[Editor’s note: The following is a summary of the 3 Tips for Effective Product Revision Control and Communication, which we encourage you to download in full here (.pdf format).]
This whitepaper tells the story of Denali, a quick to react company that stumbled and fell because of its lax product revision control system and its poor communications both internally and externally with suppliers and contract manufacturers (CM). This paper also describes how a collaborative bill of materials (BOM) and change management system like Arena could have saved this company from an expensive manufacturing disaster.
With less than two months to go before delivery of their product, Denali’s lead manufacturing engineer received an e-mail from their contract manufacturer in China saying that he could not build the new product because the low-power processor didn’t fit into the circuit board. Further, the contract manufacturer reported that the processor on the bill of material (BOM) that his purchasing agent had received from the purchasing manager at Denali did not match the processor on the BOM the manufacturing engineer at the contract manufacturer (CM) had received from Denali’s manufacturing engineer.
Since there had not been enough time to test alternative processors, the CM in China was instructed to call around to see if the processors were available locally while Denali’s purchasing manager searched for chips in the US. The report back from the CM was that the right chips in China were on an 8- to 10-week back order. That was better than the 12-week lead-time in the US, but still beyond the 8-week window to deliver 200 units of the product. Denali would not be able to meet its contractual obligations.
At a post crisis meeting, it was discovered that the contract manufacturer’s purchasing manager, worried about completing the order in time, had contacted Denali’s purchasing manager seeking a copy of the bill of material so that he could start ordering long lead-time parts, such as the low-power processor. What Denali’s purchasing manager did not know was that what he thought was the master BOM on his computer actually was an earlier design revision that listed a rejected processor. The electrical engineer had updated the master BOM on the server with the approved processor, but he had neglected to send an email to the purchasing manager notifying him of the revised processor selection. Having heard nothing about any changes, the purchasing manager assumed he had the latest revision.
Denali’s investigation into the disaster determined that its processes had three main points of failure:
Too many bills of materials (BOMs) in too many locations
From electrical engineering to manufacturing and purchasing on out to its contract manufacturers, Denali had multiple BOMs floating about on servers, desktops, and in email causing confusion as to which one represented the most up to date revision.
No process for change notifications existed
Design changes went unnoticed and were not formally communicated to the right people.
Communication channels with the contract manufacturer were unclear
Both the purchasing manager and manufacturing engineer at Denali emailed BOMs to the contract manufacturer. This lack of clarity over who communicated the master BOM caused confusion at the CM that led to the wrong processor being ordered.
As tempting as it might be to place the entire blame for the missed introduction of the new product on the purchasing managers at Denali and the CM, they were just the most obvious symptoms of a larger systematic failure at Denali. Too many BOMs in too many locations, informal product revision control, and unclear communications internally and externally with their contract manufacturer practically pre-ordained the confusion that resulted in Denali’s manufacturing disaster.
Companies such as Denali that rely on shared network servers to maintain their bills of materials (BOMs) are on the right track by recognizing that a single location for their BOM is the foundation of a successful product revision control strategy. However, by creating a process that is dependent upon error-prone humans at every step, they risk and often reap disaster.
Denali’s product revision process made it too easy for its purchasing manager to have a copy of the BOM on his local desktop. Consequently, even though Denali’s electrical engineer had updated the master BOM with a new low-power processor that was the key to the redesigned product, the purchasing manager had failed to check for revised product information. Convinced that he had the latest revision of the BOM in his possession, the purchasing manager sent it off to the CM, inadvertently setting off a series of events that led to disaster.
Arena eliminates this problem by enabling a controlled product revision strategy. Arena provides a single centralized repository for product data that is web-accessible at any time to any employee, partner or supplier you authorize. All departments funnel their data to one location, so every user has access to everyone’s contributions to your project.
Arena also tracks changes and impending changes automatically. Once a change has been approved by decision makers, Arena incorporates it into a new revision of your BOM instantly. This, in turn, means that your data is always up to date as well as available to everyone. For a company such as Denali, this would have meant that its purchasing manager and the CM’s purchasing manager would have known the status of the low-power processor — approved or under review — and would have easily avoided ordering the incorrect component.
Redline BOM view in Arena - Compares 2 revisions and displays components that have been added or subtracted,
quantities, phases, part names and part numbers which have been modified. Changes in files can also be shown.
While controlling revisions to its BOMs would have helped Denali avoid its disaster, the company’s process still left it vulnerable to approved changes going unnoticed or left unimplemented as well as vital details on impending changes being missed by affected stakeholders. Arena eliminates this possibility by providing a robust change notification methodology as a standard component of its revision control system.
Arena’s automatic notification system establishes a clear communication channel and an automatic process for delivering information on changes to all key members of your team and supply chain partners. Denali’s purchasing manager would have been automatically notified when the electrical engineer’s new revision of the BOM was available rather than assuming no changes had been made.
Arena offers layers of protection against ordering the wrong part or making a decision based on out of date data. You can impose varying levels of control depending upon where in the process your work is. During early design stages engineers can control the revisions and others can be notified when a new revision is available and ready for prototyping.
For Denali, the benefits of this process would have been two-fold. First, its purchasing manager would have been in the change notification loop, so he would have known the progress of the electrical engineer’s work on a new processor for the EveryPath. Secondly, his communications with the contract manfuacturer’s purchasing manager would have clearly indicated the status of the new processor, saving everyone time, effort, and money.
That Denali’s purchasing manger and manufacturing engineer sent conflicting copies of the BOM to their contract manufacturer only added confusion to the collapse of Denali’s manufacturing process. Arena eliminates such muddled communications by creating a single communication channel between you and your staff as well as between you and your CMs and supply chain partners.
Arena provides a single point of entry into your data so that anyone in any department in your company and any access-approved third parties, such as your contract manufacturers, knows where the latest information on your product resides. Even for Denali with two people communicating with two counterparts at the CM, the correct data, rather than conflicting data, would have been provided to the CM.
Since Arena also allows you to incorporate your CMs and supply chain partners into your automatic change notifications, you know that they will always be working with your latest product revisions. You can even include them in your change review boards and prompt them for sign-offs. Further, they can use Arena to inform you that your changes have been implemented and provide the requisite documentation to prove it.
Change view in Arena - Include internal and external partners in your change notification process,
subscribe them to be notified of a change and/or as part of the decision board.
When Denali took on a new contract and design to its product, it was confident that it had the know-how to make good on its word. But no matter how quickly they were able to meet the design and engineering challenges of the contract, their error-prone product revision process and disorganized communications channels were not up to the strain of a quick roll-out of a redesigned product.
With Arena, you can standardize and control your bills of materials (BOMs) and ensure that the details of vital product changes among your staff, contract manufacturers, and other supply chain partners are clearly and consistently communicated to the right people at the right time.
A company like Denali may have thought it was too small to afford, set up, and maintain a collaborative bill of materials and change management system like Arena. The IT resources, software costs, and licensing fees of a software ownership model can be quite intimidating. But Arena eliminates those concerns by delivering software as a service, making it easy and affordable for small to mid-size companies to get control of their data, BOMs, and engineering and manufacturing communications.
©2012 Arena Solutions, Inc. Arena and Arena Solutions are trademarks of Arena Solutions, Inc., Reg. U.S. Pat. & Tm. Off. All rights reserved. Other product and company names are the property of their respective holders. Contact Arena at questions@arenasolutions.com for permission to repost or syndicate this content.
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