BOM Management: Between Spreadsheets and Enterprise PLM

Oleg Shilovitsky, PLM Consultant and Blogger, Beyond PLM
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Introduction 

Bill of Materials (BoM) is one of the key elements in product development and manufacturing. Surprisingly enough, Bill of Materials topic is still drives controversy and much discussion. On the surface you may think a BoM is a simple thing a list of components required to make a product. This is a very high level view of a BoM. Think about design, engineering, manufacturing, supply chain, support and maintenance and you can appreciate the complexity of BoM management. 

 Mass manufacturing involves making many copies of product, very quickly for lowest possible cost 

Modern Bom Management Challenges 

The 21st century brings new levels of complexity to BoM management companies have never seen before. Reasons include globalization, complexity of supply chain, customization, new manufacturing technologies and many others. Internet is changing the way companies are running businesses. Ordering systems are changing. Simplified materials flow and reducing of shipped items and prefabricated assemblies create unique BoM requirements. Customization is another prominent trend. The number of configurations can grow significantly. The demand is to have a separate BoM for each order. Price competition leads companies to optimize design, use contract manufacturing, and use global supply chain. 

Multiple Boms Demand, Reality and Best Practices 

Modern BoM management system roots lay in manufacturing and procurement planning. BoM management was a foundation to feed planning systems with product information. BoM existed on drawing blueprints, but very often the most updated BoM lived on corkboards, manufacturing walls and shopfloor manuals. The introduction of 3D CAD, increased the demand to manage product structures and introduced a separation between engineering and manufacturing BoM. The need to manage EBOM and to have Item driven development is very much debated by many companies. Company departments introduced a new level of BoM separation. Each department or function demanded its own way to manage their BoM. The separation of engineering and manufacturing BoMs is the reality of almost every manufacturing company. 

Bill of Materials, Manufacturing Silos, and Why Sync is Hard 

Multiple BoMs are located in different systems. Companies have spent much money and effort to maintain logical connections between disparately located BoMs. The complexity of BoMs are characterized by product data, lifecycle, and process. Product data is a fundamental part of a BoM. It includes assemblies and components connected together to form the result data set representing a specific product. These connections are complex, and define product configuration, specific aspect of manufacturing, supply chain and others. All products are going through different lifecycle stages: concept, design, manufacturing, service. Process is a formal set of activities and it includes BoM information as an essential element defining product data and changes. BoM information is located everywhere in an organization. To manage BoM between multiple organizational silos requires lots of data synchronizations and it is never an easy process. 

Why Excel is the Best Tool to Manage Bom 

With such high diversity of requirements and needs, the question of choosing software to manage Bill of Materials is not obvious. The demand for diverse set of requirements, data manipulation and reports often create a high barrier for offtheshelf (OTS) products such as PDM, PLM and ERP. The most widely used BoM management tools is a spreadsheet. Excel is beloved by engineers for its simplicity, flexibility and ability to absorb any type of data. Any configuration of fields, data, formats, etc. is supported. Anything canbe transformed into Excel and most of applications has an “export to Excel” function. Although it is easy to start with Excel, managing BoMs using Excel can become a complex task in time. As product complexity grows, additional parameters and data to manage ends up creating an Excel mess. So much so, many organizations have an “Excel manager” role. Excel is a poor integration tool to connect data located everywhere.

To find the last Excel is another problem. As soon as an Excel file becomes complex such as being connected to other data sources or linked to other Excels, it cannot be encapsulated and sent via email. Spreadsheets are literally requires a CEO (Chief Excel Officer) to modify BoM Excel spreadsheets. 

Multidisciplinary and Software BoM 

Products are getting more complex and combine multiple elements: mechanical parts, plastics, electronic. Traditionally, engineers use separate tools to design these parts: MCAD, ECAD and EDA tools. Then the coordination is getting complex: how to put together the right information about the product, manage changes, coordinate with suppliers, etc. It becomes a critical factor in manufacturing companies of every size .But to manage mechanical, electrical and electronic components is not enough today. The last mile of complexity in all products is software. The software might have embedded component as well as data and cloud software component services. All together they can turn an average manufacturing company into web software operation facility with servers, databases, etc. 

Mass Customization, 150 Percent Bom, and Product Configuration Challenges 

Mass manufacturing involves making many copies of product, very quickly for lowest possible cost. Mass customization is a new frontier in business for manufacturing. At its core, mass customization methods should address a tremendous increase in variety and customization without a corresponding increase in costs. Mass customization and product configurations create a new set of requirements for PLM. So, how to manage configurations in a BoM? The old practices of so called, “150 percent BoM”, variant structure, or configurable BoM  has one or more optional components and/or modular subassemblies, which, when properly set, define a specific variation of a product. In effect, a configurable BoM has many possible BOMs loaded into just one product structure. However, a 150 percent BOM solution worked well for a limited number of configurations with simple options. In modern manufacturing, to produce 150 percent BOM is not always feasible. 

How Complex is It to Manage an Enterprise Bom? 

The requirements to get Bill of Material under control at manufacturing companies are reaching the tipping point. It begs the question of Enterprise BoM as a management category. Today, enterprise BoM is represented by many legacy applications in every manufacturing company. They are poorly structured. It was architectured and designed to support older product development and engineering process. They mostly focused on mechanical parts. Integrated BoM management should support all functional areas of manufacturing company, become available in all geographical location, work for suppliers and partners, enable traceability of parts for quality and service operation. In every organization organization BoM function has two aspects technical and political. Political aspects drive a lot of reasons why BoM management is fragmented in most of manufacturing organizations in the world. To solve a problem for people in multiple functional departments, geographies and organization to get information about correct Bill of Materials is imperative for technology and product to manage enterprise BoM. 

Conclusion 

Companies need to have a single, sharable, structured BoM representation reflecting all stages of product development, manufacturing, maintenance and support. BoM management is siloed and hardly capable of being optimized. Most integration and data synchronization tools are pumping BoM data between systems and silos. Enterprise software architectures are locking customers into proprietary platforms and data structures. The new type of systems should rely on principles of global data management and integration, provide open APIs and support globally adopted data standards. 

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