You’re likely to have experience with Bill of Materials (BoMs) if the nature of your business has anything to do with product development.
Let’s talk about why bill of materials are so important, how BoMs impact business, and the best BoM management practices. Or check out another helpful article on BoM management, “How BoM Management plays a role in your PLM processes“.
The importance of bill of materials
BoMs define products as they are designed (CAD or engineering bill of materials), as they are ordered (sales bill of materials), as they are built (manufacturing bill of materials), and as they are maintained (service bill of materials).
They incorporate product information from design and engineering, document control, operations, manufacturing, purchasing, contract manufacturers, and more. Bill of materials influence inventory levels, material purchases, shop floor assemblies, and so much more.
In fact, departments often rely on BOM records to get the job done right. Whether you realize it or not, your BoMs drive and affect your businesses’ operational success. This is why it is so important that your organization creates and manages well-organized, correct and up-to-date bill of materials.
BoM information accuracy and why it matters
BoMs require complete and accurate information, in order to successfully benefit design, manufacturing, sales and service building quality products.
The accuracy of BOMs influences an organization’s ability to make well-rounded product development decisions. These decisions fundamentally impact the efforts organizations peruse to generate a product in the most efficient, cost-effective way.
Oftentimes creating BOMs requires input from design, procurement, manufacturing, and sales. Using manual methods to collect and enter items on various BoMs increases the risk of producing inaccurate, out-of-date, or even possibly duplicate BoM versions.
Furthermore, if departments produce products based on incorrect or inaccurate bills of materials, delays to market can occur. This can not only be very costly for an organization, but it oftentimes impacts an entire supply chain.
Inaccurate bills of materials are one of the costliest errors engineering companies can make. In order to avoid the risks of inaccurate BoMs, many organizations have started to reevaluate the way they create, manage, and share product information.
BoM management processes
Bills of materials (such as eBoMs, sBOMs, mBoMs) are most-likely part of your product development process. That being said, what are your current processes for managing those BoMs?
How do you share, collaborate, and ensure the accuracy of your organizations’ bills of materials? Do you find it difficult to manage the differences between them and keep the data consistent across eBOM (engineering bill of materials) and mBoMs (manufacturing bill of materials)?
Odds are if you have yet to implement technology solutions to manage your bills of materials, your methods for BoM management most likely involve spreadsheets, emails, rekeying information, and multiple other systems of communication.
If this is the case, don’t worry – you’re not alone. Studies show nearly 50% of product development companies still use spreadsheets (or sometimes even nothing at all) to manage complex bill of materials!
Despite the big workload that BoM management represents, many organizations are still comparing bills of materials in excel spreadsheets or by opening separate BoMs and manually connecting the dots. This management approach is not only tiring, but it also increases risks of human error and mistakes, especially if the bills of materials are very long.
In fact, is not unusual to find one giant excel spreadsheet on top of information managed by PLM (product lifecycle management), ERP (enterprise resource planning), CRM (customer relationship management) and other databases. Why is that? The information required to assemble bill of material documents tends to reside within separate, disconnected enterprise systems.
It’s time to change that.
Connecting business systems and information
In a world of complex, role and department-specific enterprise systems, productivity can seem quite limited. But the truth is, with the help of technology, businesses no longer need to operate this way. Collaborative solutions exist, and they really are as simple to implement as they, well… should be.
System integration tools (such as applications) change the way organizations create, manage, and share product information- without even having to upgrade or change current enterprise systems.
Using system API connections, applications can pull data from disconnected enterprise systems and consolidate it into centralized dashboard display windows. In fact, many integration applications are even ready to go straight out-of-the-box (yes, this means they require absolutely no special configurations or complicated implementation at all).
For instance, productivity apps offer simple, role-based access to data and other enterprise systems making it easier for stakeholders to view and understand consolidated product information and data. What makes simple applications that integrate enterprise data even better is the fact that most of these system collaboration tools are even affordable.
With a single view to into multiple enterprise systems (such as ALM, MRP, ERP, SLM, CRM, Accounting, and PLM) you can be sure that users have access to the latest and most accurate product information when they need it, and how they need it. There’s really no catch. Productivity apps really are solutions that are; easy, affordable, and that solve the complexity of dealing with multiple disconnected enterprise systems.
Effective BoM management & bill of materials software
Parallel to system integration apps that can pull and consolidate enterprise data, BoM applications can also automatically consolidate real-time data across enterprise systems.
This means organizations can enable real-time BoM collaboration – and that is a game changer.
Real-time BoM collaboration empowers users with capabilities to collaborate and work together creating a bill, sharing BoMs and associated data, and even preview CAD drawings and images. It also opens up the ability to simultaneously edit manufacturing bill of materials, while completely avoiding duplicate and inaccurate documents. This enables users to get a virtual ‘live view’ of data.
Users are able to maintain and manage all associated product documentation such as part datasheets, materials required, CAD drawings and files, as well as anything else that is needed to manufacture a product all in one centralized location. This reassures one sole accurate and revision-controlled bill of material for a product.
This is exactly why it is so important to establish systems and methods that enable all departments within your product development process to be able to share, collaborate, and ensure the accuracy of your bills of materials.
A simple bill of materials software
Our experts at EAC Product Development Solutions recognized the need for better BoM management within many organizations- That’s why we created our bill of materials software application, BoM Reports.
Our BoM Reports PLM application is essentially an out-of-the-box PLM system plugin. It’s easy to use, simple to integrate, and an extremely affordable for any organization.
We designed our Bill of Materials Reports application with the intention of making manufacturing bill of materials and engineering bill of materials management ‘easy’ for organizations of all sizes. Meaning- our bill of materials software can even work for small businesses!
Our BoM Reports app delivers access to your accurate bill of materials database while it provides visual representations, cost rollup for materials, and detailed informational listings of items within bill of materials.
We guarantee our BoM Reports application will enhance your bill of materials management. In fact, it has changed the way many of our customers do business.
Our EAC Productivity app enables purchasers to see product cost roll-ups during design, so they can hit cost targets. It allows project managers to see the highest level status and availability of constituent parts so they can keep projects on time and budget. It helps fabricators see what version of parts go into the build so they can prevent scrap and rework- and SO much more!
We’re excited about how our organization is enhancing product development and we would love to share more information with you about how our EAC productivity apps really work.
If you would like more information about apps that could work for your business insert your information below. We promise not to fill up your inbox with overloads of information, we simply want to share tips, tricks, and tools that will help your organization succeed.
The process of capturing, documenting, and agreeing on requirements for product change or development takes on an entirely different scope for companies engaged in Engineered to Order (ETO) businesses. While these requirements are generated internally for Make to Stock (MTS), Assemble to Order (ATO) and Configure to Order (CTO) product lines the ETO business relies on external sources. While everyone is familiar with the formal Request for Quote (RFQ) process, very few engagements will adhere to this. More likely, is a process of starts and stops requiring many man-weeks, months and years. The ability to efficiently; quote, process, develop and ultimately deliver an ETO solution is dependent on the enterprise’s ability to capture just enough information at the project’s inception to describe the product criteria, but not overly constrain the design team. Many a post-mortem analysis has revealed very small or non-existent margins from “specials”. By attending to the requirements at the project’s inception and ensuring that those requirements are of sufficient depth and breadth to quote and create specifications, scope creep can be prevented and margins preserved.
A requirement is a capability which the product or project needs to incorporate. For standard products, these are developed over time by internal teams during the ideation phase of product development. The design and associated intellectual property are then developed as the project moves from ideation to fulfillment. While this may describe the development of Intellectual Property (IP) for an ETO business, a different front-end is followed for ETO solution delivery. As soon as the opportunity is identified by the sales team data (requirements) capture begins. At an advanced maturity state, this data will be entered into the Customer Relationship Management (CRM) application with the correct associativity and visibility to the downstream (application engineering, procurement, etc) functions. More often than not the customer contact data and a subset of the original notes will be entered. Another set of data is now stored in notebooks from phone calls and meetings. As more people become involved during the wooing and quoting phase more set of notes are created and NOT captured or associated formally to the opportunity. Eventually, a quote is generated for the solution and delivered to the potential customer. It is at this point where the troubles can really begin. As the quote is iterated the data behind the iterations and the associated cost implications do not have as stringent review as the originals. When the project is finally won the margin has usually been eroded significantly from the original intent even before development starts. During the quote iterations, technical oversight of the requirements is minimal. This causes the potential solution being quoted to deviate from a variant of a previous design to the requirement to develop entirely new designs. The effect is that the time estimates for the original design are now terribly inaccurate and the project won have been underbid. If aware, most companies will choose to “eat” some of this as development time. The problem is that most companies are not aware of this and schedule resources around original project estimates instead of the last iteration of the quote. Now the pressure on the development team is substantial, to meet the new product deliverables at the same time allotted for the original quote.
To combat this, rules and guidelines governing the boundaries for the solution need to be put in place. These guidelines can be as simple as size and complexity constraints or for often quoted, complex designs, configurators can be employed to accurately capture application data. At the very minimum templates for customer data need to be developed and used to accurately capture the customer’s data. The templates need to be established with clear boundaries so that the correct oversight is employed as the quote is developed. As important, is maintaining the data as the quote is iterated. All data needs to be readily available to the enterprise for use during all phases of the project as well as reference material for similar projects. Associating the original customer data to the quote and any subsequent design files will enable the organization to comprehend the effects changes will have on the overall project. This data associativity and transparency will help to maintain the intended margin and ensure the project stays on track.