Global Manufacturing and Consumption

Another significant shift in the manufacturing industry is that product development and production have been widely distributed. It’s not a surprise to find “Designed by Apple in California. Assembled in China” on the back of an iPod owned by a 16-year-old boy in Spain. Production offshoring and global marketing give companies opportunities to cut costs and to reach more consumers, but these activities also require more collaboration with up- and down-stream partners. Product data transparency between a manufacturer and its suppliers (or in other words, consistent BOM information throughout its supply chain) becomes an important issue when companies want less expensive production resources but still need to keep up with the pace of shortening time-to-market. In an old-fashioned way, an engineering change that reflects material changes may reach suppliers in days. Not to say that suppliers may also have a few layers of suppliers.

Consistent BOM throughout the whole supply chain relies on integration. First of all, internal integration ties all the information systems running within an organization (PDM/PLM, ERP, SCM, etc.) that rely on accurate BOM data. This integration allows companies to have effective and consistent product information any time it is needed. Secondly, external integration connects all parties on the value chain. Based on electronic data interchange (EDI) or other means of data exchange, external integration allows enterprises to have a common view of the product structure and other critical data, so companies can collaborate across organizational borders.