How Nutanix Reduced BOM Errors to Absolute Zero

About the Company

Nutanix creates a virtualized platform for public and private cloud infrastructure. Their solutions unify private, public, and distributed clouds, and empower IT to deliver applications and data that power their businesses.

Nutanix solutions are built on the industry’s most popular hyperconverged infrastructure (HCI) technology—a complete, 100% software-defined stack that integrates compute, virtualization, storage, networking, and security to power any application, at any scale.

AT A GLANCE

SYSTEM USED

Arena PLM

BOTTOM-LINE IMPACT

Reduced ECOs from days to hours
Resulted in “zero wrong BOMs”
Shortened product-concept-to-cash cycle by 50%

KEY BENEFITS

Streamlined design processes
Reduced scrap and product errors
Accelerated time to market

BUSINESS CHALLENGES

Nutanix’s operations team is responsible for fulﬁllment, logistics, quality, reliability, new product introduction, and launching product into volume production. Additionally, the company outsources all its manufacturing needs. “We work with many suppliers including contract manufacturers, distributors, and key technology partners,” said Nutanix’s Chief Operating Officer (COO). “We also use a platform approach to product design and a conﬁgure-to-order (CTO) process to reduce SKU (stock keeping unit) proliferation and the need for additional engineering.”

The number and frequency of changes inherent in the product development activity, as well as data sharing among partners, had become problematic. Unfortunately, the team was stuck relying on Excel spreadsheets and email to address these manufacturing challenges. “It’s embarrassing to admit, but we had a number of instances where the suppliers built the wrong version of the product,” added Nutanix’s COO. “It was ‘rev A’ all right, but the ‘wrong’ rev A.”

Issues with rework, which included extra procurement, build, and test cycles, also increased delays and were becoming a signiﬁcant impediment to the company’s total time to market (TTM) objective.

“Change management was a nightmare,” stated the COO. “With several people making changes and suggestions to uncontrolled documents, there were multiple revisions of the same bill of materials (BOM) ﬂying around the ether. No one had any trust in the data, so many local copies abounded based on the ‘mine is right’ premise.”

Nutanix’s priority was ﬁnding a solution to manage BOM integrity in order to reduce shipping delays and product errors. The COO emphasized, “A wrong product number in your BOM can completely blow your quarter and make for a very unpleasant conversation with your CEO and the Board.”

Blue quote mark

We get terrific feedback from the give and take of the review process. Indeed, partners have provided feedback that helped us avoid making unnecessary, confusing, or costly changes.

—Chief Operating Officer, Nutanix

THE SOLUTION

Nutanix needed a PLM solution to address their BOM management problems and allow them to scale with a positive ROI and improved customer experience. The solution also had to be a “ﬁnancially responsible investment,” their COO continued, “At the end of the day, we were looking for a solution that maximizes the benefit to the organization with a relatively modest investment.”

The pay-per-use model is affordable with no large initial cash outlays.
Easy to use with no need for costly IT or software administration overhead to manage or proctor the tool.
A cloud-based always-on system that eliminates any need for on-premises client/server solution.
Integrates easily with their existing enterprise resource planning (ERP) system, NetSuite, eliminating hours of tedious, error-prone clerical work.
Provides cost visibility to engineering, allowing them to consider design/cost tradeoffs.
Controlled environment for effective collaboration with suppliers.
Scales with the global business. They don’t want to revisit this decision every year.

Another reason Nutanix’s COO went with Arena PLM was because he had been “favorably impressed by the continued evolution and improvement of each software release.” He added, “Arena really listens to customers … don’t underestimate this trait in a partner.”

RESULTS

With Arena, Nutanix realized several key beneﬁts, including shortening the product-concept-to-cash cycle on second-generation product by almost 50%. “This has had a positive, material impact to the business by reducing our burn rate and reliance on external cash,” their COO mentioned.

Arena PLM reduced engineering change order cycle (ECO) approvals from days to hours. “ECO reviews are now done by teams of impacted stakeholders using the same data,” added the COO. “We get terriﬁc feedback from the give and take of the review process. Partners have provided feedback that helped us avoid making unnecessary, confusing, or costly changes.”

Arena has improved cost visibility, allowing Nutanix’s engineering team to take a critical look at BOM cost tradeoffs. This has almost by itself promoted part reuse and standardization in their platforms—a key to shortening time to market. Additional benefits include:

Suppliers now access the same BOM and revision, and Nutanix has had zero wrong BOMs built since the system was implemented. Conﬁguration integrity is assured.
Interface is intuitive, understandable, and readily customizable. Common tasks like ECO creation and routing are quickly done.
Supply chain partners were up and using Arena in under ﬁve days.
The organization gains increased visibility and trust that accrues from a single, correct, centralized, real-time database.

Embracing Cloud-Native PLM for Global Collaboration and Efficient ERP Integration

Nutanix’s COO offered his advice to anyone looking for a new system. “Consider a cloud-based PLM solution that can be deployed quickly. You have a business to run and don’t need the distraction of a lengthy implementation cycle. In addition, choose a PLM solution that can easily interface with ERP systems to eliminate wasteful processes and improve employee morale and productivity.”