levels of Assemblies,

Components,
raw material and others
Scrap, Rework, Expediting and Obsolete
Material costs
Direct material spend

Improve
Product
Quality
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reserved.

# of changes during the product lifecycle

Product Reliability

# of configuration errors related to

Product Support

Key Benefits
Better visibility and
control of product cost

Better manufacturing
and supply chain
performance

Reduced inventory and

after sales support

An example of a success story

1 to 3%

2 to 8%

3 to 5%

increase in Revenue ($50M

$100M increase in Revenue)

decrease in Operating costs

($75M $150M in savings)

decrease in Inventory
Carrying Costs ($130M
$230M savings)

Labor Efficiencies of

2 5%

1 2%

5 10%

5 10%

Engineering

Procurement

Planning and
Configuration

Manufacturing
Engineering

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reserved.

10
15%
Product
Support

Who to Sell to?

Key Decision Makers

Users/Influencers

COO / Division SVP

NPI Program
Management

VP of Engineering
NPI

Program Manager

VP of Supply
Management

Procurement Engineer

VP Operations

Service Engineer

Chief Procurement
Officer (CPO)

Component
Engineering

CIO

IT

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reserved.

Design Engineer

Case Study
Client Profile

Approach

The client is a leading manufacturer of construction and mining

equipments and diesel and natural gas engines. It operates across
the world with facilities in more than 500 locations and 100,000
employees serving customers in more than 180 countries with
more than 300 products resulting in revenues of $60B in 2011

Implemented BOM Management and Excellence employing leading

practices and an end-to-end portfolio of assets, from vision through
implementation.

Client Issue
Products shipped cannot be linked to what was designed or
planned
Lack of product structure integration across Engineering /
Manufacturing / Service result in multiple systems of record, and
the product definition diverges across functions
Disconnected BOMs negatively impact New Product Introduction
cycle times, release and engineering change management
Adherence to process discipline is made more difficult
Current processes do not support Out-Of-The-Box Software
capabilities
Lack of integration with eBOMs lead to manual creation and
update of mBOMs (engineering changes), resulting in errors
As built products deviate from as designed, leading to service
parts incompatibilities
Lack of functional synchronization around product content leads
quality and warranty impact

Expected Outcomes

Reduce Time to Market: Estimated savings of $20 mil due to

streamlined processes and reduced hardware/software
complexities after Release 1.
Realign Cost Structure: Expected earnings of $2.3bn in NPV over 7
years, based on increased revenue, reduced COGS, lower SG&A
and optimized working capital
Improved capability to leverage global footprint: The client would
be able to adopt a strategy of design anywhere, build anywhere
by enabling 2020 vision to increase revenues from $60 B to $100
Copyright
2013 Accenture All rights
B

reserved.

Project Management
Delivering an on-time and on-budget project
Effectively manage risk across complex PLM work elements
Process Improvements
Providing bill of material functional expertise
Co-leading the functional business process designs
Ensure adoption and performance of new business processes
Data Consolidation / Classification
Conversion, Creation, Enhancement and validation of required
BOM data
Deployment
Driving the development and build efforts
Contributing to the deployment efforts, including Organizational
Change Management components
Pace: Leveraging the Accenture PLM Accelerator for leading
practices specific to PLM implementations. Utilizing the Accentures
Delivery Methodology to develop and execute to a detailed and
proven plan.
Certainty: Leveraging Accentures experience and market presence
to identify appropriate market relevant BOM management solutions
and to quantify realizable value potential
Strategic Agility: Helping the client to create structured and
industrialized NPD processes and new roles to own and direct them,
reducing complexity and enabling flawless change execution.

10