We frequently hear about organizations that rely on the “old” way of doing things to avoid the perceived risks and costs of implementing a new system. But when it comes to managing your product data, maintaining the status quo can cost you in the long run, while the risk of evaluating and embracing new systems is often rewarded.
The unexpected cost of mismanaged data
In a series of interviews with a small security device company, the manufacturing executives shared how their ineffective processes led to miscommunication and costly errors. Here’s the basic idea:
Sales landed the deal of the year – a multi-million dollar contract that promised to be a game changer. In the scramble to fulfill the order, ownership of the BOM was never claimed and changes were often made ad hoc by phone or email. Eventually, the “master” version of the BOM was so unreliable that executives were forced to run regular checks to make sure it reflected what the contract manufacturer (CM) was building.
When it was time to fulfill the order, Purchasing received one version of the BOM, while the CM received a different version. With so many different BOMs floating around, the company purchased $50,000 worth of parts from the wrong supplier and missed an important change order, which led to a large delivery of the original unmodified, unusable configuration. Ultimately the order was fulfilled, but revenue from the deal was eaten up by errors and delays.
Learning from the past to improve data management
After the dust settled, the company determined that storing product information in spreadsheets and sharing uncontrolled product data via email was no longer a viable solution. Although fine for documenting simple parts lists, Excel BOMs were unable to effectively document product changes or properly manage the critical handoff points – from engineering to operations and from operations to manufacturing and procurement.
While it’s impossible to erase past mistakes caused by improper documentation, organizations can fine-tune their processes and prevent expensive problems from recurring. In the case of the security device company mentioned above, the team learned from its mistakes and implemented better processes for managing product data and costs. Based on the improvement the company has seen, the executives we interviewed recommended the following three steps:
Step 1. Control your CAD. Take the time to configure a product data management (PDM) system vault to keep your CAD data secure and revision-controlled.
Step 2. Manage your BOMs. Invest in a collaborative bill of materials (BOM) management system (yes, full disclosure, like Arena) to ensure all parties are always working from the right version of the product record.
Step 3. Plan for the future. Plan to grow into business applications like enterprise resource planning (ERP) and manufacturing execution systems (MES).
Out with the old, in with the new
There’s no time like the present to consider a new way of doing things – it could save you more than time and money.