How do I select an efficient BOM management tool for my Business?
The ultimate motive of any business is to manufacture quality products cost-effectively with the optimal usage of available resources. Here quality assumes significance for the product has to be good and match the expectations of the consumers, which in turn will ensure increased sales, greater profits and would eventually establish good brand reputation. It is here that the Bill of materials (BOM) assumes significance, for it is the first and foremost step toward designing a healthy shippable product leveraging the maximum benefits out of the available resources. In short this list of ingredients for the final product is the recipe which would help you accomplish all your production goals.
BOM - A comprehensive view of components & their relationships
If you are looking for means to streamline your business processes, ensure timely delivery of products, and effective product planning, production and delivery, an accurate and well managed Bill of materials is the starting point.
How do I Manage my MBOM?
Now that we have acknowledged the significance of BOM in the manufacturing industry (refer our earlier blog, Why is BOM not effectively used in SMEs), the next concern would be the selection of the right system to manage Bill of materials. A great deal of research has been done and huge amount of investment has been made in the quest to develop the right tool for managing the Bill of Materials. The selection of the right BOM management tool is specific to the requirements of your business. However there are tools that have been specifically equipped to help small to mid-size manufacturers effectively manage their Bill of Materials. When the selection of the tool to manage Bill of Materials is made it is important to look for key features that will help your organization efficiently manage product data and streamline the product development process.
- The BOM management tool should enable the BOM as a data framework, the single product data source for the entire organization which will be maintained centrally, effectively controlled and referred by all. It should maintain the revision history for reference.
- It should effectively integrate all the departments involved in the manufacturing procedure of your business to attain cost and time efficiency without compromising on quality and lead-time.
- It should help you organize better the Production schedule by linking the processes involved in the entire workflow.
- It should be an effective tool that brings together concerned departments in the organization like Purchase, Production, and Quality with the other important supply chain partners like your vendors and sub-contractors making them all integrated partners in product development.
Since a BOM is a complex collection of information about parts, vendors, manufacturers and the relationships between them using a spreadsheet will not be an efficient solution. The right ERP solution is the answer you are looking for!!!
Is ERP the right tool to manage Bill of Materials?.
Most rightly yes!!. The right ERP solution will integrate all the departments involved in the manufacturing procedure of your business to the BOM module and attain cost and time efficiency without compromising on quality and lead-time. Many a times it is found that different parts of the enterprise maintain their own representation of the BOM. This lack of a single source of product structure leads to very costly mistakes, reworks and delays. Once the Bill of Materials is maintained as a part of the enterprise resource planning software it serves as a single point of reference for the product structure across different departments. Each department refers to this single source of product structure and effectively performs its function. Based on the Sales Forecast projected by the Sales Module and the BOM structure the Purchase module allows your material planning program to schedule required materials to be available when the operation actually begins. This eliminates the shortage or non-availability of raw materials / components when the work order is scheduled to begin.
Maintaining your Bill of Materials as a part of an integrated ERP system ensures the maximum utility of having an accurate and comprehensive BOM. It doesn’t suffice to have a structured and well-maintained BOM it is essential to extract the maximum business results out of it. The successful functioning of your business depends on the effective interaction between its individual departments. This goal is achieved by maintaining your BOM as a component of a comprehensive ERP; this offers you a multitude of benefits:
- It will track necessary product changes and maintain precise lists of necessary components, there would always be an accurate bill of materials that can be referred centrally by all the concerned personnel.
- The module ensures that your organization has complete control over the product structure, by way of seeing to that all the departments integrated to perform the manufacturing process, gain access to the same information; thus, ruling out all possibilities for misconception.
- A BOM managed through an ERP will enhance inventory flow, improve material planning, and provide a strategic advantage to your company.
- A comprehensive ERP's Bill of Materials module will provide you a clear perspective of your Product, both from the Manufacturing and Financial standpoint. This allows you to achieve error-free planning of the entire process starting from MRP, processing PO, raising PO up till the production of the Product. It helps you organize the Production schedule by linking the processes involved in the entire workflow.
Keeping in mind the above advantages of maintaining your BOM as a part of an ERP system it is important to find the right ERP solution to meet your BOM management needs. Managing BOM through your ERP system will result in better management of inventory, material requirement planning, and finally provide strategic advantage for your business. Finally, if you are a manufacturer of products operating without a clearly documented BOM or maintaining your MBOM in a spreadsheet, a comprehensive manufacturing ERP would be your complete BOM management solution.