Choosing the Right BOM Management Software

Posted on 8th Jan 2021

As a product idea moves from conception through prototype and production, a well-managed bill of materials (BOM) is a critical part of the product development process. To properly manage the BOM, most organizations select a BOM management software solution to help ensure the most current product revisions are seen by all members of the production team.

What is a Bill of Materials?
When it comes to building a product, the bill of materials is the single most important deliverable that an engineering team hands off to a manufacturing team. At its simplest conceptual level, the BOM is a list of parts needed to create a finished product. In real-world usage, however, the BOM is not just a parts list—it is a complex collection of individual pieces of information and the relationships between them. In addition to describing a wide variety of parts and how they relate to one another within a product, the BOM is also a vendor list that specifies how huge sums of money are spent.

The importance of the BOM is widely recognized in the manufacturing community and billions of dollars have been spent to develop tools that help support the management of BOMs throughout the design and manufacturing process.

Why is a BOM management tool important?
Most companies using spreadsheets quickly realize that using a bill of materials software system improves control and enables secure sharing of the latest revision of the product record with their internal teams and external supply chain partners. The engineering project manager, who must estimate costs and analyze engineering tasks, is generally the first member of the organization to compile the BOM. The manufacturing department, which uses the BOM to build the product, is not often involved in the creation of the BOM. This handoff can present a challenge if the parties giving and receiving product data are not on the same page. A BOM management tool can help combine input from engineering and manufacturing teams and ensure both teams work from the same product data.

As the design process moves from early development through the handoff to production, a BOM can become increasingly complex and difficult to maintain—especially for organizations that do not have a proper BOM management tool. Frequently, engineering project managers have to create and maintain several versions of the BOM to meet the needs of different audiences, including engineers, contract manufacturers (CMs), Printed Circuit Board (PCB) design services, and other vendors. Without a dedicated BOM management tool to handle continually evolving versions of the BOM, product data sharing can be a time consuming and tedious task, not to mention error-prone.

Because some organizations choose not to implement a BOM management tool, serious consequences can come from poorly managed BOMs. For example, if management does not have a way to access product costs during the development phase when at least 70% of product costs are determined, an organization can miss cost-saving opportunities.

Additionally, it becomes more difficult for the design team to collaborate with the supply chain and one another. Finally, the company retains little of the knowledge assembled during a product’s development because it has no way to organize the information and no place to store it. This can present major problems down the road.

What to look for in a BOM management solution
There are tools specifically equipped to help small to mid-size manufacturers with their BOM management needs. When looking for a BOM management tool, it is important to invest in a tool that will support both short-term and long-term product development strategies.

Three key features to look for in a BOM management tool
In order to ensure that a BOM management tool will help an organization efficiently manage product data and streamline the product development process, an organization should select a BOM management tool with the following key features.

Firstly, it is important that the BOM management tool empowers the BOM as a data framework, so it can serve as the single product data source for the entire organization in a single location. Secondly, it should place the BOM into a collaborative workspace so that design team members can work with the data in a structure that encourages progress, creates visibility, and enables smoother operation throughout the design chain. Lastly, the tool should be accessible outside the boundaries of the organization, so that the design chain and supply chain become integrated partners in product development.

A BOM management tool that combines these three elements will improve the efficiency of the bill of materials for individual users and overall data sharing across all levels of the supply chain.

Does Excel work as a BOM management tool?
In almost all organizations, from single-person consultancies to Fortune 500 corporations, the engineering BOM is initially created and maintained in a spreadsheet tool like Excel or Google Sheets.

While this may be a good place to start, spreadsheets are not ideal BOM management tools. A BOM is a complex collection of information about parts, vendors, manufacturers, and the relationships between them used by a wide variety of people within the enterprise and throughout the supply chain.

Because of the inherent complexity of BOMs, efficient BOM management demands a multi-user, relational database that can support a multitude of data types, entries, and relationships and can be accessed by everyone who needs to see it—regardless of their geographic location. Since a spreadsheet is neither multi-user nor relational, using one as a BOM management tool creates a severe mismatch between the tool and the task.

By: Arena Solutions