Bill of Materials is one of the most fundamental elements of design, engineering and manufacturing data. The topic of BOM is usually very controversial and leads to the question – what specific aspect of BOM or what BOM are you talking about?
The reality of bill of materials data models is that it should reflect a variety of BOMs available in the company – design, engineering, planning, manufacturing, as-built, as-support and many others.
You should think about PLM BOM model as a integration medium that can combine all bill of materials together. In fact, most of PLM data models are doing exactly that – providing multiple views of Bill of Materials. You should assess data model capability to handle exact BOM requirements you have in a company. It related to the type of product and type of engineering and manufacturing process
Multiple Dimensions of BOM complexity
Bill of Material topic is getting more attention these days. No surprise. BOM is a center of universe in manufacturing (and not only) world. People can disagree about terminology applied to BOM management. Depends on a specific domain people can call it part list, specification, formula. But at the same time, everybody speak about the same BOM. Actually, not always the same BOM. I guess you’ve heard about variation of Bill of Materials – eBOM, mBOM, xBOM, etc. The amount of abbreviations in BOM is growing and often can cause confusion.
The importance of BOM management is growing as well as tension around who owns bill of material. Historically, people in different departments disagree about the way they manage bill of materials. As a result of that, departments are splitting and cloning bill of materials to get control and managing it in different systems. It leads to the need to synchronize and copy BOMs together with changes. The tension around BOM management is growing.
The “war” has generally been about linking product development with shop floor IT and the BOM certainly plays a key role in this. Right now there are four primary participants on the battlefield: Siemens, SAP, GE/PTC and IBM. The complexity of “universal BOM” solution and potential advantages of winning BOM battle is dependent on many functions. It’s not a simple job to manage a BOM. What might appear as ”a list of parts needed to build a product” is today a complex reality of multiple levels, diversified disciplines and BOMs contains information about structures, electronics, integrated software, manufacturing methodology and the way products are maintained and even disposed of. There are many sources of error and mistakes can be very costly.
I created the following diagram showing 3 main dimensions of BOM complexity: Disciplines, Lifecycle, Changes.
1- Multiple disciplines.
The complexity of product is growing these days. Even for very simple products it goes beyond just mechanical and electromechanical design. It includes electronic, software and goes to services and deliveries. Engineers are using multiple tools to create design of products in each discipline. To combine everything together is a very challenging task.
Design represents only one phase of product development. It must be manufactured, shipped, supported and (after all) re-furbished or destroyed. All these processes are going in parallel and requires sophisticated interplay in data and activities. How to connect requirements with design, plan and optimize manufacturing and run support services? This is only a short list of tasks that requires BOM orchestration.
3- Changes (ECO/ECN…).
Nothing is static in this world. People are making mistakes. Communication failures happen. Suppliers are going out of business. All these events generate changes that must be applied into different stages of product development – design, manufacturing, services.
Bill of Material management reflects one of the most complex disciplines in product development and manufacturing these days. The time when companies managed BOM on the shop floor cork boards are gone. Future BOM management systems will have to be much more sophisticated, integrated and to support multiple dimensions of BOM complexity.
Four Pillars of Every BOM Solution
I suggest you an experiment. Invite two engineers and ask them to provide a definition for some of PDM/PLM related terms. I’d not be surprised if you will get more than two definitions. It is not unusual to spend lots of time during PLM software implementation meetings to define terms, language and meaning of things. Regardless of terminology, I found BOM to be a central element in every product development organization and business. It contains a recipe of your product, process and, at the end of the day, becomes a lifeblood of your product development processes. Thinking about BOM management solution, I can see four major things that need to be defined, discussed and clarified.
BOM and Part Lists
Bill of Materials (BOM) is a list of all items required to make a parent item. It includes components, raw materials and sub-assemblies. You may also include intermediate items identifying in-process elements to facilitate planning and other manufacturing processes. Depends on industry, people can call BOM differently. For example, in process industry, it can be called recipe or formula. Opposite to BOM, Part List is usually a term used to call a single level list for a specific level of assembly or sub-assembly.
This is one of the most tricky defined terms in a whole product development and BOM management story. Here is a short definition. Part Number (PN) is an unique identifier that identify a single object in bill of material. However, the trick is how to define object and how to keep it consistent with your processes. Assigning part numbers is often complicated and one of the most discussed topics. The traditional definition of FFF (Form, Fit and Function) helps to identify the right objects. Interchangeable parts, substitute items, special parts – this is only a short list of issues that comes into the discussion around part numbering process.
Think about navigation system with the road between different places. Now imagine part numbers. Routing is a roadmap that defines the path of part numbers across manufacturing floor by specifying workstations and labor time associated with every station. Usually routing applied to manufactured parts or items.
Drawings represents a significant part of history and confusing engineering habits. Historically, drawing is the place where people put bill of materials for a product. It also solves the problem of Bill of Materials distribution in the company. At the same time, BOM on a drawing brings lots of disadvantages. In many situations, people don’t need drawing, but only need bill of materials and/or part list. Another point of confusion is numbering system. The discussion is about applying part numbers on drawings. In most of the situations, it represents the limitation of systems used for product development (PDM/PLM). To separate between Part Numbers and Document Numbers is the most reasonable ways to manage it, in my view.
Regardless of what systems you plan to use, I recommend you to have cross-department organizational discussion about these four pillars. Usually, it helps to understand product development processes. Engineering and manufacturing are two main organizations usually involved into BOM processes. To clarify terms will give you a tremendous value during PDM/PLM system implementation and integration with ERP.
A discussion about BOM ownership is probably one of the longest in the industry. It goes back to many things related to practices of BoM management across departments and functions. Any implementation of enterprise PLM is facing this challenge. Pumping BOM between PLM, ERP and other systems is costly and complex process. But the reality – this is the only practical way we have today
The alternative to multiple BOM management and data pumping is single BOM, which I will discuss later in this chapter. Following single BOM paradigm you can make BOM synchronization problem less painful. Some people prefer to call it “associated BOM”. Companies have spent a lot of time and effort making logical connections between different BOMs, and developing tools to help develop and synchronize different BOMs. Usually PLM solution helps companies translate an engineering BOM into a manufacturing BOM and then further into Process BoM. Later in the book we will talk about requirements and concept Bill of Materials. These are all workarounds to the the real answer of single BOM. At the same time, single BOM or Associated BOM is hard. It requires many points of synchronization between departments and processes. Most of companies are not ready to implement Single BOM and we will discuss why later.
Before going into any future discussions about how to optimize Bill of Materials data, I suggest to make an alignment about who is actually owning BOM in a company. I tried to visualize the picture of different BOMs and present it together with how PLM and ERP ownership is distributed. Take a look on the picture below.
There are places where each system claims their benefits. At the same time, there are places where ownership of bill of materials and related product information can be different. The touch point is manufacturing BOM. Data ownership was a fundamental part of any enterprise business strategy for the last 20 years. Changes in PLM industry and implementation should lead towards changes in the model of BOM ownership to achieve better data transparency and data synchronization.
Modern BOM Management Challenges
Bill of Materials. Probably the key element in product development and manufacturing. Surprisingly enough, many companies are still struggling with this topic. Bill of Materials drives lots of controversy and discussions. Why it is so important? On a surface you may think BOM is a really simple thing. Just a list of components. However, if you think about product development, BOM is a recipe for a product that you are designing, engineering, manufacturing, supporting and disposing. I’ve been thinking about modern trends – cloud, social, mobile, consumerization and others. In my view, they are going to impact Bill of Materials management functions in a much radical way than you may think initially. Today I want to focus on what I call 3 modern challenges affecting and impacting Bill of Materials.
Challenge 1: Internet and lean manufacturing processes
Internet is probably the biggest change that happened to us during the past 20 years. It drives changes in the way we work. Connected and lean. Lean processes means a simplified process organization in a company. Ordering systems are changing as well. Simplified materials flow and reducing of shipped items and prefabricated assemblies create a different requirements to BOM functions. BOM hierarchy becomes less important. The completeness of BOM during the process sometimes not required and sometimes can be managed on demand driven by online ordering systems. The main two elements of functionality – BOM structure and approval process are disrupted now. The number of bills can be increased, at the same time, since number of orders will be growing as well.
Challenge 2: Customization and “new makers”
There is a strong trend to personalization and customization. It comes everywhere – electronic, computers, fashion, etc. To manage all possible configuration becomes very critical. The number of configuration can grow significantly. The flexibility of systems needs to be increased. What yesterday was true for ETO (engineering to order) company only, today becomes a reality for many mass manufacturers. In most of the cases, you will need to create a separate BOM for each customer order. “New makers” – companies that are capable to manufacture small amount of very specific products are trending as well. People like to be unique products. The new manufacturing firms (sometimes very small) are experiencing additional pressure on how to proceed with the design and manufacturing. Large and complex BOM/PLM systems cannot help them.
Challenge 3: Granularity and contract manufacturing
Price competition leads companies to find somebody else to produce some of the components. It leads to outsourcing, offshore and many other options to make the same work in a different place. Bill of materials is a critical element in supporting of contract manufacturing. You need to have an ability to organize BOM in a way that allows you enough granularity and at the same time makes engineering and manufacturing BOM much simpler. Ability reconcile multiple bill of materials and support new type of change processes becomes even more important.
Bill of Materials is a critical element in the success of many manufacturing companies. Think about driving maps. In the past we printed it on a paper, folded and put next to your driver seat. Now it is different – social GPS systems can alert you about driving conditions and suggest alternative routes. You need to have a new tools to manage BOMs. Traditional BOM management systems won’t survive in a modern manufacturing world. This is a wake-up call for PLM vendors and other software companies in manufacturing world.
How to Optimize Bill Of Materials
Multiple BOM concept is a fundamental way to implement BOM management in many enterprise systems – PDM, PLM, MRP, ERP, etc. However, it brings many complication. Here I want to share some ideas how to revise BOM management systems towards usage of one consistent BOM. This is not a ready-to-use recipe, but some guidance that help you to create you BoM management strategy.
Function oriented BOM
The simple definition of BOM is not functional. The wikipedia article about BOM defines it a list of raw materials, parts, components and sub-assemblies required to build a product. In my view, you can see many BOMs in organizations reflecting “product structure” as a main driving behind how BOM organized. As a result of this, many companies are experiencing difficulties with operations and processes that involve these BOMs. Opposite to that, you should think about BOM from a functional standpoint. Form of BOM follows functions. The final form of the BOM or structure of the BOM is a reflection of what we want the BOM to do.
Wide Company Usage
Very often BOM starts in a single department. The compartmental organization logic made BOM separation very natural. When it is done, you feel pain relief, since you think it removes cross department conflicts about BOM structure. However, it is not true. It hits you back immediately when you start planning your cross functional processes. BOM needs to be structured to support the way product will be manufactured. Also important to include business view by structuring BOM around end items that imply some business view on a product you are creating.
Part numbers and Documentation
Don’t mess with these two main groups of identification parameters. Don’t try to combine them. Build BOM around part numbers and think about how to simplify the relationships between Parts and Drawings. The complexity of these relationships will make your future change process messy and complicated. Traditionally, BOM ends up in the drawing sheet. It was in the past. With massive adoption of 3D CAD systems and computer automation, you can re-think it. Managing part numbers is a separate topic that I will address in another post.
Modules and Flattening
Use grouping techniques to create part of BOM that can be easily handled and replaced. Use logically combined parts that belongs to specific configurations. It will help you to simplify your ordering system. Modern tools allows you to deal with hierarchies much easier. However, think twice before you introduce an additional level in BOM hierarchy. Flat BOM is much easy to handle. It is very important to create a BOM structure that allows you to run change processes as easy as possible. Analyze your change processes upfront.
The simplicity is an ultimate sophistication. It is very easy to create a complex, hierarchical BOM structure trailing all 3D CAD structures as well as engineering structures. However, to make a simple BOM that can be used by all department is not a simple task. Think bottom up – first about function of your BOM in terms of what you are manufacturing, second about change processes and only after about BOM structure (form). Just my thoughts…
5 “Don’ts” for Bill of Materials Management
BOM is fascinating. Companies are managing Bill of Materials in so many ways. At the same time, I want to outline few typical mistakes you want to avoid when designing and implementing bill of materials solution in your company. These topics are not necessarily reflecting PLM system. You can face the same problems when implementing BOM solutions using Excel spreadsheets, homegrown DIY data management and large ERP solution.
1- Don’t use significant numbers for Part Numbers – Use Classification
The discussion about “significant” vs. “non-significant” part numbers is probably endless. If you are new in this discussion (or just came out of computer science college), a significant Part Number looks like this 60-44-FN400587-60-NM-40-DWG-CHI. The information in this number is coded and different groups of this number are representing different meaning. Is there something wrong here? No, it is absolutely fine to have significant part number. Even more, if you are still using Excel spreadsheets or legacy data management system, this is probably the only way you can do it. However, it is complicated and eventually will lead you to mistakes. These days, most of PLM systems will provide you with the easy way to use insignificant part numbers. One of the features of good data management system is advanced classification mechanism. Such type of mechanism will help you to define all meaningful terms and characteristics of your Parts, Assemblies and Materials.
2- Don’t use supplier’s part number – use own Item Master number
When working with suppliers, you may decide to use supplier’s part numbering schema. Especially if you are small company, it sounds very reasonable and it can simplify the communication with suppliers. However, this is a wrong thing to do, in my view. Again, PDM / PLM system maintaining item master record with cross-reference mechanism between parts and supplier part numbers can easy solve this problem and simplify your life in the future. What will happen with your system and processes if supplier will decide to change their number schema one day? it will be probably a very complicated day for you. So, use your own item master numbering schema and don’t rely on suppliers.
3- Don’t use the same ID for Part Numbers and Drawing Numbers
This is another question often asked during implementations. To use the same number for items and for drawings as well as process sheets, specification documents, etc. Initially sounds like something that could be simple enough to support and manage, can potentially lead to significant complexity and limitation in managing of change processes. The same drawing can be used for different part numbers. At the same time, changes of part numbers related to materials, stock, etc. won’t require drawing changes. Keep separate numbers and manage relationships between them is a good data management practice to follow.
4- Don’t be afraid to use extra part numbers
Identification is a very important mechanism. Sometimes, the assembly process is quite complicated and requires some temporarily pre assembled elements of the equipment to be maintained separately. In addition, you might have materials such as service parts, replacements, process result chemicals, etc. Bottom line – you don’t want materials in your bill to fly without identification. Everything needs to be included into the bill. Today’s data management systems are powerful enough to manage “extra Part Numbers” to identify everything you need in your bill.
5- Don’t put Bill of Materials on the drawings
Another topic coming from historical usage of paper drawing. In the past, it was the only way to share information. Obvious decision back that days was to put Bill of Materials on the drawing list. In modern digital life, such practice can create a lot of complications and additional procedures (such as updates of drawing when only part list will be changed). The good practice today is to keep cross reference links between drawings and bill of materials. It will allow you to manage your changes process efficiently and optimize your and your company time.
Control and efficiency. These are two important words to remember when you deal with Parts, BOMs and Documents. Many processes in this space were developed in the past and can trail lots of complexity if you not update them to “digital era”. To streamline processes and make change management simple are important goals to following when creating the foundation of your BOM management solutions.
Single Bill of Materials in 6 Steps
The idea of “single BOM” is not new. I’ve heard about it from many companies. At the same time, people often confused by the name and thinking about single BOM as as single structure (BOM) used in a company to represent the data about product. This is a mistake to think about single BOM as a single structure. It is more a way to think about consistent Bill of Materials information that can be shared across the company. In my view, this is a clear paradigm shift from what we know today as “multiple BOMs”. How to move from well-known multiple BOM paradigm to single BOM? If you are PLM manager, IT or implementation service company, you need to be prepared for the discussion that will involve all organizational stakeholders. I will try to identify steps in the discussion about single BOM. I identified 6 steps – structure, part numbers, extensions, end items, ECO and BOM sharing with some comments.
1- Structure: Phantoms, Modularization, Planning Bills
The “beauty” of multiple BOM strategy is in segmentation. In your silo, you decide how to organize Bill of Material. Historically it gave a lot of advantages. By trying to combine it together, you can face discussions about how to create BOM compartment to fill a particular process and/or organization needs.
2- Part Numbering
One of the fundamental conversation about BOM is related to Part Numbers. In the past, discussion about part numbering schema raised lots of controversy. Many companies historically tied to using so-called intelligent part numbers. Be prepared to switch towards something more easy and straightforward. The process of Part Number assignment is also very important.
3- Specific extensions to the BOM
Each company has their own little secrets about what to add/exclude items to BOM. In most of the companies, this is a place that will be very hard to transform. The discussion about adding “nuts and bolts” as well as some other specific materials to BOMs can be endless. Be prepared.
4- End items
Large amount of end items can make your BOM strategy very cumbersome. The sales and business people need to take a part in this discussion. In most of the cases, you can delete end items and switch to the strategy to use options for the same purpose.
5- How to deal with ECO?
The question of dealing with engineering changes is critical. You need to have an ability to make a change easy without restructuring of BOMs (or, at least, with a very small effort). The ability to find a way to present ECO process will be critical. Another critical process to clear is new product introduction.
6- BOM sharing
The effort to create a single BOM experience is useless if you cannot share BOM holistically in an organization. If people are not accessing the same model, the same data at the same time it will destroy the idea of a single BOM.
Depending on the nature of your business, one of these topics can become a key and showstopper for your organization to transform into the single BOM. Some of you will disagree of structures and some you will not have a system to share BOM across the organization. The multi-BOM paradigm evolved during many years as a result of fundamental organization silos. However, these days, the efficiency how organization can resolve the problem of connected cross department processes is a dominant one. BOM is a lifeblood in these cross-department processes. If you switch to a single BOM, you have an opportunity to optimize processes.
Why Companies are Not Ready for Single BoM
The complexity of Bill of Material management comes as a result of the process, which is happening around BOM during design, engineering, manufacturing and support. What defined as “different types” of BOM, in reality, representing people, teams, department and sometimes different tools and enterprise solutions. Single BOM is a great idea in my view, but it is still facing many complexity during the implementation.
A modern BOM often includes a complex set of structured items… Even after the first product is built, the BOM will continue to evolve. There are many reasons for that – potential bug fixes, design improvements, part substitutes, or supplier switches. The main challenge in this process is to maintain multiple BOMs in different systems. So, the idea of single Bill of Materials can be easy materialized to solve the complexity of synchronizations.
However, companies are repeatedly failing to establish a single Bill of Materials to manage product information in a consistent way across multiple departments and lifecycle stages. I asked myself a question – why so?
I can identify 3 main reasons why it happens:
1- Companies are using variety of tools to design, build and support products. Single platform PLM is probably a dream that not going to be materialized. In most of the companies, multiple design tools (including CAD), product data management and ERP systems are creating a complicated eco-systems with many rules and dependencies.
2- Because of specialization, people are not interested to switch from specialized and tailored tools to somewhat less functioning but common. The change is complex, can lead to potential delays and involvement of IT in system deployment and data integration. People prefer to bump BOM between systems rather than use a single tool.
3- It is hard to agree on how to share a single structured set of information (single BOM) among multiple teams, department and organizations. To develop export/import functionality as well as multiple synchronization services is, unfortunately, the mainstream decision taken by many companies.
I think, companies need to have a single, sharable, structured BOM representation reflecting all aspects of product development. PLM vendors applause to the idea of single database, but most of the integration and data synchronization tools and techniques are still very premature. In addition to that, PLM vendors are usually trying to lock customer to a single platform solution preventing independent and open bill of material storage. So, all together it blocks customers from migrating their infrastructure and system towards “single BOM” implementation.