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Using Bill Of Materials Management To Put Scrap And Rework To The Curb

In a product development lifecycle, miscommunications often lead to scrap. One famous example? In 1999, NASA lost the Mars Climate Orbiter because its team programmed key operations in the metric system, while its collaborators at Lockheed Martin used English units. The end cost for all that one miscommunication? $125 million and years of work.

While this might feel like a special case, the truth is that manufacturers too often find themselves having to scrap and rework their products because of miscommunications that should have been caught earlier. The bill of materials (BOM) rests central to this discussion, because proper BOM management, thanks to sophisticated product lifecycle management (PLM) systems, should completely eliminate these threats, whether they exist across the supply chain, or between two engineers who share a cubicle wall.

How does this work? BOM management tools ensure that every key player in the product development lifecycle is working from exactly the same platform. And that goes a long way in eliminating the need to scrap and rework, which are analogous to waste. And all smart manufacturers know that waste isn’t something that can simply be leftat the curb and forgotten: it costs money.

A lack of BOM management, even within a single organization, can cause major headaches if there is miscommunication, or simply a lack of communication, between engineers. For example, in order to ensure that a part maintains compliance with a regulatory requirement, one engineer makes a change that seems benign, whereas it actually creates a cascading effect that alters the entire product. Because there is no BOM management system in place to ensure this change is recognized,the product might move into manufacturing without that issue being addressed. The company spends a great deal of time and money in building out tooling and planning out the plant floor, only to realize the end product is flawed due to poor quality. This creates scrap, forces the company to step back in the development lifecycle to figure out a different solution. All of this, of course, adds heavily to the overall cost of a product.

BOM management, even within organizations, can falter if the systems are not robust enough to ensure that all changes are tracked, histories are maintained, and all key players involved in a particular part are not notified of a change that affects them. This can happen often with Excel-based BOMs, but if that same company were equipped with PLM and BOM management, that one engineer’s seemingly-benign change would have been recognized by other key players, and they could have taken the necessary action to alter other parts as needed, or even roll back the change until a better solution is found.

This issue isn’t relegated only to internal communications, as almost all product development cycles, particularly in today’s economy, involve a supply chain. The greater the network, the greater the likelihood for de-synchronization around the BOM. This can manifest itself in multiple ways, and on both sides of the equation, in communication and collaboration.

Without BOM management systems in place, changes to the BOM might not be communicated throughout the supply chain fast enough. The BOM might also be communicated improperly, as the only options for translating the information are mail, email, fax, or phone call—all of which are error-prone for a variety of understandable reasons. Perhaps the vendor will misunderstand a change to the BOM, or will forget to merge the newest version before going home for the night.

Collaboration with contract manufacturers and vendors can also be troublesome without BOM management. Ensuring secure access to the BOM itself is difficult enough, but oftentimes, contract manufacturers must modify their own designs. If this information is not collaborated on correctly, these modifications will cause a need for significant rework, particularly after manufacturing has already begun.

With business moving as fast as it does today, either of these mistakes can directly translate to the wrong version of a part being built, or a flawed part, or one that fails to meet internal or external compliance requirements—particularly relevant for firms in electronics, food and beverage, and medical manufacturing. And incompatible parts create unreasonable tallies of scrap.

Instead, BOM management systems centralize the BOM to ensure that every member of the supply chain has visibility of the most up-to-date information from wherever they are—and that visibility is managed, secure, and instantaneously-updated. This means no more phone calls or emails to see if BOM changes have been reflected at a contract manufacturer, and this means that all parties are internally responsible for adapting to approved changes. This also allows members of the supply chain to make markups to design files, or even the BOM itself, whenever their own processes require it.

Scrap and rework might feel like inevitabilities in your product development lifecycle, but like all other costly mistakes, they can be easily mitigated by establishing proper BOM management throughout a product development lifecycle. By ensuring the BOM has proper visibility and accountability, communication and collaboration hiccups are nearly eliminated from the equation. Because success in product development is not all about getting to market fastest:successful organizations work quietly and efficiently, and leave the smallest amount of waste in their wake.

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