From BOM Management to Connected ERP and PLM systems​​

Oleg Shilovitsky
Oleg Shilovitsky
26 July, 2022 | 6 min for reading
From BOM Management to Connected ERP and PLM systems​​

There are very few questions that usually trigger more questions than this one – I want to have a single system to manage everything, should we buy ERP or PLM system? Both can manage the Bill of Materials. 

I’ve heard this question many times coming from small and medium size manufacturing companies in the past. COVID and following digital transformation shakeout changed the priorities for many companies. Going “digital” is a matter of survival for many of them. As they move towards a better understanding of their digital future, the question about data transformation is becoming urgent, and therefore the question “what system to use” is coming more often. 

So, the question about what is the right system to manage business processes, enterprise resource planning, product lifecycle management, supply chain management and many others is the one companies want to answer. Should they choose from ERP systems, PLM systems, and what modern ERP solutions and product lifecycle management tools can bring to them?

In my article today, I want to help these companies to switch from monolithic system thinking and start thinking about data and information flows instead. 

Break Data Silos with Information Flows

In my article Digital Transformation: Documents, Bridges, and Information Flows, I was talking about two major transformations – the switch from documents to data and a new sharing paradigm.

The industry is shifting from documents to data. It happens everywhere – cloud, web, and mobile trends helped to accelerate this shift because our information environment is shifting from “managing files on a local drive” to information access. However, many engineering disciplines and applications are still heavily oriented toward files-based workflows.

Modern cloud-native (SaaS) PLM systems are data-driven opposite file-drive. OpenBOM multi-tenant architecture supports efficient data sharing across multiple companies in a value chain. Instead of managing files, it focuses on data as a foundational element. As such, data is used as a much more granular object for sharing, change management, decision support, and reporting. Using assemblies, views, bills of materials, and objects are more informative than sharing files and this is a shift to data-driven workflows.

To start this journey, you need to start thinking about the process in your organization. Even the smallest organization with 5-10 people has its processes and these processes need to be supported by data. 

From Engineering to Purchasing – Connected Lifecycle

One of the most important and critical processes in every manufacturing company is how to go from design to production. After all, the product must be designed first and then components must be purchased to make an assembly (alternatively you can outsource and use a contract manufacturer as a turnkey solution). 

At the beginning of every manufacturing project, every problem sounds easy and solvable. The problems are getting bigger and harder as the project progress and moves to the planning and manufacturing stages. When the design is getting exposed to procurement, production and manufacturing planning, and supply chain management, the problems of design are getting exposed and companies can hit a “red” button indicating that not everything goes according to plan. Why problems are inevitable, in general, and what can be done to minimize the impact and set a process that can help?

The answer to this question is simple – focus on your product data. Many companies are avoiding that by managing a bunch of Excel files with bills of materials and capturing information manually. Later on, they find themselves in big trouble because some of the information was missed or not exposed to the right people and some other people in the organization were not getting it on time and when they got the information, it was a “wrong version” of Excel that was supposed to be exported from their CAD system and magically important in their enterprise resource planning software.

To solve the problem, focus on product lifecycle management and BOM management from the first day. The importance of getting data under control cannot be underestimated. We can see it with many OpenBOM customers that are setting their item catalogs and BOM early in the process and managing a full cycle of data analysis, revision, and change control.

How to Avoid Costly Mistakes

Mistakes are inevitable. However, the worst and most painflul mistakes in manufacturing are happening because of lack of information or absence of the up-to-date information. 

Here are a few examples of mistakes your company or project can hit if product data and BOMs are not managed properly from “day one”.

  • Initial design information won’t be available early to manufacturing planners and the procurement department
  • Inaccurate cost analysis based on the wrong design information
  • Delays in long lead item orders
  • Order of components that required changes of the design in the late stage (especially now with all supply chain shortages, it happens more and more often).
  • Others…

By not allowing data to flow in the organization, you risk your organization misunderstanding the purpose of changes, working with inaccurate designs, or miss approval of the important change. It is essential to set up a proper product lifecycle management and BOM management foundation to manage all this information.

Modern SaaS software – moving to web services

The time when you needed to purchase software licenses, servers, install, configure and customize enterprise software is over. These days, companies are moving toward digital web services that are available online and can be used on demand.

The manufacturing world is moving from monolithic software architecture to web services. Check out my article – Post Monolithic PLM World – Data and System Architecture.

The industry is coming to a point where a new PLM architecture will become inevitable. Mercedes Benz’s article is a great confirmation that existing IT architectures offered by PLM vendors are limited and cannot provide an answer to modern manufacturing process challenges. For the last few years, We are building OpenBOM – a new type of PLM platform that incorporates core principles of new architecture 1/ Polyglot data architecture; 2/ Multi-tenant data models; 3/ Semantic modeling layer; 4/ Digital thread support, and 5/ Connected user experience. These principles change the focus from “thinking about a single software” to how to make data created accurately, and managed properly and to connect everyone who needs to be involved in the process by allowing them to access the right data. It will allow a foundation for an expandable platform approach, and the ability to recombine system functions and user experience by mixing online services provided by multiple vendors.

Conclusion

Starting to manage your product data (BOM and connected files and other pieces of information) early using the OpenBOM service is a good foundation for your data. It allows you to capture important information early in the process and ensure that all this information will become shared and available to other people, departments, companies, and processes. OpenBOM provides a set of PDM, PLM, and ERP functions and also provides an open architecture and REST APIs to connect with other services and products.

REGISTER FOR FREE to check out how OpenBOM can help you and your team today.

Best, Oleg

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