Intelligent BOM Management Drives Manufacturing Success
Most manufacturing companies must rely on many supply chain partners to design and deliver products to their customers under budget and ahead of schedule. Dispersed teams must be able to easily access the latest product information anytime and anywhere. Keeping everyone on the same page is critical to reduce confusion throughout the new product development (NPD) and new product introduction (NPI) process.
Some companies rely on manual processes, point solutions, or spreadsheets to manage their product design, which includes a bill of materials (BOM) specifying all of the components necessary to make a finished product. However, modern product lifecycle management (PLM) systems are designed to provide intelligent BOM management with a single, centralized system in the Cloud.
The increased use of supply chains and contract manufacturers (CMs) underscores the need to leverage systems that improve how BOMs are created, shared, and approved between internal and external teams. This need to share product information with suppliers is further highlighted by the fact that the global CM market was valued at US$149.8 billion in 2018, with estimated expansion at a CAGR of 7% through 2026, according to Grand View Research.
So, manufacturers and supply chain partners must be able to work in lockstep to ensure the delivery of high-quality products. Having cloud platforms like PLM provides the best way to share the latest product design and BOM with all impacted parties.
What Is Intelligent BOM Management?
There are various systems that manage aspects of BOMs and two of those include computer-aided design (CAD) and enterprise resource planning (ERP). CAD systems typically provide siloed control of either mechanical or electrical designs and are useful for engineers. ERP systems take the final design, or BOM, that is needed to fulfill customer demand—but ERP focuses on material planning and production after the NPD process is over and the final design is approved. The NPD process is where the need to collaborate with all engineering, quality, manufacturing, and supply chain teams is critical to develop a product that can be sourced, built, and shipped effectively. NPD represents the make-it-or-break-it stage where heavy collaboration by all product teams is required to develop the final product that will eventually be passed to ERP.
Intelligent BOM management starts with centralized control of the entire product record and BOM comprised of electrical, mechanical, and software components. It includes the ability to easily pass the engineering designs from CAD to a single system like PLM. Once the information is aggregated, you must be able to share the latest BOM design with both internal and external partners securely to protect the manufacturer’s intellectual property (IP). Finally, the system should be extensible to upstream (e.g., CAD) and downstream (e.g., ERP) systems to reduce manual data entry errors as the product development process evolves from early concept to volume shipment of products to customers.
Indented bill of material (BOM) pictured above with revision detail
Eliminating Confusion With Suppliers
A great example of how intelligent BOM management helps manufacturers is Nutanix. Nutanix designs and manufactures hyper-converged infrastructure appliances and software-defined storage solutions. They had issues with their supply chain partners caused by BOM management processes that relied on spreadsheets and email.
Prior to implementing a PLM system, Nutanix’s Senior Vice President of Operations, David Sangster, shared that having “a wrong product number in your BOM can have a drastic negative impact on your quarter. With several people making changes and suggestions to uncontrolled documents, there were multiple revisions of the same BOM flying around the ether. No one had any trust in the data, so many local copies abounded based on the ‘mine is right’ premise.”
- Eliminated confusion regarding the latest BOM revision with supply chain partners to reduce scrap and rework.
- Streamlined engineering change and design processes.
- Reduced shipping delays and scrap to speed delivery of products to customers.
Accelerating Product Launches
Speed is critical in today’s global economy. Manufacturing companies must be able to eliminate issues that lead to product mistakes, quality issues, and shipping delays. Cloud PLM software solutions provide the best way to bring the mechanical, electrical, and software designs together for all product teams to share the latest design changes for BOMs. This, in turn, drives faster product release cycles. The return on investment (ROI) can be substantial. Nutanix streamlined their design processes to reduce engineering change review cycles from days to hours. By using Arena PLM to centralize product information and improve collaboration between supply chain partners, Nutanix was able to eliminate BOM errors and costly consequences.
Intelligent BOM management software streamlines NPD and NPI processes to accelerate product launches. Systems that support supply chain collaboration throughout NPD and NPI continue to advance rapidly. According to Gartner’s Managing Vice President, Steven Steutermann, “Understanding trends and impacts is a challenging task for supply chain leaders responsible for identifying and putting in place strategies to build the right set of capabilities. We expect that the supply chain of the future will undergo a major transformation process. At the end of this process, supply chains will act ‘on their own’ with the ability to self-regulate and take appropriate actions, and, as a result, will increase and augment the capabilities of humans well beyond what is known today.” That is the promise that intelligent systems like PLM offer—the ability to improve the capabilities of teams with solutions that increase visibility and transparency throughout product development.
Leveraging intelligent BOM management capabilities with Arena PLM eliminates disconnected silos and manual methods of collaboration that can cause product design and production mistakes. Arena provides the ability to not just manage the complete product design, but also offers connections to upstream and downstream systems like CAD and ERP to avoid manual data entry mistakes and speed handoffs between engineering and manufacturing teams.
If you need to work with distributed teams and suppliers, you need to be confident that everyone is collaborating around the correct BOM revision throughout the entire product lifecycle. There is no need to rely on manual processes or siloed tools that lead to confusion and uncertainty. Cloud PLM offers intelligent BOM management to help complex product companies deliver innovative products fast.
Does your existing BOM management solution or approach offer a single place for all teams to collaborate in real time? Assess your current solution and make the intelligent choice when choosing a BOM management solution.