In the discrete manufacturing sector, the bill of materials (BOM) is a fundamental piece of product data that exists throughout the major stages of a product’s life cycle. According to Wikipedia, BOM is the term used to describe the raw materials, parts, subcomponents, and components needed to manufacture a finished product. Simply speaking, BOM is just a list of all materials needed to be assembled together into a product. The concept is clear and simple, and it doesn’t seem to be a difficult task to manage BOM, especially when we have a powerful tool—software—in hand. However, this is true only when the product structure is so simple that not much collaboration is needed to develop the product, when consumers are delighted to have the same products that everyone else has, and when design, engineering, and production are performed under the same roof. The truth is, during the past few decades, the landscape of the manufacturing sector has changed dramatically, and it is still changing at a rapid pace.
Collaborative Product Development
As time moves on, products become not only more complicated in structure, but also impossible to develop exclusively by a single department. In fact, developing a product is now a corporate-wide activity that involves almost every function of a company, from strategic planning, to sales and marketing, to after-sales services.
To see how things get more complicated, we don’t even need to look at all the participants. Let’s stay with three functions—product design, engineering design, and production—for a while. At the time when the product design department finishes its work, a design BOM will be generated. Ideally, this BOM will be carried throughout subsequent processes. However, this is not very likely to happen. For example, a single part created by product design team might be modified into two parts by the engineering design team for the feasibility of production; when the production team receives the production order, it might decide to use another material (which also meets the requirements) to produce the parts, since there is a large amount of this material in the stock due to a cancelled order.
The differences among the design BOM, engineering BOM, and production BOM create inconsistency of product data along the product’s life cycle, and sometimes increase product cost and time-to-market. Besides these three types of BOM, there are also customer BOM, sales BOM, maintenance BOM, cost BOM, etc., all used for different purposes, making things even more complicated. One way to resolve this problem is to bridge the information gaps on a constant basis under the change management mechanism, which is a fundamental functionality within the product lifecycle management (PLM) solution.
Mass Customization
To meet the increasing demands of consumers that want more personalized products without significant increases in price, many manufacturers now practice mass customization of products ranging from automobiles to computers—even apparel. Modular BOM is one of the enablers for mass customization. It defines the components needed to produce a subassembly, and provides cost information for each component and “rolled-up” cost for the overall subassembly. Nowadays, one product may many configurations. If computer systems store each possible configuration as an independent BOM, BOM maintenance becomes almost impossible.
Configurable BOM is another enabler for mass customization. By using this BOM, buyers and manufacturers can create “end-items” dynamically. Based on this configurability, Quote-to-order (Q2O) solutions (sometimes known as configure, price, and quote, or CPQ) enable manufacturers to mobilize their mass customization initiatives. These systems can reduce time-consuming quoting and ordering processes, decrease unit costs, and lower sales costs.
Collaborative Product Development
As time moves on, products become not only more complicated in structure, but also impossible to develop exclusively by a single department. In fact, developing a product is now a corporate-wide activity that involves almost every function of a company, from strategic planning, to sales and marketing, to after-sales services.
To see how things get more complicated, we don’t even need to look at all the participants. Let’s stay with three functions—product design, engineering design, and production—for a while. At the time when the product design department finishes its work, a design BOM will be generated. Ideally, this BOM will be carried throughout subsequent processes. However, this is not very likely to happen. For example, a single part created by product design team might be modified into two parts by the engineering design team for the feasibility of production; when the production team receives the production order, it might decide to use another material (which also meets the requirements) to produce the parts, since there is a large amount of this material in the stock due to a cancelled order.
The differences among the design BOM, engineering BOM, and production BOM create inconsistency of product data along the product’s life cycle, and sometimes increase product cost and time-to-market. Besides these three types of BOM, there are also customer BOM, sales BOM, maintenance BOM, cost BOM, etc., all used for different purposes, making things even more complicated. One way to resolve this problem is to bridge the information gaps on a constant basis under the change management mechanism, which is a fundamental functionality within the product lifecycle management (PLM) solution.
Mass Customization
To meet the increasing demands of consumers that want more personalized products without significant increases in price, many manufacturers now practice mass customization of products ranging from automobiles to computers—even apparel. Modular BOM is one of the enablers for mass customization. It defines the components needed to produce a subassembly, and provides cost information for each component and “rolled-up” cost for the overall subassembly. Nowadays, one product may many configurations. If computer systems store each possible configuration as an independent BOM, BOM maintenance becomes almost impossible.
Configurable BOM is another enabler for mass customization. By using this BOM, buyers and manufacturers can create “end-items” dynamically. Based on this configurability, Quote-to-order (Q2O) solutions (sometimes known as configure, price, and quote, or CPQ) enable manufacturers to mobilize their mass customization initiatives. These systems can reduce time-consuming quoting and ordering processes, decrease unit costs, and lower sales costs.
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