Why is effective bill of material management critical to digital transformation? What should you look for in a BOM management solution? Our white paper serves as a reference tool for manufacturers selecting a system to improve the maturity of their BOM management practices.
Please enjoy the summary* below. For the full buyer’s guide please visit our sponsor, PTC (registration required).
This white paper is an update to our original buyer’s guide published in 2020.
Table of Contents
- Introducing the Buyer’s Guide
- Diagnosing BOM Management Issues
- The BOM Management Status Quo
- The BOM Management Business Case
- Analyze BOM Management Solution Capabilities
- Assess Service Requirements
- Consider Vendor Requirements
- Special Considerations
- About the Author
Introducing the Buyer’s Guide
Managing Bills of Material (BOMs) is a fundamental need for any manufacturer. Without effective control of product structures, companies struggle with inefficiency and errors. On the other hand, improving the maturity of BOM-related processes helps manage complexity, increase product personalization, improve efficiency, prevent mistakes, and enhance collaboration across departments and the supply chain.
The resulting benefits can be strategic, leading to increased innovation, agility, and faster time to market that impact top-line financial performance. BOM management is now essential as the foundation for the digital enterprise and serves as the backbone of the digital twin. Effective BOM management is also critical for manufacturers to confidently change products to adapt to market challenges like chip shortages and supply chain disruption.
This Buyer’s Guide is a reference tool for manufacturers selecting a system to improve the maturity of their BOM management practices. The guide is composed of sections covering software, service, and vendor requirements, along with some special considerations. These are all important factors that impact implementation success and ROI.
Each of these sections includes a checklist with key requirements to investigate when selecting software to enable and improve BOM management. The guide also touches on special considerations for companies to keep an eye on by industry. It also shows how digital BOM management plays a critical role in supporting digital transformation initiatives, including the digital twin, digital thread service transformation, Industry 4.0, and more.
Analyzing BOM Management Solution Capabilities
Perhaps the most obvious place to start when evaluating new software solutions is functionality. This section covers multiple types and uses of product structures, including Engineering BOMs (EBOM), Manufacturing BOMs (MBOM), Service BOMs (SBOM), and others such as those used for simulation or compliance analysis. For the purposes of this analysis, we’ve broken BOM management into seven main focus areas:
- Developing product structures
- Managing revisions and change
- Supporting product variability
- Associating information
- Transforming BOMs
- Visualizing products
- Reporting, analyzing, documenting
It’s important to recognize that these requirements are in addition to the basic needs of managing product data, as most companies will extend their PLM environment to manage BOMs. These solutions provide platform capabilities such as access control and IP protection that serve as a critical foundation for effective BOM management. These basic capabilities for managing data can be found in our PDM Buyer’s Guide and include controlling, accessing, and sharing product data:
- Controlling and securing product-related data
- Quickly finding and reusing information
- Sharing product knowledge with other departments (and beyond enterprise boundaries)
Create / Develop Product Structures
Perhaps the obvious place to start is with the ability to define BOMs. It’s important to be able to easily develop product structures of different kinds, including EBOMs, MBOMs, and more. We’ll discuss these in more depth in the “Transform” subsection.
Clearly, a user should be able to enter a BOM manually from a screen by selecting a combination of materials, components, or lower-level assemblies. Systems should also be able to accept and validate an input file, for example, a spreadsheet or XML file, to import / upload BOMs from another system or in a “mass load” scenario. Finally, the system should be able to develop BOMs from underlying engineering tools for efficiency and to prevent manual transcription errors, also known as the “bottom-up” approach.
Of these, the most complex scenario is the bottoms up creation from a Computer Aided Design (CAD) tool. This scenario requires the BOM management solution to digitally interpret the contents of the CAD structure. CAD systems typically contain a lot of information about a product, making good CAD integration a primary need.
BOM management helps manage complexity and streamline operations. It provides an important, foundational element that serves as the backbone for all engineering, manufacturing, and service activity. An accessible, trusted source of product structure information is valuable and improves traceability and control.
Effective BOM management provides enterprise-level benefits, improving business performance and alleviating disconnects across the business. The net result is efficiency and cost gains combined with revenue improvement from better collaboration and faster time to market, making BOM management an essential operational tool and a key driver of improved profitability.
Supporting BOM management at the enterprise level requires the right solution. Companies should develop a requirements list that helps encourage a holistic decision encompassing software functionality, service-related needs, vendor requirements, and any special considerations based on their industry, size, and product strategy. Finally, the plan should look beyond current needs to support the digital future where the Digital Twin, Digital Thread, AR, VR, and IoT rely on sound BOM information.
Based on industry experience and research for this report, Tech-Clarity offers the following recommendations:
- Think big, but remain agile and take BOM management improvement in steps
- Recognize the importance of accurate, complete, timely, and accessible product structures
- Develop a comprehensive, multidiscipline, and multi-CAD BOM management capability
- Look for functionality, but extend requirements to vendor and service considerations
- Look for a Cloud / SaaS solution to reduce risk, ease adoption, and ensure vendor market competitiveness
- Consider any special needs for your business, industry, or geography
- Provide the foundation for the digital enterprise to compete today and into the future
- Get started
This summary is an abbreviated version of the research and does not contain the full content. For the full research, please visit our sponsor PTC (registration required).
If you have difficulty obtaining a copy of the report, please contact us.