Bill of Materials (BOM) management is an essential process for any engineering team or manufacturing organization. The universal definition of BOM says that it contains all materials and components that you need to have in order to make a product. But such a definition does not always help and can lead to a lot of complexities and misunderstandings.
In fact, BOM is everywhere. You can find it on the face of the drawing, in the Excel spreadsheet sent to the contractor, it can be managed using product lifecycle management (PLM), product data management (PDM), ERP, supply chain management, and many other systems. In fact, product lifecycle management and product data management can become very complex and drag BOM management to the same level of complexity.
At OpenBOM, we help engineering firms and industrial companies to solve their data management problems by organizing a product development process and streamlining the information flow between people and organizations. It includes BOM management, which is a natural part of product lifecycle management. I learn about many use cases that lead engineers or anyone else from a manufacturing company to get confused about the Bill of Materials and BOM management.
In my article today, I want to clarify the 5 most confusing situations you can face when trying to organize a proper BOM management process and help you to answer these questions to make the right decision about organizing the product development process and the way to manage BOM properly.
Moving Beyond The Clutter of BOM Documents and Spreadsheets
Bill of Materials management has a long history of suffering from the usage of old techniques to organize BOMs. It comes back to part lists historically placed on the face of the drawings and later to many ways of organizing BOMs as spreadsheets and other documents. The article 5 Reasons Why Managing BOM in Excel File Saved in SVN Is A Very Bad Idea gives you an idea of how Excel or another document with BOM is a bad way to manage product information.
While Excel spreadsheets are used by many companies and many engineers and other people in manufacturing organizations consider them as a very useful tool for managing BOMs, it leads to many complexities and mistakes. The data in Excel is not trusted data. You cannot expect that correct data will be available when needed. The data in Excel cannot be used in the industry to manage designs and manufacture products. And it leads to many questions, part of which are in my top 5 list below.
Beyond Excel to Digital BOM and PLM
Digital transformation is the number one priority for industrial companies of any size. One of the most important steps is to go beyond “documents” representing fragmented and siloed information into more organized digital data sets. Check out our article about Digital BOM, which gives a much better foundation for any company in organizing and managing information. Those are important principles of the Digital Bill of Materials.
- A centralized source of information about all items
- Managed records of BOMs, revisions, and changes
- Structure and Re-use
- Real-time data sharing (no emails, no copies)
It is a foundation of product lifecycle management effectiveness. Effective BOM management is crucial for ensuring accuracy, efficiency, and cost-effectiveness throughout the entire product lifecycle, from design and production to maintenance and repair.
Top 5 Questions about BOM Management
BOM management can also be a complex and challenging task, with numerous factors to consider, such as version control, revision management, vendor management, and data accuracy. In this blog, we will explore the top five most confusing questions about BOM management and provide insights and solutions to help you navigate these challenges and optimize your BOM management processes and how they can be confusing.
1. What is the best way to manage a Bill of Materials (BOM)?
This question is confusing because there are multiple approaches to BOM management, and the best way may vary depending on the company, product, and industry. It is important to create a single source of truth and not to place it in a variety of forms and files that will be distributed and disconnected. A single source of truth for BOM is clearly the #1 strategy.
2. How do you ensure that the BOM is accurate and up-to-date?
This question is confusing because there are multiple factors that can impact the accuracy and currency of a BOM, including changes to component availability, changes to the design, and human error. What is important is to place a system capable to capture changes from multiple systems and data sources to streamline the process of seamless BOM updates.
3. How do you handle changes to the BOM during the product lifecycle?
This question is confusing because changes to the BOM can occur at various stages of the product lifecycle, and the impact of these changes can vary depending on the product, the manufacturing process, and other factors. It is important to organize a system capable to differentiate BOMs for different lifecycle stages (eg. Engineering, Manufacturing, etc) or to manage a comprehensive multi-view BOM approach.
4. How do you ensure that the BOM is accessible to all stakeholders?
This question is confusing because there may be multiple stakeholders involved in the product development process, and each may require different levels of access to the BOM. Additionally, there may be concerns about intellectual property and confidentiality. To have a centralized system that provides easy, but secure access in a seamless way is the key element in your product lifecycle management and BOM strategy.
5. How do you optimize the BOM for cost and efficiency?
I have never seen a single company that is not concerned about BOM cost. But BOM costing is confusing because optimizing the BOM for cost and efficiency can involve balancing multiple factors, such as component availability, manufacturing process complexity, and product performance. Additionally, different stakeholders may have different priorities when it comes to cost and efficiency. Building a comprehensive BOM costing capability can be a big deal, but requires more work. A flexible data model and seamless integrations can help a lot.
BOM management is a vital part of many other systems and processes such as Product Lifecycle management, document management, and many others. To have PLM software to track and manage BOM efficiently might be the most important task to be sure BOM is aligned with product lifecycle, computer-aided design, ERP, CRM, and other business processes. Even if you’re a very small company, having a system capable to manage all product information in a cohesive and structured way is very important. OpenBOM is a system that is differentiated from many other product lifecycle management and other systems by providing an easy user experience and simple processes covering PDM, PLM, and ERP functions that can be used by a startup and also to grow in larger businesses.
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