The Best MBE Explainer On The Internet

Trends / The Best MBE Explainer On The Internet
Model train crossing bridge

Summary: A model-based enterprise (MBE) is a new paradigm to manage manufacturing processes. It puts a model of whatever you’re making at the heart of your process, then uses it to power your product development. MBE creates a shared version of truth and prepares organizations for the next wave of digital transformation.


The model-based enterprise, or MBE, is a new paradigm where a visual blueprint (think a 3D CAD file) powers the rest of a process, enabling collaboration, nonlinear product development, and organizational-wide digital transformation.

This post is going to cover:

  • What MBE actually is
  • What it means today
  • How model-based enterprise for manufacturing sets up organizations for the future.

What does model-based enterprise mean?

model-based enterprise prevents mistakes

Model-based enterprise is a new framework to take something from a design diagram through to a manufactured product faster and with fewer mistakes.

It’s especially useful for complex value chains with lots of suppliers and sub-suppliers serving end-clients with a high level of procured-in parts. Let’s look at the example of an auto supplier to explain it a bit more.

Traditionally, the auto value chain works like this:

  1. The OEM designs a car.
  2. They choose their suppliers and then send CAD specs to them.
  3. The suppliers review the specs and contract their sub-suppliers to deliver the relevant assemblies (e.g. the chassis, the engine block, etc…).

Within each supplier, there’s an internal process where the correct person/department does what they need to do, creates a new output, and passes the output down the chain.

For instance, the design team gets the CAD specs, then they pass it to engineering, who generates a bill of materials (BOM). Then, they pass that BOM to the procurement team, who generate a requisition list and pass it on to suppliers. And so on down each step of the manufacturing process.

But, much like the kids game telephone, it’s easy for small changes to creep as information flows through the process, which can result in major problems at the end.

A model-based enterprise works differently. Instead of a linear and sequential document-driven process, it’s model-centric.

Companies put their information model (e.g. a CAD drawing — we’ll come back to information models in a minute) at the heart of the process. Then, each department or sub-process is kicked off pulling directly from the information model.

If we go back to our car example, it means:

  • The BOM never becomes a standalone document. Engineering might create a BOM, but it’s linked to the underlying CAD.
  • When procurement reviews the BOM, it’s like they’re looking at the CAD — just in a different format.
  • When procurement passes their requisition on to suppliers, the requisitions are linked to the CAD as well.

This format has a number of benefits:

  • It creates a shared version of truth. Instead of a change cascading down a chain (usually manually), a change ripples out from a central point (usually automatically). For instance, if the OEM sends over CAD version 2.0, that would have to be translated into multiple new documents, so you’d get a BOM v2.0, requisition 2.0, and so on. With MBE, the CAD is updated to v2.0, and then everything else automatically updates to reflect that change because it’s all linked directly to the CAD, not linked through lots of different chains.
  • It lends itself to automation. Because you don’t have to automate dozens of steps and processes, it’s a lot easier to automate.
  • Iteration is easier. Because everything is only one link away, information and changes travel a lot faster. Say, for instance, there’s a requisition problem and procurement can’t get the part they need. Normally, they’d go back to the engineers, who would go back to the designers, who need to redesign the CAD file, to pass the new specs back to engineering, who update the BOM, which procurement then reads and tries to get the parts for. But with MBE, procurement would pass the requisition failure directly back to the designers who would update the CAD, and then that change would automatically ripple out to the BOM and procurement requests.

model based enterprise diagram

Image courtesy of model-based engineering.

What is an information model?

So that’s the basic idea of MBE: some information sits at the heart of a process, and everyone else plugs into that rather than building a long and error-prone chain across multiple departments and suppliers.

We’ve been talking about the information model as  CAD files in our examples because it’s easy to understand. And, in fairness, that’s a big part of model-based enterprise progress.

Manufacturers that use CAD files to design their products are the ones who are interested in a model-based enterprise.

But CAD isn’t the only option. Any information model that is used to drive a manufacturing process forward and either auto-generates or wholly replaces documents can be at the heart of a model-based process.

For instance, in the world of continuous manufacturing, the information model might be a recipe. Or in pharmaceuticals, it might be a formula.

Why MBE is happening at all (and specifically, right now)

Manufacturing is facing challenges that will manifest in the next 15-20 years. Businesses that can adapt to be digital-first builders will thrive — those who can’t, won’t.

Companies know this. They know that, at long last, digital transformation is coming for them. And many see MBE as the answer:

  • MBE is actually possible now. Cloud technology and integrated design, engineering, and business software have made MBE more of a reality. As we’ve moved towards a digital manufacturing structure, the use of physical documents has started to ebb.
  • Demand for change is driving bottom lines. Challenges (and opportunities) like a flat world, decreased innovation timelines, fractured supply chains due to specialization, and product complexity has forced digital transformation just to keep up.
  • Organizations are realizing Follow the Sun manufacturing. That is, they want to make a production cycle so streamlined and distributed in such a way that there’s no downtime. Offices work their standard work day and then hand off their efforts to another office in another time zone so production can continue.
  • Collaboration & simultaneous processes are no longer optional. Decreased time-to-market standards have made sequential processes unrealistic for modern delivery timelines.
  • Manual processes are too expensive. Margins for manufacturers are decreasing as competition for OEM/OBM contracts heats up. Maximizing efficiency of high-cost engineers is essential. MBE helps automate tasks like data manipulation and catalyzes information flow between disparate business software silos (e.g. ERM, PLM, SCM) to reduce the man-hours needed to take a product from concept to production.
  • Future proofing. Digital twins, digital threads, the industrial internet of things (IIoT), and the staggering cost savings of iterating and testing in the digital world rather than the real one are essential to the manufacturing mix. This new wave of digital transformation technologies simply can’t happen in a document-driven world. Without MBE, their potential won’t be realized.

One more thing… MBE doesn’t exist (yet)

One thing worth mentioning is the degree that MBE is a reality. Some companies are working towards it, but there’s not a shining example of successful MBE deployment (or if there is, we don’t know it). Legacy data and systems, clunky customization, on-prem solutions, and the cumbersome nature of CAD files and PDF viewers have so far made MBE a bit of a pipedream.

But it’s where we’re heading.

The ethos of test early, test often means a successful MBE company can innovate faster for much less cash. And with new digital transformation technology on the horizon that requires the integration an MBE approach facilitates, model-based enterprise adoption will eventually pay dividends far beyond document elimination.

At the end of the day, MBE is a manufacturing process designed for the next generation manufacturer.

2018-12-12T14:22:12+00:00