How Can I Make BOM Creation and Management Easier with a Cloud Solution?

 

Introduction

A bill of materials (BOM) is a comprehensive list of raw materials, sub-assemblies, intermediate assemblies, sub-components, parts, and the quantities of each needed to manufacture an end product. The creation and ongoing management of BOMs is a critical aspect of product engineering and manufacturing. However, the complexity of BOMs coupled with reliance on manual methods like spreadsheets often makes BOM processes inefficient, error-prone, and difficult to scale.

Transitioning BOM management to the cloud can help streamline workflows, improve accessibility and collaboration, and provide other benefits that alleviate many of the traditional BOM challenges. This article will examine the key ways that cloud-based solutions can make BOM creation and management significantly easier for manufacturers.

Benefits of Cloud-Based BOM Management

Cloud platforms provide a centralized hub for BOM data and offer many advantages over legacy on-premises systems:

1. Improved Accessibility & Collaboration

Storing BOM data in the cloud allows instant access from anywhere, on any device. This makes it easier for cross-functional teams to collaborate on BOMs in real-time without being tied to specific workstations. The improved accessibility also enables better collaboration with supply chain partners.

2. Enhanced Data Management

Cloud platforms provide robust capabilities for BOM data management. This includes features like data validation, automated syncing across systems, version control, change logs, and full audit trails. Data integrity and security are also enhanced.

3. Scalability

Cloud systems easily scale to accommodate data growth and fluctuating demand. BOM management processes can scale seamlessly without large capital investments into on-premises infrastructure. This scalability makes supporting rapid business growth much more achievable.

4. Integration & Customization

Leading cloud BOM solutions integrate readily with existing business systems like ERPs and PLM. Many also provide APIs, SDKs, and other tools to customize and extend functionality to meet unique needs. Far less coding and integration work is required versus on-prem solutions.

5. Lower Total Cost of Ownership

Cloud platforms significantly reduce the cost and resources needed for BOM management via lower IT overhead, elimination of capital expenditures, and fewer integration and maintenance costs. The subscription-pricing model also provides predictable operational costs.

Key Features of Cloud BOM Software

To fully realize the benefits of cloud BOM management, solutions should provide certain key capabilities:

Centralized BOM Repository

A centralized database to store, manage, and control BOM data from a unified interface while facilitating collaboration across departments and with supply chain partners.

Automated Data Syncing

Ability to automatically transfer BOM data between connected enterprise systems like ERP and PLM instead of inefficient manual rekeying. This maintains data integrity and a single source of truth.

Access Control & Security

Features to control access and permissions at a granular level to meet security and compliance requirements. Activity logging, version control, and backups further protect data integrity.

Custom Reporting & Analytics

Custom reporting tools empower users to extract key insights from BOM data. Analytics capabilities like inventory optimization, cost analysis, and risk detection provide additional intelligence around BOMs.

Automated Notifications & Workflows

Event-driven notifications and approval workflows related to BOM changes streamline new product introduction (NPI) processes and change management activities.

Data Validation & Process Enforcement

Capabilities to validate BOM data against standards and enforce consistent workflows improve quality while reducing errors. Template support further drives standardization.

Integrated Supply Chain Collaboration

Functionality permitting controlled BOM collaboration and information exchange with external supply chain partners for better alignment.

API Support & Customization

Configuration options, open APIs, and integration toolkits enable the platform to be customized to support unique processes, extend functionality, and integrate with existing systems.

Steps to Streamline BOM Processes with a Cloud Platform

Transitioning to cloud-based BOM management involves careful planning and execution. Here are best practice steps manufacturers can follow:

Step 1: Build a Business Case

• Quantify current BOM challenges like inefficiency, quality issues, lack of collaboration, scalability constraints, and risk of errors.
• Estimate potential benefits across key metrics like time/cost savings, revenue gains, risk reduction, and improved supplier relations.
• Make the case for change to leadership and secure buy-in.

Step 2: Define Requirements

• Gather input from all departments to understand needs around BOM collaboration, reporting, integrations, security controls, and desired workflows.
• Prioritize must-have versus nice-to-have capabilities for the solution.
• Develop high-level technical requirements around integration, customization, and scalability.

Step 3: Evaluate Solutions

• Research leading cloud BOM software solutions against defined requirements.
• Request demos and trials of top choices to validate functionality and ease-of-use.
• Consider options for software-only, fully managed, or mixed approach.
• Develop ROI and TCO models for solutions under final consideration.

Step 4: Make Selection

• Select the best-fit solution that meets key functional needs, provides the strongest ROI, and aligns with IT strategy.
• Negotiate final pricing and contractual terms and conditions.
• Develop high-level project implementation plan/timeline.

Step 5: Onboard Solution

• Provision cloud environment and complete base software configuration.
• Establish initial integrations between BOM platform and core enterprise systems like ERP.
• Develop data governance policies and access controls aligned to security requirements.

Step 6: Migrate BOM Data

• Extract legacy BOM data (e.g. from spreadsheets or a legacy system) and transform into the format required by the new platform.
• Load cleaned BOM data into the cloud solution using bulk import tools.
• Validate successful data migration through spot testing and reporting.

Step 7: Drive Adoption

• Deliver training to users on new BOM processes and software capabilities.
• Actively support departments during onboarding onto the platform.
• Refine policies and capabilities based on user feedback.
• Track adoption metrics and continue change management activities to drive utilization.

BOM Management Use Cases Enabled by the Cloud

Cloud BOM systems empower manufacturers to transform a diverse range of BOM management processes:

Engineering & Product Design

• Central master repository for latest product BOMs with full revision history
• Automated propagation of BOM changes to downstream departments
• Secure collaboration with external design partners

Manufacturing & Production

• Digital shop floor instructions driven by cloud BOM data
• Live production material requirements planning based on up-to-date BOMs
• Visibility into BOM component lead times and availability

Procurement & Supply Chain

• Shared BOM portal for suppliers to receive latest component specifications
• Automated BOM data exchange to enable drop shipping
• Early supplier collaboration on component engineering

Service & Aftermarket

• Access to as-maintained BOMs to optimize service parts planning
• Field tool to instantly check installed BOMs at customer sites
• Linkages between service BOMs and engineering master BOMs

Costing, Pricing & Quoting

• Accurate cost rollups and tracking of real-time component pricing
• Simulation of cost impacts from pending BOM changes
• Automated generation of quotes from latest product BOMs

Compliance & Quality

• Full traceability for change management, asset management, and audits
• Automated BOM compliance checking against standards
• Issue tracking and CAPA tied to BOM configurations

Overcoming Challenges of Cloud BOM Management

While they provide tremendous potential benefits, cloud BOM platforms also come with some potential implementation challenges to manage:

Legacy IT Integration

Integrating cloud BOM data across legacy on-premises systems can involve API development and systems integration work. A phased rollout focusing first on priority integrations is recommended.

Change Management

Getting users to adopt new BOM processes usually requires overcoming entrenched practices. Sustained training and involvement of change champions can drive acceptance.

Information Security

Special care must be taken to safeguard sensitive BOM data in the cloud. Measures like encryption, multi-factor access controls, and rigorous third-party audits are required.

Limited Customization

Cloud solutions have less customization flexibility than on-prem apps. Focus must be on configuring vs. coding new functionality.

Contingency Planning

Backup plans for an inability to access the cloud BOM system must be developed, such as temporary revert to legacy platforms or offline data access.

Expert Tips for Cloud BOM Success

Experienced IT leaders and industry analysts provide these top tips for maximizing the results from a move to cloud-hosted BOM management:

• “Take an agile, phased approach to implementation focusing first on pain points and high value-add processes.”
• “Secure executive sponsorship and build cross-functional buy-in at both leadership and user levels.”
• “Invest upfront in cleansing and standardizing BOM data within legacy systems prior to cloud migration.”
• “Start supplier collaboration on BOMs early in the product lifecycle to improve downstream quality and responsiveness.”
• “Develop a long-term data integration strategy instead of taking just a quick one-off approach.”
• “Approach cloud BOM management as an enabler of digital transformation across the product lifecycle versus an isolated software implementation.”
• “Utilize the flexibility of cloud BOM platforms to continuously refine and optimize processes versus settling for a static ‘one-and-done’ setup.”

Frequently Asked Questions

Here are answers to some commonly asked questions about improving BOM processes with cloud software:

Q: What are some typical challenges companies face with current BOM management methods?

A: Common BOM challenges include fragmented data in siloed systems, spreadsheet sprawl, lack of accessibility and collaboration, insufficient version control, manual handoffs between departments, and inability to scale processes with business growth.

Q: How long does it typically take to implement a cloud BOM system?

A: Implementation timelines vary based on scope and requirements. However, most initial phases for a core BOM management rollout can be completed in 8-12 weeks if executed in an agile manner with sufficient resources.

Q: What are some key integration points for a cloud BOM platform beyond ERP and PLM?

A: Other common integration touchpoints include quality management systems, manufacturing execution systems (MES), CAD tools, product data management (PDM) tools, supply chain management systems, and aftermarket/service systems.

Q: Can cloud BOM solutions support compliance requirements like AS9100 and ISO9001?

A: Yes, leading solutions are designed to support compliance by providing features like full audit history, version control, access controls, and digital workflows. Custom configurations can strengthen compliance capabilities as needed.

Q: How does pricing work for cloud BOM platforms - subscription, user license, transactional?

A: Most solutions are priced via annual subscription models based on the number of users supported and sometimes the amount of data transactions or storage as well. Perpetual licensing is far less common for cloud software.

Conclusion

In today’s complex and fast-paced product engineering environment, outdated BOM management practices can significantly hinder operational efficiency and cross-functional collaboration. By transitioning BOM systems to the cloud, manufacturers can gain centralized data, improved accessibility, enhanced automation, and advanced analytics. This can help transform BOM processes to overcome longstanding challenges and pain points. With careful planning and a phased rollout approach, manufacturers can successfully harness the many benefits of cloud BOM software to gain a substantial competitive advantage.