A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

3 Modern BOM Management Challenges

3 Modern BOM Management Challenges
Oleg
Oleg
11 January, 2013 | 3 min for reading

Bill of Materials. Probably the key element in product development and manufacturing. Surprisingly enough, many companies are still struggling with this topic. Bill of Materials drives lots of controversy and discussions. Why it is so important? On a surface, you may think BOM is a really simple thing. Just a list of components. However, if you think about product development, BOM is a recipe for a product that you are designing, engineering, manufacturing, supporting, and disposing of. I’ve been thinking about modern trends – cloud, social, mobile, consumerization, and others. In my view, they are going to impact the Bill of Materials management functions in a much radical way than you may think initially. Today I want to focus on what I call 3 modern challenges affecting and impacting the Bill of Materials.

Challenge 1: Internet and lean manufacturing processes  

The Internet is probably the biggest change that happened to us during the past 20 years. It drives changes in the way we work. Connected and lean. Lean processes mean a simplified process organization in a company. Ordering systems are changing as well. Simplified materials flow and reducing of shipped items and prefabricated assemblies create different requirements to BOM functions. BOM hierarchy becomes less important. The completeness of BOM during the process sometimes not required and sometimes can be managed on-demand driven by online ordering systems. The main two elements of functionality – BOM structure and approval process are disrupted now. The number of bills can be increased, at the same time, since the number of orders will be growing as well.

Challenge 2: Customization and “new makers” 

There is a strong trend to personalization and customization. It comes everywhere – electronic, computers, fashion, etc. To manage all possible configuration becomes very critical. The number of configuration can grow significantly. The flexibility of systems needs to be increased. What yesterday was true for ETO (engineering to order) company only, today becomes a reality for many mass manufacturers. In most cases, you will need to create a separate BOM for each customer order. “New makers” – companies that are capable to manufacture a small amounts of very specific products are trending as well. People like to be unique products. The new manufacturing firms (sometimes very small) are experiencing additional pressure on how to proceed with the design and manufacturing. Large and complex BOM/PLM systems cannot help them.

Challenge 3: Granularity and contract manufacturing 

Price competition leads companies to find somebody else to produce some of the components. It leads to outsourcing, offshore, and many other options to make the same work in a different place. The Bill of materials is a critical element in supporting of contract manufacturing. You need to have an ability to organize BOM in a way that allows you enough granularity and at the same time makes engineering and manufacturing BOM much simpler. The ability reconcile multiple bill of materials and support new type of change processes becomes even more important.

What is my conclusion? The Bill of Materials is a critical element in the success of many manufacturing companies. Think about driving maps. In the past we printed it on a paper, folded, and put next to your driver seat. Now it is different – social GPS systems can alert you about driving conditions and suggest alternative routes. You need to have a new tool to manage BOMs. Traditional BOM management systems won’t survive in a modern manufacturing world. This is a wake-up call for PLM vendors and other software companies in the manufacturing world. Just my thoughts…

Best, Oleg

Image courtesy of [jsccreationsz] / FreeDigitalPhotos.net

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.

Recent Posts

Also on BeyondPLM

4 6
20 June, 2014

It has been a year since I published my How to select PDM system in 5 simple steps? Engineering.com article The...

16 June, 2010

Yesterday, I spent my day on Enterprise 2.0 conference in Boston. It wasn’t overcrowded, although Expo pass registration that included...

10 January, 2012

Integration is an important topic in PLM. Few days ago, I was reading Aras’ blog – Understanding of integration and...

30 January, 2015

We live in the era of changes. Think about the impact open source software (OSS) made on the software industry...

29 July, 2021

Usually, we speak about how PLM systems help to manage the lifecycle of products. Let’s turn things upside down today...

20 June, 2017

Cloud is a big buzzword, but as we know, there are so many flavors and colors of cloud technologies. The...

20 July, 2009

I think we are moving fast toward combination of virtual and physical worlds. How we can get closer and combine...

30 June, 2015

Do you remember what is “hard copy listing”? If you had a chance to write software programs in 1980s, you...

27 September, 2010

I posted PLM and Open Source Licenses few days ago. The main trigger of this post was Google’s announcement about...

Blogroll

To the top