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Bill of Materials

Four ways to increase productivity with better BOM management

By     OCTOBER 21, 2016

Be more productive

Bill of materials (BOM) management through product lifecycle management (PLM) systems have a bevy of benefits, such as aiding compliance or reducing the degree of scrap, but there are few benefits with more potential value than increased productivity. When companies are scrambling faster than ever to beat their competition to market, increasing productivity, even fractionally, can be the difference between being first, and being something other than first. BOM management helps increase productivity in a variety of different ways, but four areas are particularly achievable for any organization: collaboration, automation, flexibility, and hierarchy.

 

Collaboration: Any product development lifecycle requires collaboration and communication between various departments and key players, but even simple disagreements can have catastrophic effects down the line. Oftentimes, product design, engineering, manufacturing, and supply chain players all have different theories on how to manage the BOM—for example, maintenance BOMs are implemented within the ERP system, while design BOMs are created within the PLM. When the product’s complexity grows, so does the need to micromanage changes to both of the BOMs, or develop better integrations between various software silos, or retroactively make necessary changes—all reducing any potential to increase productivity.

BOM management, with a single, consistent BOM within the PLM, is critical to finding these productivity increases. Important to this process is businesses understanding that the BOM is more than a list of parts needed to build a product—the reality of today’s manufacturing means that BOMs contain information about software, manufacturing, disposal information, maintenance information, and complex electronics. By agreeing to a BOM hierarchy that works for every department that touches it, key players can more easily collaborate because they are working from common ground, and via a common language.

 

Automation: Micromanagement. Panicked phone calls. Confusion. Frustrated emails. These might sound familiar to companies that aren’t managing their BOM from a single point in the enterprise. If BOM management doesn’t happen automatically, small changes, even those emerging from somewhere on the supply chain, can have wide-reaching effects. For example, a vendor experiences a manufacturing delay and doesn’t have stock of a necessary part, and that information isn’t forwarded to the right people within your organization. Without that, they can’t begin to plan in advance, or make key changes to the product to accommodate a different part.

With BOM management, all changes are disseminated to all stakeholders automatically via the PLM system, meaning there’s no more checking in with various stakeholders or ensuring that they have the new information they need to move forward, or have responded as required to a change that affects their portion of the product development lifecycle.

 

Flexibility: Successfully managed BOMs will allow certain degrees of flexibility, which manifest in not only some previously-mentioned areas, such as negotiations between departments, but also in the capacity to respond at-will to events both inside and outside of the organization. For example, good BOM management involves the specification of acceptable part substitutions for any given part of the product. The capacity to designate alternatives means there is built-in contingencies for various market movements that are out of the organization’s control.

Organizations might find the need to rapidly increase production due to consumer demand or, if they operate within a supply chain themselves, demand from their customer. If demand dictates doubling production over the course of a few months, having those alternatives in place from the beginning, and integrated into the BOM, means upmost productivity in meeting new expectations and delivering on time. Organizations without this kind of flexibility will find themselves constantly searching for alternatives, and creating contingencies on the fly, which absorbs time that could be spent elsewhere, and leaves the organization open to additional risk in scrap and quality control.

 

Hierarchy: Modern-day PLM systems allow for companies to use multi-level BOMs—think nesting parts or items in order to organize multiple assemblies, not unlike folders in a computer’s file system—but whether or not to actually use them for increasing productivity depends on the type of organization, and what product development it will engage in. The BOM structure should always reflect the type of work that needs doing.

A mechanical engineer, for example, might prefer to use a multi-level BOM, so that a certain sub-assembly can be utilized in multiple product designs, which reduces the need to re-engineer similar parts. Product development that uses off-the-shelf parts, however, might necessitate a single-level BOM, with no hierarchy, thereby making the BOM a little easier to manage overall. If one deals with a contract manufacturer, it might be advantageous to use a multi-level BOM and share only that sub-assembly’s information to protect intellectual property and minimize the risk.

Some argue that deep hierarchy allows a team to be more flexible in finding alternatives to potential problems, others argue that single-level hierarchy ensures that the BOM never becomes unmanageable in its complexity. Both methods can increase productivity—businesses must figure out which organizational strategies best fit with their engineering disciplines, supply chain makeup, and overall organizational structure.

 

And that is true of all four of these categories of BOM management—the PLM system does not force any one methodology on the product development lifecycle. It simply enables organizations to use them if they so choose. Using PLM to enable a centralized BOM will already increase a company’s productivity, but delving into the nuances of a PLM system’s features, particularly in the beginning of the product development lifecycle, will equate to productivity gains are guaranteed to be game-changing.

– Tyler Beck, Technical Marketing