What to Look for in a Bill of Materials Software

Do you run a manufacturing business and struggle to maintain the right amount of production inventory? Does shortage of raw materials or components often hamper your production process? Or do you have to order parts and components at short notice and bear expedited shipping charges?

Not only do issues such as these hamper production but they also increase costs, lead times as well as chances of manufacturing errors and defects.

Managing inventory is particularly tough for businesses that manufacture complex products or have frequent design changes. No longer can they rely merely on spreadsheets or engineering drawings.

How can they overcome these challenges and maintain optimum level of inventory?

To begin with, they need to effectively manage the bill of materials.

This is a comprehensive document that lists all the materials, components and sub-assemblies along with their part numbers, descriptions and quantities required. It provides a structured breakdown of all materials needed to assemble the final product and thus serves as a detailed guide for the entire production process.

The bill of materials also facilitates coordination in the manufacturing setup. By referring to this document, different teams – design, procurement, production and quality control – can synchronize their activities and stay on the same page.

How to Manage BOMs

You now know that BOMs can streamline the entire production process. But how do you ensure these BOMs are accurate and managed correctly?

Traditionally, manufacturing enterprises used paper records and spreadsheets for this purpose. Conventional ERP and product lifecycle management (PLM) systems have replaced spreadsheets, but still do not offer accurate and updated BOM data to sourcing and procurement teams due to a lack of integration. Access control, duplicate entries and inability to track versions lead to design and production defects, delays and cost spikes.

With advanced BOM management software, different teams can work on sourcing and procurement of BOM items in real time. Such a system can integrate and consolidate data, such as specifications, drawings, documents, cost breakdowns and supplier information from disparate sources, into a centralized, multilevel BOM.

What to Look for in BOM Software

Here are a few must-have features of the right BOM software:

• Complete visibility:

Get comprehensive visibility of all BOM items throughout the product life cycle. BOM software can leverage large datasets to generate visual analytics on component lead times, costs, supply risks and compliance status. Real-time stock visibility of all items on the BOM helps optimize inventory, shortens lead times, prevents stockouts and reduces storage costs.

• Cloud-based low-code platform:

Advanced BOM software is built on a cloud-based, low-code platform that is easy to deploy, access and update. Procurement professionals without any coding expertise can leverage the intuitive interface to construct and update BOMs with speed and accuracy. They can work closely with other teams and gain insights into inventory levels and component availability.

• AI-driven functions:

Advanced BOM solutions are today powered by artificial intelligence, machine learning and natural language processing. They enable automated part classification, vendor recommendation, duplicate identification, information extraction from spec sheets and prediction of future component demand. They can also learn from past procurement data and suggest the best suppliers, pricing, and lead times for different components in the BOM.

• Easy access:

Get access to all BOM data in a single, unified platform. With such an arrangement, you can manage all source-to-pay activities – sourcing, contracting, procurement, supplier management – of complex, multilevel BOMs with ease.

• Greater collaboration:

With the right BOM software, internal teams and external stakeholders can access all BOM data in one place. They can work quickly with simplified workflows and easy data synchronization from multiple enterprise resource planning (ERP) systems and product lifecycle management (PLM) systems. They can also have real-time insight into design changes and component specifications.

• Improved innovation:

BOM software enables product design and manufacturing teams to use the right materials to build better products and do this faster. With technology handling mundane tasks of matching product builds with materials availability, teams can invest more time in strategic and innovative endeavors. This creates opportunities to create better products and release them to the market faster.

In addition to the above, users can leverage technology to improve sourcing processes. For example, they can use the ‘what-if’ functionality to analyze make-versus-buy scenarios or identify viable material substitutes. They can also analyze cost breakdowns of different BOM versions to make informed sourcing decisions.

The biggest advantage is synchronization between all stakeholders. Seamless communication helps manufacturing, product design and sourcing teams share information and prevent any delays in production.