Undoubtedly, Bills of Materials (BOMs) are the lifeblood of manufacturing organizations. They represent core product information that constitutes the backbone of Product Development and Manufacturing, as well as finance, procurement, marketing and sales, dealerships, re-sellers, etc.
Effective BOM management encompasses series of attributes that enable seamless business data integration and effective decision making:
- Accuracy: ensuring quality of information upstream to reduce rework and mis-build downstream.
- Accessibility: providing, querying and locating the right data, in the right format, visible to the right people at the right time.
- Traceability: understanding where data is coming from, what standards are being used, what parts or components are critical, how they interrelate, what stage it is at, how it is being produced or compiled, who has contributed to its creation, how it will be consumed downstream, by whom, and for what purpose.
Establishing effective BOM assumes that the above parameters are defined, understood, and optimized. Information consumed from a ‘single source of the truth’ can be sliced and diced as required by the receiving party. This assumes that the requirements of the different relevant business functions have been taken into consideration to refine BOM management processes. Maintaining effective BOM requires a Product Life-cycle Management (PLM)strategy that is fit-for-purpose for the business to sustain and growth.
Bringing BOM practice to a best-in-class level implies a continuous improvement approach to understand the business strategic requirements and improving processes at source. As a matter of fact, it probably takes two to 10 times as much effort to deal with the lack of accurate information as it would to just fix the problem in the first place.
The focus is on the proactive aspects of what “really needs to be done” and not on the reactive aspects of getting the information into the system.
The 5 critical success factors for establishing and maintaining effective BOM include:
- Get the information into the system as early as possible, accurately and visible as required.
- Follow a robust process to manage change, at every stages of the life-cycle, upstream and downstream, and for every change types of the business.
- Understand and focus on interfaces, dependencies, common requirements, economies of scale and economies of scope.
- Automate creation, reporting and dashboarding as required and where possible, but consider manual optimization rather than full integration or automation.
- Continuously re-use, improve and optimize – it is an iterative process to get it right repetitively and consistently; make it part of the culture.
What are your thoughts?
This post was originally published on LinkedIn on 9 July 2015.