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Increased Revenue Growth Is Possible With Bill Of Materials Management

Because the bill of materials (BOM) is the core of any product development lifecycle, there is no question that if it’s managed efficiently, companies of all sizes and in all industries can grow their revenues faster than ever. Product lifecycle management (PLM) and BOM management tools offer a variety of ways to improve business processes and improve the quality of not only the product, but every level of the process. Let’s take a look at the entire product lifecycle and see how BOM management can help increase future revenue at every nuanced step.

We begin with conception, where the product is first imagined, specified, and planned.The product is defined based on the company’s vision, customer requirements, and what both the market and regulatory bodies require. The BOM begins is journey here, and BOM management tools via PLM will help make the initial organization process easier, and set the company up for better revenue goals. Many manufacturers that operate within another supply chain are expected, for example, to meetISO 9001 specifications—failing to do so would result in a loss of that relationship. By knowing this in advance, in addition to other regulatory requirements that need to be met, such as the European Union’s REACH/RoHS, ensure that the PLM can track compliance throughout the entire future product lifecycle.

Key players should also already be engaging in conversations about the BOM’s structure. Every product benefits best from a different hierarchy, and every organization operates in different ways, but what they share is the need to elaborate a plan for the BOM before design begins. PLM systems allow the use of hierarchies, or multi-level BOMs, although those aren’t necessarily ideal for every product. Multi-level BOMs create additional complexity but allow for more strategic sharing sub-assemblies with contract manufacturers, for example, whereas a flat hierarchy can be easier to manage, but doesn’t allow for deep relational arrangements within the BOM.

These levels of establishment, in addition to others, will help reduce future risk and complexity, and set a company up for increased revenue.

After the product is conceived, the lifecycle moves into design—a laundry list of complex actions, such as describing parts via the BOM, development in engineering, testing, validating, and more. Design operates best when all parties are aware that failure will happen, and that communication is the only means of converting failure forward momentum.

As engineers begin to work with CAD files and build out the BOM with all the required parts, it balloons in complexity, although it doesn’t have to be a nightmare to manage. Modern-day PLM will give engineers and other stakeholders everything they need to not only insert new items into the BOM, but also to alter the existing ones. Engineering change requests (ECR) allow engineers to notify others of problems and potential fixes, while engineering change orders (ECO) describes all the items that need to be changed within the specifications and the BOM. By ensuring that all key players are aware of ECRs and ECOs, and can comment or vote on them as necessary, PLM systems ensure the BOM is equalizedacross the board—critical to operational synchronicity, especially when so many engineering disciplines are involved.

Rich documentation and historical data becomes incredibly important—logging not only what changes were made, but also why, can help dramatically as the product moves out of design and into manufacturing.

As design comes to an end, the BOM makes its most important move yet: the move into manufacturing.This is where the quality of BOM management from the conception and design phases makes itself most visible. Manufacturing must decide on the tools it requires for production, how to manufacture those parts, and how to lay out the production. Even small mistakes in the BOM, or any unnecessary complexity in its organization, can equate to costly mistakes in tooling or supply chain management.

For example, a BOM that is not well-managed from the design phase might contain misinformation about a product’s physical dimensions. It may go through production unnoticed, or even quality control. Once that flaw is discovered, production must be halted until it can be re-configured, and there may already be issues with servicing customers and their flawed goods. All of these potential endings are revenue-killers, to say the least.Careful planning and extensive documentation, all managed through the BOM, will ensure that manufacturing moves smoothly—more than anything else, this will ensure a higher quality product, built at a lower cost, to push revenues higher when the product hits the market.

Assuming that manufacturing goes smoothly, the product is still out in the world, and companies must continue the lifecycle with the service phase. This can involve the need to provide customers and service engineers with information on maintenance, as well as waste management/recycling information.Again, this is where ample planning and documentation from the design phase, for example, can make integrating product information with maintenance, repair and operations management (MRO) software much easier. If end-of-life information is built into the BOM during the design phase, and integrated with compliance data, this equates to better customer relationships—and those equate directly to repeat purchases, long-term partnerships, and an increase in market share—all directly correlated to strong revenue pictures, both short-and long-term.

The difficult truth about BOM management and pushes for increased revenue is that hard work in the beginning of the product development lifecycle not only eases design, but reduces potential complications and complexities in manufacturing. But it doesn’t have to be difficult—take advantage ofPLM systems early, and reap the big rewards later.

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