 Boom, what's up everyone? Welcome to Simulation. I'm your host, Alan Saki, and we are still at COFA as the Congress on the Future of Engineering Software for our second annual partnership with them. We are very excited and I'll be sitting down with Dr. Oleg Shulovitsky. Hello. Nice to meet you. Hello. Thanks for coming onto the show. I really appreciate it. I'm very excited to talk to you about Bill of Materials. This is a very interesting thing. Open Balm is the company that you're the co-founder and CEO of. This is the last three and a half years for you with Open Balm and also doing the last 10 years as well as a blogger and social media advisor at Beyond PLM, too, which is very cool. So we'll be unpacking both of these things throughout the conversation. Oleg, how did you get involved in engineering software and how did it like peak your interest and then how did you pick where you wanted to get involved? That's a very good question. This happened a long time ago and originally I wanted to be an architect and somehow I also wanted to deal with computers. So many, many years ago somebody told that a computer aided design is actually when I can take architecture and computers together. So believe it or not, it was kind of 35 years ago and I'm still in this. And then when you were first, you know, 35 years ago when you were learning that you can take architecture and you can take these designs and put it into digital form and then be able to tinker with them in the digital space, what was kind of the moment for you that was like, whoa, this is going to impact so much? How did that come up and where did you exactly see yourself fitting into the picture? I don't think I realize it back those days, but in 85, in 86, so it was about AutoCAD that was very easy and beautiful. They run on PC computers. That was the only thing that was available for me living back in the Soviet Union. So that's kind of amazing stuff that instead of drawing on the desk, the board, I was able to get AutoCAD and do some stuff and then also do programming. So I think it's all started there and then it's got even more interesting with data and everything else. Yeah. As the tech has gotten better, your ability to manipulate the digital sphere has gotten more interesting. Then how did it evolve then? You know, being involved in this 35 years, how did it evolve over time all the way up until where you're at now? Well, it evolved with the steps, so I think it was not 35 years. I think it was a little bit less. I'm not as old as you know. But I think it's when in different trajectories. So one trajectory was obviously technological because my roots are in technology. And that's what I was doing when I lived in Israel for many years. I worked for Autodesk Resellers. And as the first time that I realized it's not only about writing programs, but also going to customers and trying to sell them those programs. It was my first attempt to merge technology and business because you need to sell the digital. And then second time I was working at the SO system and as part of the challenge I was promoted to be a CTO. And I've been told that we made great technology, but now go to customers and explain them. So that was a challenge to go to customers and explain technology. So that was the moment of time I started my blog beyond PLM because I realized that to explain technology is a challenge by itself. So it doesn't stop with the great technology. It's actually just the beginning because you need to go to customers, potential customers and sell them to this technology and explain them the value. So that was the moment of time I also started the blog and that was also realization that technology is as good as that can make it value for customers. And that's where I continue. It's very important to have that moment of oh translating what I'm doing here into applications for real world purposes and talking to industry about how they can use it for the betterment of their processes is very important. I'm glad you're identifying that. And with the blog then you're able to get even more reach than just one-on-one conversation, but now you can go one to thousands and more with the blogging on the projects. So then, okay, so now we find ourselves, you know, doing open bomb product-centric business tool for manufacturing. So you kind of went through the steps of seeing the field progress and then you're like, I want to take reins and make my own strategic about that. Yeah, open bomb was also a discovery of the problem and finding a solution. And we are not done yet by any means. It's just the beginning. It's just the beginning of the story. But the way it started is that Bill of Materials, I have a question because Bill of Materials is so exciting. It's like everything around us, like we can pick anything in this room and we will see this camera, of course, but this chair has Bill of Materials and this sofa has a Bill of Materials. And explain to us how loud it is. Even these guys, yes. Even these things. Everything has Bill of Materials. So it's not all the same. It's not all brackets and plates and screws. But it all has Bill of Materials. Actually, the best way to explain Bill of Materials is food. Okay. Steak also has Bill of Materials. Your cake has Bill of Materials because basically you think about components and ingredients. You're taking them together. You're buying them. You're bringing them together. You're mixing them. You're baking them. And then you get the product. So think about this. If you think about manufacturing from that standpoint, anything is like food. Okay, sure, sure. With recipes. It's like a recipe, exactly. So you think about this Bill of Materials. It's a lifeblood. So you cannot do anything in this world without Bill of Materials. Some people like to call it. Some people like to call it differently, but it doesn't matter. So that was the thing that made me really excited because that's the foundation. People like to call it digital, but fundamentally, it's about data. So it's a data foundation of everything that you do. If you don't have it, you cannot do it. You cannot plant it. You cannot buy it. You cannot assemble it. You cannot do anything. So that was the beginning. And then I realized that many, many, many manufacturing companies, I knew it from experience, are ending up with Excel. And that was a really painful problem that I've seen for many years. And again, it's a well-known problem. But the opportunity that I've seen is to come with a tool which is enabled by cloud technologies and enabled by new technologies that can make it easy and available and affordable for everyone. So if you think about this, the open boom is an opportunity to many manufacturing companies to stop using Excel and to start collaborating using digital tools. So a typical prospect for open boom is a manufacturing company, a small manufacturing company that is having a process going from US to Europe to China because the manufacturing is different today. In the past, the Ford factory had one giant factory that was making Ford automobiles. And from the left side, you get iron and glass. And from the right side, it was coming automobile. Yeah. And today it's all contractors, suppliers, and it's all global. Crazy. So and when small company can realize the power of internet connection and contract manufacturing and talents across the globe, they're obviously doing it right. But here's the thing then, they're taking both materials, placing them in Excel, sending them in the email and got lost. Yeah, yeah. Because I sent my bill of materials to contractor in China. And by the time he got it, I already made a change. And by the way, I also made a mistake and I sent the wrong one, but I didn't realize it. So they are doing something and I am doing something and we completely not on the same bomb. So the open bomb is a technology allowing you to stay on the same bomb. So everyone is on the same data. So that's the one fundamental part of the materials and the open bomb as a technology. Okay. I have a couple of questions. First is, it's so interesting hearing you talk about how Ford had a one, the car manufacturing facility factory where iron and glass out one side, car out the other side. That's so interesting compared to now in the globalized world where it's now pieces and contractors all around. That's so fascinating. And then it's also very important when, if you can't, with the internet, with this connectivity that we have now, to have technology where we can make an update that goes live to everyone and not have these oops moments of, oh, I have the wrong bomb over on this side. So, okay. Now, now teach us, is bomb the bill of materials, is that part of the product life cycle management, the PLM? Is that one part of the PLM? How does that work? That's another great question because if you ask somebody about what is PLM, you, from a single person, you can get two answers. It depends if it's in the morning or in the evening. Now you're asking two people, you will end up with five. So PLM, it's really a discipline that is very hard to define because it depends on people. For somebody, it's a business discipline. For somebody, it's technology. For somebody, it's a product. So it's also, again, I want to come back to what I've been experiencing for many years. There are some people that just don't get it. And the people that, you know, their objective is to make products and they cannot wrap their head around the complex definition of PLM. They just said, we don't need it. You know, I talked to small manufacturing companies. They said, we don't understand it, but they understand simple things. So the simplification, it's really big deal in my view because the complexity hurts people. And I think one of the problems of PLM, although it's a great idea, brilliant technology and excellent companies, it's way too complex for everyone and it doesn't work for everyone because of the complexity. It's very much oriented on a lot of consulting. It's very much oriented on the organizational change. So it's fine, but it depends on who you're talking to. It depends on your customers. Like I said, if you need to explain the value of technology, you can choose simple words. If you can choose simple words, why not? So people understand BOM. At least this is my conclusion for the group of customers that we are working with. Actually, the way we explain open BOM is the product-centric business tool is because we are not only doing BOMs. The recent addition to open BOM is ability to manage vendors and ability to manage purchase orders. So why so? Because a small company wants to have an end-to-end process. And for them, bill of materials, it's a recipe for purchasing. And if they don't have this recipe, they don't know what to buy. If they have a wrong recipe, they buy wrong stuff. So the cake will not be a cake, it will be something else. So from that standpoint, I think the BOM probably doesn't fit the definition of every company. Okay, interesting. And then, because to me someone that's very much a newbie that is trying to understand what's going on in the engineering software world, to hear the acronyms and then to be able to try and place them into where they make most sense is something that, like we were discussing earlier, like you mentioned, it's important to make certain reductions in complexity to make the general public be more understanding of what's actually going on. When you give the example of a cake being baked with the bill of materials, this makes perfect sense that you need the right ingredients for the chair to be made or for the table to be made, the cameras, etc. So walk us through these industry examples. So if we do want to make chair, table, tripod, camera, if we want to make this, we need our team then needs to use something like Open Bom to be able to all have the right components to make the camera written down, sourced the raw materials from the right location so we're able to find where those are coming from. Being sent all to the manufacturing facility where it gets assembled, the CAD is also, all the computer designs are also part of Open Bom as well, so does Open Bom cover this kind of like whole spectrum even to the customers? You were giving us the example of the vendors at the very end as well, so can you give us what an industry example would look like? Sure, but the thing that you need to realize is that your example is perfectly fine, but generalized. So the specifics, the things are different and devil is in details, especially when you come to a manufacturing company. So you need to differentiate between probably three fundamental type of manufacturing processes and one if you build to stock, it's for example when your company is doing many microphones and you sell them based on demand on Amazon. So you build those microphones and another example is that when you're making complex cars and you configure them based on order and another example is a complex industrial equipment that is engineered based on the requirements of customer. So you can think about these three use cases and the manufacturing process will be different in each of these three specific use cases, but this is how you can classify it. So based on each of these requirements, the process will be different. So in one where you will be building to stock, you will have a more or less standard design that you will be building all the time and you will optimize your process. So when it's will be completely custom engineering project to build something, it will be different project, but what is the common between all of them that you will need to have this recipe of the parts and relationships and related information and that's what the bill of materials about. So it can look slightly different in all cases. The process around can be slightly different. It depends on how many contractors you will be using. You will also get different, but fundamentally it will be very similar things and many and that's why manufacturing companies are struggling with these problems a lot because for them communication and process optimization is one of those that important because when you have two systems working independently and two companies working independently, the information is lost and there are processes not optimal. So when we take the different processes that are happening at a company and then you just open bum then try and integrate the communication with the design and the manufacturing and the CRM, does it try and integrate across? Yes, what open bum does, it's first of all create a data foundation and second is automating some of these manual tasks. So if you've been talking about CAD, so typical design, you have your CAD files and you need to create build materials. So in the traditional form, engineer will export data to Excel and send it using email. Very painful and then the changes are coming and it needs to be extracted one more time and manually copy it to another place. So this is the first place where open bum gives you a big advantage because we automate this process. So we extract data from CAD automatically using our integrations and we keep it in sync. So everything happens in CAD automatically coming to open bum. Everything that you do in open bum is merged with the updates that's coming from CAD. So eliminating manual tasks, automating process. So now let's move forward. We manage catalogs of all parts also, standard also, engineers. And we manage a quantity on hand for small shop. They need to know how many parts do they have and then they take an order. They need to know how many they need to order. So we create another instance of what is called planning bum or order bum. So this planning bum or order bum, it's basically scaled build materials for a number of units that you want to make. We automate this task. We automatically calculate how many parts are missing. So and then this planning bum is actually a view that allows you to see how many parts you have and how many parts are missing. And then you're taking it in two ways. One, you can say if I need to have an if I have an order of 100, I need to order this number of parts based on my planning bum. But I can take it in reverse. And many operational managers can ask, so how many units I can ship without ordering anything. It's also built on the information that we have. So we can run it in reverse in two things. And this is kind of decision point for manufacturing company. And then the last but not least, now we need to make purchase orders. So we're taking this planning bum and automating, creating a purchase order. So you can think about planning bum that requires that need to be split to 25 theory orders for different contractors. So it somehow needs to be automated and sent out. And this is another place where we automate and we not requiring any copy paste operation because this is where mistakes are happening. Look, I see I see people in the evenings that doing some other job in manufacturing company in the evening, coming to website and ordering parts because that's that's the way small shop work. So that's that's the way. So we created data process that automated and connected. And that's what makes company more efficient. Yeah, I like how you explained it as you start with the data foundation and then you work on the getting rid of some of the the tasks where there's also not only a lot of human labor involved, but a lot of human error involved. Absolutely. And then when you when you learn how to how to make this all seamless and frictionless process, more people can spend time being creative at doing their best work. I like how you explained how when you when you take the CAD file and you move it over into into Excel that when when not only do you have to then potentially have someone else from around the world when you when they take a look at it. If there's been a change made, then that Excel needs to be updated when they view it. It's it's basically like starting at the data level of the CAD file itself. And that's and that's that's super crucial. Now, okay, so now with with the with what you're doing with the with the bill of materials with this data as well as the automation processes, where do you see this now going in, you know, you talk we talked a little bit about the 30 years that kind of built up until this point. Where is it going from here? It seems like everything is moving to to cloud and making putting our what we want to be processed into the cloud and doing like all the different services from there. This is that part of Open Bombs future. That's you see this is very technological explanation. Yes. So what I would like it's more visionary explanation about where it will take us based on something that you know. So if you this day is going to buy something. So where you go, you go to Google, you go to Amazon. Yeah, exactly. So you said. So think about manufacturing companies in 10, 15 years, they go to Open Bombs like to Amazon. Because based on, you know, if you know the recipe, you know what you need. And if you know what you need, you can optimize. So the Open Bombs platform can analyze information of many products. We can make recommendation to people about what to buy and where to buy. If we manage vendors, we can help companies to choose right vendors. So that's the information that intertwined connected and providing business value. So exactly like we absolutely no question the business value for us of Amazon going and figuring out where to buy a particular stuff. Because we know who is using it and who liked it and what is the constant. We know all this stuff. It's almost natural for us. It's 10 years ago. It was not natural. 10 years ago, we've been going to the nearest shop. We are asking opinion. What is this and is it needed? So today we don't do it. Today we, you know, I look people in the store going with the phones and checking against the phone. So manufacturing companies are the same. Just they go into transform in the network. You know, I would call it manufacturing network where everyone is intertwined interconnected based on business relationships. And the role of Open Bombs will be to help them to operate in this digital system. And then when you give us this vision of one being able to find a part that they desire for their manufacturing process, when is it as simple as me having that be updated in my CAD file and then me being able to see how much that part costs from Open Bomb as well, where you have a data set based on that part, how much it costs, where it's going to be sourced from, how that affects the model. Yes and no. First of all, for example, calculation cost roll-up. It's even today simple with Open Bomb because we have calculation formulas. And we allow you to roll up cost. It's by itself a hard thing to do. But if you start thinking about transformation of the entire system, you need to think globally about existing relationships. And this is where the hard and complicated changes will be coming because, you know, digitally everything is simple. But human changes. Like I was buying from John my entire life and now I love that I am overpaying twice to John. So what are you going to do about this? So that's a challenge. And who is the new person that you'll be buying from? Who is the new company and how to organize it. This is where it comes all complicated. Just likely take a look on the changes that are happening with some digital form of transportation like Uber. Somebody is happy and somebody is angry. Like that's the most complicated thing, is a change. And change will happen in manufacturing companies because the relationships will be broken and some relationships will be optimized. And that will drive the change. That's why it will not happen overnight. Although you can say technology is available. Yes, technology is available but it will take change and some of these changes will take time. But no question it will come. This is very interesting. The human relationships across the world component has so much to do with this. And I think we talk so much about technology, technology and software that sometimes we forget about the human component which is so emotional and so it doesn't operate on computer processors and binary. Yeah, there are two things that's fundamentally very hard to change. The first is the people. And the second is business models. So if somebody is operating in a particular business model, it's very hard to change. For example, there are companies that sell in parts and they sell in parts from a book. And believe it or not, even today they are thinking like a book. So again, those people will have to change because somebody will start buying and consuming and optimizing and it's not because they own the book. And before somebody was buying this part from this book. Because the book is the only thing that he had on this table. So that's where he was buying. And versus now when you, like you were saying earlier, when you're adding a component it's not, it's from a catalog, a digital catalog, and you know where potentially it's being sourced from, what the human relationship is, where that's being sourced from, adding that change in the CAD file directly to the bill of materials. This is a very, very important. I can give you an example. Today, when you want to go to airport from your home and you run your Vaze or Google Maps, it can tell you that typically if you want to be there at 8 a.m. on Tuesday, you need to leave your home at this time. Because we know how much traffic it will take. We know all these details. Now think about manufacturing company want to do something and having more or less similar, like imagine this. I'm trying to build this and I'm using this component and I know this component had a failure rate of 5% under certain conditions and many things. Yes, this is a very good comparison of when a manufacturing company wants to make a decision, kind of like when we want to go to a certain destination. How can we optimize that process for that manufacturing company with the relationships with all the data foundation? This is very cool Oleg. We're very excited to see the future of Open Bomb and thank you for teaching us about it. We really appreciate it. Thanks for coming out to the show. Thank you very much. We really appreciate it. Thank you. Thank you. Thanks everyone for tuning in. We greatly appreciate you. Let us know your thoughts in the comments below. Build materials. Start talking to more people about it. Start talking to more people about what it's like to actually manufacture goods like this and the data foundation behind it. Huge shout out to CoFes. CoFes' links are below as well. Congress on the Future of Engineering, shop software. Check them out. And go and build the future everyone. Support the artists and entrepreneurs that you believe in. All our links are below as well. Manifest your dreams into the world. We will see you soon. Much love. Peace.