Single Bill of Materials (BOM)?

Single Bill of Materials (BOM)?

My earlier article How to make BOM integrations easy? raised a lot of debates online and offline. It was quite overwhelming. I appreciate everyone who reached out to talk and share your opinion and experience of managing Bill of Materials, integrating BOMs in different stages of the product lifecycle, and connecting Bill of Materials to various processes and systems. And I found the discussion remarkably connecting to the topic of “single BOM”, which I was discussing earlier. The story of a single BOM is controversial at the very fundamental level. Going back to my Munich presentation in 2016 and following debates, it is clear to every company that managing the data about the product is a complex task that involves many organizations and processes. But, many companies are still missing the point of having an organized data management service to represent the Bill of Materials in all its stages and complexity.

For the last few years, I’ve been involved in many discussions with small and large manufacturing companies about their practices and tools to manage product information, including Bill of Materials. Some of them are using multiple complex on-premise tools (PLM, ERP, and others). Some of them are using Excel’s/spreadsheets and actively looking at how to migrate to online SaaS data management tools.

To have a single source for BOM and product structure can give a lot of benefits, but it is still a very challenging task. After talking to hundreds of people and companies, here is my conclusion about what are the top three reasons that make a single BOM organization hard.

1- Silo Thinking

Unfortunately, companies are thinking in “silos”. This is a very easy way to think. Mechanical, Electronic, Software. Then go engineering, manufacturing, maintenance, sales. For larger companies, it can be locations, join ventures, subsidiaries, etc. People don’t like shared responsibilities and therefore isolate the silo to protect themselves from a dangerous impact. Each person or department builds a silo to live and manage the data. But these companies eventually are missing the goal.

2- Legacy Systems

The reality, especially in large companies, to have a set of existing systems to manage product information – PDM, PLM, ERP, legacy databases… you name it. The status quo for many years was to separate functions and less thinking about the importance of the data. The last thing changes- the data is a new oil now and all companies understand that. But to change from the systems with a lot of investment and move on is hard. The decisions are not happening fast and simple, companies slow down and repeat the same mistakes again – continue to build legacy systems.

3- Technological limitations

To create a data representation for multiple lifecycle stages and different views that will be able to represent the data for different sub-systems and departments is a very complex data management task. It is much easier to scope the data in silos. The additional complexity is organizational because the processes sometimes are spanning across multiple companies, which brings a set of collaboration challenges. Most of the data management techniques used by PLM platforms are old, limited to SQL databases, and not scaling well. There is a clear need for a modern data management solution capable of supporting complex multi-disciplinary data structures, multi-view and multi-tenant data access control. So, data modeling is hard, and modern multi-tenant cloud architectures, polyglot persistence data management has an opportunity to introduce a better way to manage product data that nobody can do as of today.

What is my conclusion?

To make a single source BOM and connect all pieces of information together for design, engineering, manufacturing, procurement, maintenance is possible. But it still requires a substantial transformation in people’s minds and in technology. Most of the old PLM tools are not capable of accommodating multiple sources of information easily and companies need to make a lot of “data massaging” to bring the data in and to manage it as a single source of BOM information. Those industrial companies that made it using existing technologies are clearly outperforming companies living in silos. But to make it work in the current state of tech is hard and it requires a lot of planning and “hard wiring” to achieve the desired level of reliability, data management, and process efficiency. The technological gap combined with the gaps in human understanding of how to grasp the idea of a single BOM makes it hard. It is a time to think about organizational transformation and adoption of new technologies. It will allow us to make substantial progress. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networksMy opinion can be unintentionally biased.


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