Service Labels for Repair Time Transparency

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Government mandated nutrition labels were critical to improving the transparency of information as to what is in food. We are proposing a similar level of transparency for serviceable items.

A Common Sense Proposal

After spending some time researching the topic of service-ability of parts, I learned that items are in more cases than not becoming less serviceable, and that most companies are hiding their reliability information (See these posts for background information)…

http://www.scmfocus.com/servicepartsplanning/2009/06/22/public-mtbf-statistics-for-hard-drives/

http://www.scmfocus.com/servicepartsplanning/2009/06/16/items-becoming-less-serviceable/

Clearly what is happening is many companies are not placing sufficient emphasis on serviceability. Other issues such as the marketability and consumer design priorities are increasingly taking precedence in design decisions. Furthermore, without some increase in transparency, this misallocation of resources and continuation of manufacturing items with little concern for service-ability will continue. Interestingly, in the environmental discussion, what is more often that not left out is how service-able products are. More serviceable products means longer product lifespans, less energy spend in making and transporting new products to stores and customers, and less space taken up in landfills.

Because of this I am proposing a labeling system for serviceable products. This label would state the following:

  1. The amount of time to initially setup an item
  2. The amount of time required to service an item through the item’s lifespan
  3. The total estimated time = item 1 + item 2 above

This could be printed as a large number with an identify-able label.This could be placed on all product packaging for items that require assembly or service. This label would not be on all products, but some likely candidates would be the following:

  • Computers and sub-components
  • Automotive Parts
  • Appliances
  • Housing items such as lights fans, furniture
  • Industrial products

How the Estimates Would be Generated

The estimation of the time required would come from a government testing body, this would be very similar to Underwriters Labratories (electric items come with a UL sticked in the US, and can not be sold without testing for safety). Testing would be performed by using laypeople — not experts in maintenance, to assemble and repair items. Sufficient quantity of people would be necessary to ensure that the times developed had statistical relevancy. The testers would only be provided with the manuals and instructional materials that came with the product, thus the test could also test the manufacturer’s instructional material.

What Would the Label Look Like

The label would be very simple. It should be large and easily recognizable and only needs to provide a three numbers. Here is a mockup.

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The Industry Response

Business would fight this initiative as being too expensive and invasive. However, there is nothing new here. Business has fought every single initiative that has improved consumer health and safety. Areas they have fought in the past include:

  • Safety belts
  • Air bags
  • Food labeling
  • Cigarette warnings
  • Drug testing

At the time these concepts were deemed by industry as unnecessary and onerous, however, now they are simply part of how we live. Who can now imagine a world without drug testing or seat belts? Progress is made by deciding what type of system is desirable within the larger context, and then pushing for it.

Where Will The Money Come From?

There is plenty of money is the US to do this. There are trillions of dollars to give to corrupt banks, so there is plenty of money for a small program like this. We have spent around a hundred billion to develop a military fighter jet that is so delicate and specialized, it can not even be used by the military in combat (the F-22), and is considered completely unnecessary by independent military experts. So there is certainly plenty of money to setup a lab to perform laboratory testing for service and maintenance. The expense of doing this would not be all that onerous. Products could be tested quickly, and would only have to be tested when a new product comes out or a change is made to an existing product by the manufacturer. If not every item could be tested, the most widely sold items could be tested, resulting in the highest common good per dollar spent.

How Would This Change Things?

The result would be a significant change in how companies build their products which would make them more durable, and easier to service. Right now companies are banking on the fact that consumers will never know the long term service time and costs of items. Therefore, new product development produces items that have great packaging, compete well on price, but have very little invested in them in terms of ease of assembly, maintenance and service. By placing the Service Label right on product packaging, and on product website, companies will no longer be able to ignore this issue, and consumers will be able to make informed decisions. It will punish companies that release poorly designed and difficult to service items onto the marketplace.

Service to Business

While this would be opposed by many OEMs and their suppliers, not every business would oppose this. Service organizations of business would be in favor of this government testing center as it would allow them to know the lifelong service effort of different items that they buy and maintain. Thus the government testing center would offer a service not only to consumers, but to businesses also.


Public MTBF Statistics for Hard Drives

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Can I Get An MTBF Please?

In one of my previous posts I described how unusual it was for companies to maintain causal information (such as aircraft landings, or installed base) that could be used to perform causal forecasting. After the hard drive in our iMac went out, and I was performing a search for the most reliable model to replace it with, we learned that MTBF (mean time between failure) figures are not available for even the most commonly purchased item by companies and by individuals.

Two pieces of data are necessary to perform causal forecasting, which is very important for service parts planning:

  1. MTBF of the causal value
  2. Installed base or other causal value

With just the MTBF consumers and organizations can make informed purchase decisions. However, with both these values companies can use service parts planning software to drive our forecast and stocking. (to read more about this, see these posts)

http://www.scmfocus.com/servicepartsplanning/2008/01/13/service-parts-and-mtbf-forecasting-2/

At this point, it is well-known that the official MTBF statistics published by vendors are unreliable and pure fantasy. Because there is no objective third-party that does drive comparisons across vendors and publishes the results, there is no reliable source for failure information (if anyone knowns of one please comment on this post). Although I know that companies, especially companies that purchase and deploy large numbers of disks may keep their own private statistics. When asked questions about this topic, vendor spokesperson move into a degree of doublespeak that would make Henry Kissinger green with envy.

Where Are The Failure Stats?

According to a white paper by Wiebetech – a drive enclosure maker Manufacturers are loath to give out real world statistical information.

All of the drive vendors do what they can to obscure any differences between their drives in terms of quality or MTBF. This allows them to compete on the basis of retail box design and marketing, as well as personal business to business relationships, which appears to be their preference. A quote from a recent article on this topic in PC World reinforces how much OEMs like to dance around the issue of reliability and failure. Several drive vendors declined to be interviewed.

“The conditions that surround true drive failures are complicated and require a detailed failure analysis to determine what the failure mechanisms were.”

..said a spokesperson for Seagate Technology in Scotts Valley, Calif., in an e-mail.

“It is important to not only understand the kind of drive being used, but the system or environment in which it was placed and its workload.”

This is hilarious. Apparently hard drives are the only thing for which MTBF statistics cannot be developed. Interestingly, companies like Google or any company with a large number of servers has this information because they have many drives and their drives fail as time passes, and as they are all in servers in the same building, the usage is similar, and therefore comparable.

http://www.pcworld.com/article/1295582/studyharddrivefailureratesmuchhigherthanmakers_estimate.html

Vendor Studies from Russia

One of the few vendor studies on the failure rate of hard drives was performed by a company in Russia. The results are documented at this article link.

http://www.tomshardware.com/reviews/hdd-reliability-storelab,2681-2.html

This image shows the most reliable drives with Hitachi leading all producers.


The drives I use most often are by Western Digital, but it is interesting that I can expect around 3.5 years of life from them, which squares with my experience after owning many Western Digital drives. This statement is of great interest, as it cautions against buying very high-capacity drives.

The remaining 41% exceeded 500 GB. Due to their construction and additional platters, these larger models are less durable, exhibiting an average lifespan of only 1.5 years. – Tom’s Hardware

The Costs of Publishing the Truth

It’s easy to publish positive information about vendors, but a huge headache to publish negative information. I know. I tested backup software several years ago and published my results online. My general finding was that PC backup software was very unreliable and difficult to use. Also that Norton Ghost, but in particular Acronis True Image never actually recovered a computer image properly after 10 attempts. After publishing this, I was contacted by a representative from Acronis who told us I did not know the software and that my findings were wrong. They then offered to send us the newest software,….which I took a lot of time to test…and which also failed. Publishing negative information like this, if you take advertising is even more difficult. This is one of the reason so few companies do it. CNET will publish on the different merits of products, but won’t touch the issue of reliability, nor will 98% of other publications. Consumer Reports is one of the few that does. While their publication is trailblazer in the area of reliability studies, have to have a legal team ready because they are often sued. However they do not publish at the level of detail of MTBF or other failure statistics. Something more is needed.

References

Article on how vendors refuse to provide real MTBF values.

http://www.eweek.com/c/a/Data-Storage/Hard-Disk-MTBF-Wheres-the-Reliable-Reliability-Data/

It turns that it is not just the disk that is important, but the configuration as well. If a person is using an external multidrive enclosure, it appears that mirroring is the best and most reliable. This is of course because of the 100% redundancy. Redundancy does come at a cost, but with the highest quality drives now costing roughly $75 — depending upon the make, redunancy is affordable. This also brings up the topic of whether all computers should have two drives internally, so that mirroring can be accomplished. Since the iMac and most laptops do not offer mirroring, they can be seen as less reliable designs than mirrored disk computers. Mac offers the ability to boot off of external disks, which does offer the capability of mirroring. This is only one reason why online data tends to be so much better maintained than off-line data stored personal computers and exernal disks. Almost all servers use a high degree of redunancy, which includes mirroring of disks. To read more about this see this post on Box.net.

http://infoknowledge.wordpress.com/2009/06/15/data-management-easier-on-the-web/

See the article here:

http://www.wiebetech.com/whitepapers/StorageEnclosureReliability.pdf


Items Becoming Less Serviceable


A Story of Un-Serviceability and the iMac

There is not much I own that I like better than our 24 inch iMac, but my sudden understanding of its basic un-serviceability has been a real disappointment. iMacs are not the only things getting less serviceable.

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What You Learn When Your iMac Goes Down

We recently had the hard drive in our iMac go out.

Drive Reliability

See this link for a very interesting article on drive reliability

http://www.pcworld.com/article/129558/studyharddrivefailureratesmuchhigherthanmakers_estimate.html

This article reinforces what we have experienced first hand — the MTBF numbers produced by drive manufacturers are false. Carnegie Mellon’s lack of differentiation among vendors in this study indicates their research was likely polluted by vendor pressure and or contributions.

What we learned is that iMacs are not designed to be serviced by users. The design of the iMac looks great, but has a very strange assembly that makes it even more difficult to work on than a laptop. The iMac has not screws or other fasteners on the case (except on the bottom for memory replacement). A hard drive is a major sub-component in a computer and tends to be one of the more problematic. It is something that not only should be designed to be easily replaced but should be designed to be swappable. As with media like CDs, there is no reason a door could not be added to any computer, and different hard drives could be added and removed to give the user maximum flexibility in booting to different drives. With a spare drive, this would mean that no computer could be brought down due to drive failure.

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“Swappable” drives have been used in servers for some time, and are now available for home disk centers (which allow for RAID configurations) such as the Acer model above.

However, while no personal computer actually makes it as easy as we think it should be, Apple has designed a case with no entry through the back, so the user or service technician must actually pull off the glass cover with a suction cup and remove the display (delicately) to expose display. Next the display must be removed to reveal the hard drive. Several specialized tools are required for the task. Waiting for tools to arrive from eBay, as well as the Apple Store’s $420 quote for the work, is why our iMac is sitting unused at the time of the writing of this article.

Long Term Trend

This is part of a long-term trend in consumer items to hide the fasteners in order to increase the “coolness factor.” This trend extends to a number of different categories. If one looks back to the cars of the 1930s, one can see that they were more modular, and the rivets, pins, screws and other fasteners were more apparent. What this meant was that cars were more serviceable.

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The Bentley Speed Six was a very serviceable car. The engine was easy to get to, the fenders were easily replaceable, and the exposed fasteners allowed the replacement of many parts by shade tree mechanics.

By the 1950s, almost all cars had moved to integrate the trunk and fenders into the body, and fasteners were no longer observable from the outside. This resulted in a smoother look, but also in a more complicated design and more expensive automobile to work on.

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The 1950s Cadillac Series 62 was representative of cars from this era, in that it had an integrated body and hidden fasteners. Bodywork on this type of car is more time-consuming and expensive and must be done by professionals. However, since then, cars have become far more complex and as a result less serviceable still.

Serviceability Trend

The long-term is to decrease the serviceability in items. While this may be good for company profits, it is actually bad for consumer and bad for the environment. The more difficult and expensive it is for items to be repaired, the more quickly they are simply replaced by new items. The problem is that companies do not seem to have an incentive to build long-lasting and easily serviced items. The finance area of the company seems to think it reduces sales of new items (which it does), and new product design and marketing seem to think it reduces the “coolness” factor of products. Marketing and finance have come to dominate US corporations, so it is no surprise that their values have become the values of American business. This is not going unnoticed. According to industrial designer Victor J. Papanek, the following holds.

That while American products once set industrial standards for quality, consumers of other nations now avoid them due to shoddy American workmanship, quick obsolescense and poor value.

Historical View

There is this common impression which is reinforced by advertising that this year’s model is better than last year’s, and that in general we are on a continual upward slope. This is not actually the case. There are many business practices and products that were “better” – better for the consumer and better for the environment — in the past. In addition to serviceability, many products were simply designed to last longer half a century ago. As an example, there is a lively market for classic toasters from the 1950s on eBay. These 50+ year old toaster still work, because they were built to last. The concept of a 50+ year old item is unheard of today.

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This 1950s SubBeam is still working, and adjusted for inflation, is probably selling for more on eBay than it did back when it was purchased in a store in the 1950s. Why can’t more items be built to last and be built to be serviceable?

Noticing Changes

I suppose the question to ask is what has changed? How did American business go from offering many durable and serviceable products to offering products designed to be thrown away? Secondly, how did both American and international consumers become habituated to this new consumption pattern? Thirdly, does anyone think that this trend can actually be reversed by “the market?” Actually, it would appear that on broader goals such as environmentalism (which the life-span of products are a contributing factor towards) that the market will drive product development in the opposite direction, towards planned obsolecense. People generally need to have a better understanding of the relationship between product service-ability and sustainability. It is difficult to see companies making a focus of product service-ability without more pressure from consumers. However, consumers have become so habituated to disposable products, that most don’t know where to begin to ask for this level of build quality.

References

One question I have is if purchasing specialized drives, such as surveillance drives — which are designed for high usage video applications are more reliable than normal consumer drives. Seagate makes a very price attractive model.

http://www.provantage.com/seagate-st3320410sv~7SEGS1UN.htm

This is an interesting article on planned obsolecense in hard drives. We quote from it below.

http://www.driveservice.com/bestwrst.htm

For a long time, I was a big supporter of IBM drives and recommended them at every turn, but now not so. They too have had enormous numbers of drives returned to them recently, and I am sure that is what spawned the Hitachi buyout. I have noticed over the last couple of years that manufacturers have stopped putting little mini in-line fuses on the electronics of the drives. I often asked myself why they were doing this, as the fuses could not cost 1/2 cent each. I have since found out! This is a little known fact that is not limited to hard drives alone unfortunately, but also incorporated into cars, electronics of all sorts, and everyday things that we the consumer use. This little known fact is called “built-in obsolescence”! This is a very little discussed problem in today’s society, but we all face it at some point or another.

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The is an excellent excerpt on this exact point in the book Waster Makers, published back in 1960. We have copied it below. This relates to deliberate changes that made items less serviceable.

Excerpt:

Beyond all these factors of quality debasement and by repairmen there were several objective factors about modern appliances that helped make them expensive to maintain and that helped increase the business volume of servicing agencies or replacement-parts manufacturers, and, in some cases, the manufacturers hoping to sell new replacement units. There were more things to go wrong. Those added luxury accessories that so delight copy writers were adding to the problems of products to break down. The rush to add extras on washing-machines in the form of cycle control, additive injectors, increased the number of things that can develop ailments. The Wall Street Journal wrote: “Parts and accessory dealers naturally are pleased with the added extras put on new cars.” They should be. I have two neighbors who bought station wagons in 1958. One bought a model with power steering, power brakes, automatic shifting, and power windows. The other—a curmudgeon type who doesn’t think that shifting gears and raising windows by hand are too much of a strain—bought a car without any of the extras. His years of ownership of the car have been relatively trouble-free. (And by spurring the extras he saved several hundred dollars at the outset.) The other neighbor who bought the car with all the extras moans that he got a “lemon.” His car, he states, has been laid up at the garage seven times, usually because of malfunctioning of the optional equipment. Replacement parts were costing more. The gizmoed motorcar was a good case in point. A creased fender that in earlier years could be straightened for a few dollars was now, with integral paneling” and high-styled sculpturing, likely to cost I $100 to correct. The wrap-around windshield was likely to last three to five times as much to replace as the unbent/ windshields that motorcars had before the fifties. Ailing parts were increasingly inaccessible. In their pre occupation with gadgetry and production short cuts, and perhaps obsolescence creation—manufacturers often gave little thought to the problem of repairing their products (or alternatively made them hard to repair.) Sales Management dominated and demanded that“products are not designed for service.”It was of steam iron that could be repaired only by breaking it apart and taking out the screws. Some toasters were riveted together such that a repairman had to spend nearly an hour just getting to the right part. This is to replace a fifteen-cent or a ten-cent spring. Product analysts at Consumers Union told me that air-conditioning units in automobiles were often cluttering up the engine compartment so badly that it took an hour or two to remove a rear spark plug. Built-in appliances—which were being hailed as the wave of the future had to be disengaged from the wall before repair work could begin. Many of these built-ins were simply standard.

Facilitating Repairs

Manufacturers often failed to provide in provide information that would facilitate repairs. Recently The Boston Globe protested that appliance manufacturers were getting so “cozy” with service manuals that customers seeking them got the impression they were “censored as if they contained obscene material.” The Electric Appliance Service News likewise expressed indignation on behalf of servicemen, or at least independent servicemen. It said, “Our mail is loaded with gripes daily from servicemen throughout the country lamenting their inability to obtain service manuals from certain manufacturers.” Often this coziness has sprung from the desire of the manufacturer to keep the repair business to itself and out f the hands of independents. The News charged that “some manufacturers do not make service manuals available to all independent repairmen and therefore it is almost impossible to make repairs easily and properly—and at a time-saving expense.

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This exerpt is from the book The Break Through Illusion and is related ho how R&D was changed to be less integrated and more specialized, and how service-ability as well as manufacturability were reduced.

R&D was also separated from other corporate activities such as product development and manufacturing. In 1925 Bell Labs was organizationally separated from Western Electric “to permit more effective specialization in research and development. “R&D now became the first step in a specialized assembly-line process of innovation. According to the historian George Wise: “At subsequent workstations long that assembly line, operations labeled applied research, invention, development, engineering, and marketing transform that scientific idea into an innovation.”

As this process moved along, projects and products would simply passed over the transom from R&D to product development, from product development to pilot production, and from pilot production to manufacturing Once a project was handed on, the receiving group vas confronted with a fait accompli, their freedom of operation constrained by earlier decisions. For example, engineers working on the body of a car might design it in such a way as to make proper placement of the engine and steering difficult. The engineers assigned to steering and motor development would then change the design based on their needs. By the end of this process would be expensive and difficult to manufacture. Typically, this yielded results that were expensive and frequently of low quality, for example, the Ford Pinto and the Chevrolet Vega, cars that were designed as lemons.“

Conclusion

The consequences of all this were both profound and disastrous. The connections between R&D and production were irrevocably severed. New ideas and inventions were stranded in a “twilight zone” between R&D and production. American industry went from a system in which innovation and production were closely linked to one in which it became increasingly difficult to produce the research labs’ developments economically. Some companies, like DuPont, responded to the growing gulf between the R&D and manufacturing by creating internal “venture” divisions designed to turn promising R&D into new products or in cases into new businesses. But few of these new venture visions proved successful. For example, none of DuPont’s major new internal ventures or spin-off companies amounted to much. The reason for this was basic: new venture divisions simply added another intermediate level to an already overblown and unwieldy R&D bureaucracy. Here again; large corporations showed that they were oblivious to the need for more fundamental kinds of restructuring.

Post-Script

It’s interesting how little changes. The article below describes how Apple decided to use glass on the back of the iPhone 4 in a decision prioritizes style over durability. I don’t know how many people care about the back of their phones, but I would venture to guess not much. Glass has no other property that you would want to put in the palm in that it is not a good insulator (so the heat will come through the back of the phone), and it is a low friction surface, meaning the phone will be more prone to slip out of one’s hand.


Another case of Apple choosing style over durability.

http://theappleblog.com/2010/06/30/the-iphone-4-missteps/

On a second very popular Apple product, much was written about how much better the iPad 2 was than the iPad 1. People were amazed by how thin it was and how it now had tapered edges which felt great in the hand. However, little was written about how this would affect serviceability. It turns out quite negatively. ZDNet disassembled the iPad and essentially recommended that users never try to open the iPad 2. They gave the product a serviceability score of 4 out of 10. In addition to reduced serviceability, the durability of the iPad 2 was reduced over the iPad 1, with a much greater likelihood of the glass cracking than in the iPad 1. If publications continue to lightly cover aspects of durability and serviceability, companies like Apple will have the incentive to continue to not emphasize these aspects in their design.

http://www.zdnet.com/blog/hardware/ipad-2-the-teardown/11846


How the Bill of Material, MTBF and the Product Structure All Tie Together

MTBF and the Product Structure

In our previous post we discussed the different vendors and services offered for reliability testing and prediction. One of the important issues with relation to MTBF management is the product structure. The product structure is the hierarchy (or at least at first glance) of materials that make up an overall product. This has different names depending upon the application. In SAP ECC it is referred to as a Material BOM or an Equipment BOM. In MCA it is referred to as the product indenture network. This survey conducted by Arena Solutions on this topic is quite interesting.

BOM vs. PLM Software

Being able to deal with the BOM in a flexible and distributed manner is increasingly a capability with what is referred to as PLM software. However, that is not right. BOM management is actually a subcategory of the broader term PLM or life-cycle management. Lifecycle management exists in a number of applications in supply chain, as the article below explains.

http://www.scmfocus.com/supplychainmasterdata/2010/10/how-distributed-plm-functionality-in-planning-systems-differs-from-bom-management/

Eric Larkin, Chief Technology Office at Arena Solutions, has some interesting things to say about PLM vs. BOM management.

 

Having powerful and collaborative BOM management software is important for many reasons that include improving the efficiency of product development and building quality into products as well as product costing for contract development. However, it is also important for service parts planning and MTBF. MTBF calculation integrates with the BOM.

ERP for BOM Management

There is increasing evidence that BOM management greatly benefits from specialized software. ERP software manages how the BOM relates to execution and planning, but does not tend to have advanced capabilities with regards to BOM management. (of course Oracle purchased Agile in 2007, a leader in PLM, however, software mergers often kill the aquired company’s innovation and product. Look how little Oracle has done with the PeopleSoft functionality). Here is an interesting quotes regarding ERP for PLM from Arena Solutions.

There is a misconception that Enterprise Resource Planning (ERP) systems can be used to manage all product information after design, including changes and communication. Unfortunately, even though the final production BOMs, the Item Master, and costing information are ultimately loaded into ERP systems, these systems do not have integral processes for ECOs or file management. Therefore they cannot be used to control BOM or item changes or manage associated files. Furthermore, as a tool primarily for internal groups, ERP systems cannot be used by external partners and suppliers to obtain product information. – http://www.arenasolutions.com/images/pdf/rc_docs/whitepapers/Arena_Turning_Great_Designs_Into_Great_Products_Whitepaper.pdf

ERP systems are not designed to be change control or file managementtools, and must be manually updated to reflect approved productchanges. To update and change product information across electrical andmechanical CAD tools and ERP systems, many companies employ spreadsheetsoftware, such as Microsoft® Excel, to manage part changes, SOPs andBOMs and to communicate them to project teams.” – http://www.arenasolutions.com/images/pdf/rc_docs/whitepapers/Arena_WP_Med_Device_Doc_Control.pdf

Reinforcing this statement is the poor track record of SAP PLM. We personally analyzed this “solution” several times only to find that it did not involve new software as much as simply leveraging the old structures with a few bells and whistles added in.

http://www.sap.com/solutions/business-suite/plm/index.epx

(in the past several years, SAP product management and marketing is increasingly following the Oracle model of presenting vapor or stretching pre-existing functionality to fit new solutions)

Spreadsheets for BOM Management

Exporting BOM information to a spreadsheet and managing it there for MTBF and other purposes is not a very competitive solution with the other alternatives that are present. In fact, even using an on line spreadsheet like Google Spreadsheets, while better than using Excel with its isolated files, is still not really capable of managing the complexity of BOMs. Furthermore with the rise of contract manufacturing and distributed product development and manufacturing, islands of data created by Excel are even less useful. Amazingly PLM software is still lightly implemented out in the marketplace.

Graphic from Arena Solutions – taken from an online webinar – not a formal study.

As far as ERP systems, while ERP systems have BOM functionality, it is not the functionality offered by Arena. Rather ERP BOM management was developed in order to support transaction processing. This is quite a bit different from what specialized BOM management software does.

Arena Solutions

Arena Solutions’ website is quite good and for anyone interested in PLM and BOM management we recommend a visit. It is of course selling a service, however it is also very educational and most the statements made on the site are reinforced by our consulting experiences.

http://www.arenasolutions.com

In one of their white papers we found a very good explanation of the needs of modern BOMs.

“As the design progresses toward production, the part-list-like engineering BOM must transition into a detailed manufacturing BOM that includes all the items required to make sub-assemblies and the final product. During this process, numerous project teams contribute to the BOM and item changes (Figure 2). The resulting manufacturing BOM is highly relational and includes various associated data and files, such as design drawings, software files, item files, costing information, compliance status, specification data, and supplier information.” –

http://www.arenasolutions.com/images/pdf/rc_docs/whitepapers/Arena_WP_Beyond_BOM_101.pdf

The Relational Model for BOM Management

One easy way of understanding this is that one sub-component often is part of more than one parent component. Therefore, by using a relational BOM configuration (which is different from a relational database, you can use a relational database, but still follow a restricted hierarchical model in your BOM configuration.), when the sub-component is changed once in one location it affects all parent components immediately. This is the desired end state, that all parent products be instantly updated when a change to a sub-component is rolled out. This relates to all life-stages of a product’s existence. This updated part data is then sent over the planning system where a flag is changed that tells the planning sytem this part should no longer be planned. Having this data updated is as important as the algorithms you use to produce a forecast.

This complexity really requires a software specialized software solution. Furthermore, this is perfect application for a hosted application. (we increasingly wonder why companies continue to ask for software they have to install and manage, particularly when the application is shared.) With hosted applications, as long as the software provides a standardized feed of some type (such as RSS), application integration can be managed completely on line, so a BOM Management – PLM service provider like Arena could be integrated with an on line version of a transaction processing system and the service parts planning system.

Application Screen Shots

Arena has a nice interactive demo on their website, so we decided take a few screen shots. This screen shows the different status of notifications.


Below we have a listing of notifications for particular BOM numbers. We also see the people (users) that have the ability to view or edit or comment on the BOMs.

Below we see the view for Monica Williams, and the materials for which she has notifications. You can see that each of the materials has an event code attached to it.


When we select one of them we get taken into the detail.


Here we can see who is part of the notification distribution list.


Here we have a flowchart of the process status.


Here we can see that suppliers are involved in this process and can log in.


Also, the individual products that make up the BOM are listed as well.


For each product, there is a coding for the items compliance requirements as well whether the prase of the item (if its in production, obsolete, etc..)

If we select the files, we can see all the attachments to each product.


In conclusion, we find this software very compelling. Furthermore they offer a fully hosted solution which they call on-demand. In our consulting experience, Arena is providing answers for a lot of problems that plague BOM management at many a company.

Open Question

One of the questions we do have is where an MTBF value is located. For the purposes of service parts planning, Arena just needs to feedone number per part. Both SAP SPP and MCA can perform their forecasting(if the option is selected) from a simple MTBF value associated withevery product record. This is called leading indicator forecasting inSPP and causal forecasting in MCA. At least MCA has some involved ways of calculating the overall service level, and one ofthe inputs is the MTBF of the underlying items – related to theinventory coverage for each item.This is something that should naturally be maintained in Arena. How this value is obtained is a different topic and is covered here.

http://www.scmfocus.com/servicepartsplanning/2008/12/09/vendors-and-software-for-determining-mtbf/

However as far as how Arena holds the MTBF, we will update this post when we find out.

References

Wikipedia on PLM Arena Solutions

 

Determining MTBF and ReliaTech

Forecast
Service Parts Forecasting

The main way service parts are currently forecasted is through the development of a MTBF. The MTBF is often developed from using similar parts and can be derived mathematically. However, there are also companies that perform physical testing to develop the MTBF number. One such company is called Reliatech. http://reliateck.com/new/index.php?option=com_content&task=view&id=32&Itemid=95 You send your products to them, and they perform the reliability testing. This type of testing goes beyond simply testing an overall component. This is explained below.

Reliability testing may be performed at several levels. Complex systems may be tested at component, circuit board, unit, assembly, subsystem and system levels. (The test level nomenclature varies among applications.) For example, performing environmental stress screening tests at lower levels, such as piece parts or small assemblies, catches problems before they cause failures at higher levels. – Wikipedia

Specialty Area

These vendors work in what is called the “reliability prediction” area or sub-industry. This page gives a good overview of how this is done.

http://www.relex.com/resources/art/art_data.asp

A few other MTBF services out there provide you with an MTBF when you provide your BOM to them. Optionally, instead of having them do the work, there is also reliability software. In either case you correlate the MTBF to your BOM.(This actually brings up the topic of PLM which we will discuss in our next post.) See the MTBF service below.

http://www.itemsoft.com/relpred.html

Generally, there is a high level of frustration at clients we have seen in developing and managing their MTBF. Reliability testing and prediction is a difficult area and one should not shy away from bringing in expertise in this area to get the MTBFs as accurate as possible.

References

Article on MTBF

We found this to be an informative article on the topic, in terms of why MTBF is used as well as different MTBF options.

http://www.pump-zone.com/pumps/pumps/understanding-dirty-data-comparing-mtbr-mtbf-and-mtbpm.html


Service Parts and MTBF Forecasting

Service parts for this products can be predicted based upon installed base and usage. The forecasting is a subset of causal forecasting as can be seen in the graphic below.

What Type of Demand?

All service part demand is dependent demand. That is the demand for service parts is based upon purchases that have already been made. Service parts can be forecasted using simple demand history, as with finished goods, or they can take advantage of the installed based and usage of the equipment that is in the field. For some things just the population information is available (population information is obviously much easier to attain, generally only large and expensive equipment like airplanes or construction and heavy industrial equipment has the usage tracked.)

The bigger and more expensive the asset, the easier it is going to be to get usage information. However, usage data would not generally be available for consumer items.

How Does the Mean Time Between Failure Fit In?

MTBF is one particular modality of causal forecasting. Most causal forecasting simply uses one or many independent variables to predict the future dependent variable. However, causal forecasting with MTBG in service parts uses a developed failure rate for the in the field item.

This is a simple example, but it captures how MTBF forecasting generally works.

Combining MTBF and Other Methods

Often the different forecasting categories are thought of as only being used independently. That is if you one for a product or group of products you cannot also use another. MCA Solutions actually allows you to use both a time series and an MTBF forecast. They call this the composite forecast and this forecast has the ability to give different weights to each forecast type. For instance you could weigh the MTBF at 70% and the time series forecast at 30% or any other set of percentages that you wanted.

Prevalence of MTBF Data and the Usage of This Type of Forecasting

Many companies talk about forecasting using MTBF data, but few of them are interested in doing the work to maintain the data. What is unfortunate here is that the data is not that difficult to maintain. There is not one level of granularity that companies have to drive to in order to use causal methods. They can get benefits from using just a basic high level value of their installed base. This should be available for even consumer items by taking previous sales data and applying degeneration percentages (for items that fall out of service) in order to develop a very basic installed base number. Once this number is attained it can be used for MTBF forecasting.

Some basic mathematical estimation can get companies close to the real values. Once these basic installed base numbers are generated, it opens a new opportunity to begin managing the service forecasting process differently.

It would be nice to report that causal methods on only underused in service organizations. However, this is not the case. It also extends to most supply chain organizations. See this post for details.

http://www.scmfocus.com/demandplanning/2010/10/the-missed-opportunity-of-causal-forecasting/

Obviously, there can be no causal forecasting without causals. This type of data should be elementary to maintain, but it is often not maintained. John Snow, in his Uptime Blog, which is associated with Engima, provides some good insight as to why below. It seems that the natural inclination of many service departments is to focus on quickly getting equipment back in service, with less concern for proper equipment maintenance and calibration. During a break-fix event (unscheduled maintenance) this is a rational response: the equipment is down, revenue generation has stopped, so get the machines working again. However, even during scheduled service events mechanics can become overly focused on speed. This is an example of reacting to the urgent rather than resolving the important. The problem is that service departments are often measured more on productivity than on quality.

See the full article here.

http://www.uptimeblog.com/tag/mtbf/

 

Service Parts by Industry

ServicePartsByIndustry.jpg
Industry Differences

Different industries have very different focuses in terms of service parts. Much of it has to do with the attributes of the products themselves. Some of these attributes are listed below:

  1. The length of life of the supported product (i.e. heavy equipment has much longer service part lifetimes over consumer electronics)
  2. The expense of the supported product
  3. The complexity of the supported product

Generally the larger, longer lived, more complex and more expensive the product the large percentage of overall revenues are derived from service parts. Airplanes are an example of where revenues in the form of service parts can come 25 years or more after the initial sale. The major industries for service parts are the following:

  1. Automotive:
  2. Aerospace:
  3. High Tech: (primarily for the manufacturing machines, such as semiconductor equipment)
  4. Construction and Industrial Earth Moving Equipment: (the largest service part organization and now service part third party, Cat Logistics, was originally an internal organization to Caterpillar, which was setup to service Caterpillar tractors and other earthmoving equipment)
  5. Consumer Durable Goods: Many consumer items are long lived such as washers, heaters and refrigerators.

The Challenging Environment of Service Parts

These features combine to create a very challenging environment for service parts planning. The emphasis here is planning. The execution of the plan is not very much different from the execution of original production items. This is why the requirements (planned production, transport and new buy orders) can be effectively executed through and ERP system, but can not be effective planned by most ERP vendor planning systems. However, regardless of this fact, most companies are still planning their service parts with a combination of ERP system with external planning spreadsheets.

One of the best articles on the importance of service parts planning is (Winning in the Aftermarket, HBR May 2006, Cohen, Agrawal, Agrawal.). In this article the following are mentioned.

According to a 1999 AMR Research report, businesses earn 45% of gross profits from the aftermarket, although it accounts for only 24% of revenues.”

“On average whopping 23% of parts become obsolete every year.”

“Indeed, third-party vendors have become so price competitive that OEMs lose most of the aftermarket the moment the initial warranty period ends.””Each generation has different parts and vendors, so the service network often has to cope with 20 times the number of SKUs that the manufacturing function deals with.”

“Aircraft manufacturers, for instance, can reap additional revenues for as long as 25 years after a sale. The longer the life of the asset, the more opportunities companies will find down the line. Each generation has different parts and vendors, so the service network often has to cope with 20 times the number of SKUs that the manufacturing function deals with.” – AMR

Chicken or Egg?

The question of whether purchasing companies or software companies were what retarded the market is an interesting question and could be the topic of a separate article. This shortage of systems for service parts management has left the majority of service parts networks managed by manual means. Paradoxically, due to the more complex nature of service part planning, it is even more difficult for a human planner to compete with a computerized solution than for a human planning to approach the quality of original product planning. While more complex planning systems are required for service planning, the desire of companies to spend money on service parts infrastructure and software is lower. What results is a seriously sub-optimized sector of the economy. This is why we have proposed a 4PL model for service parts management, which is described in this post.

http://www.scmfocus.com/servicepartsplanning/2009/06/10/service-parts-are-a-perfect-market-for-4pl/