Why single BOM is not the answer for you
Recent posts on bill of materials (BOM) like Oleg's 'Will PLM Manage Enterprise BOM,' make me remember my first conversation about BOM management. It was when I was in charge of IT in a mid-size manufacturing company. Then, and now, Procurement Specialists said that BOM should live in ERP, Engineering Managers said it should live in PLM, Engineers said that it should live in spreadsheets, and PLM vendors said it should live in PLM. This is where today’s BOM problems start.
Pictured: Mercedes speed automatic transmission by Braham
Establishing the status quo
The problem is that people share the same paradigms which were popular when their PLM products were created over 20 years ago. The typical opinion is to buy one software that does it all, a "fully integrated" solution. In reality, when you have one tool that does it all for the whole company, then the individuals suffer. Those who use the tool every day are not happy because the software they use wasn't built for them. Like they say, “You can’t be everything to everyone.”
The problems don’t stop there. As Oleg says, "Each of these systems provides a specific functional view on BOM management – design, engineering, supply chain, manufacturing, finance, etc. However, the integration of these systems is a very complicated task.” He is right. These solutions give one vendor too much control over your company’s functions. Vendors are incentivized to lock data to improve the competitiveness of their products. Integrations are almost impossible. This keeps outside solutions, which may be better for you in one area, too hard to implement. This is how today’s PLM companies think. But I believe, and hope, that the days of old thinking are coming to an end.
SaaS provides more options, which makes more people happy
Now, let’s compare this to the new Software-as-a-Service (SaaS) world. In SaaS, you have the "Best of Breed" for any solution you need. Companies that use SaaS have the freedom to focus on building software for individuals. This is better for you because it means bringing tailored solutions to your Procurement Specialists, Engineers, or Manufacturing Planners. You get solutions that make each group happy.
While this may sound more expensive or harder than a one-size-fits-all solution you’ll find with traditional PLM, the exact opposite is true. SaaS offers an attractive pricing model; you rent instead of buying. Companies are incentivized to integrate easily, not block you from using complementary solutions. Why? They win when you’re happy and their software fits into your workflow. They need to keep you happy or otherwise you can find someone else who will.
Why product companies need SaaS solutions:
- Make each person using the software happy and efficient
- Cheaply and easily integrate Open SaaS systems with one another
- Drop one-size-fits-all solutions that don’t evolve with your business
- Automatically upgrade to new versions, so everyone stays in-sync
- Work faster with setup that takes minutes or days, not months or years
- Lower your risk with monthly and annual payment plans
Online tools bring many advantages to the companies that use them. The main thing is to figure out how to select them based on your needs and integrate the relevant information so they can work together to accelerate your design process. This is already happening in other industries.
[Customers] expect application integrations to work right out of the box – even when the applications are from different vendors. - Larry Ellison
Oracle, the biggest "Best of Breed" opponent, declared that they are making the change and partnering with Salesforce. Larry Ellison says, “When customers choose cloud applications they expect rapid low-cost implementations; they also expect application integrations to work right out of the box – even when the applications are from different vendors. That’s why Marc and I believe it’s important that our two companies work together to make it happen, and integrate the salesforce.com and Oracle Clouds.”
Getting the right information to the right people
BOM will play a huge role in integrations because it is going to contain the main information about the product you’re building. Different roles need different information from the BOM, so this always needs to be linked and updated. CAD software doesn’t contain supplier terms. In ERP, there will be no need for CAD tolerance information on the CAD model. The CAD system’s job is to help engineers design and the ERP’s job is to help procurement managers to manage the supply chain process. For communication among engineers and other partners, there’s online collaboration tools. These are “Best of Breed” products that talk to each other through open APIs.
We will see more and more customers asking for integrations as the manufacturing world embraces SaaS applications. This is already happening with GrabCAD Workbench. People want to integrate Workbench with their PDM and PLM and our API was designed from scratch to enable that kind of connection. We like the idea of an open exchange of data between GrabCAD and other SaaS tools because it brings real value to our customers. Say “no” to single BOM and “yes” to out-of-the-box integration and the “Best of Breed” products that people love. Let’s get the right information, at the right time, to the right person on your team.
Need a BOM Template?
A well-structured bill of materials (BOM) will help you keep track of materials, components and quantities - avoiding confusion and costly errors. To help you stay organized, GrabCAD is providing a free BOM Excel template so you don't have to start from scratch
About the author: (Hardi Meybaum)
Hardi's background is in manufacturing, as an engineer, consultant, CIO and ERP Team Manager with a strong combination of IT, sales, marketing and finance skills. Hardi holds a MSc in production development from Tallinn University of Technology. When not plotting how to bring the world's engineers together, he spends time with his daughter and teaches his Dachshund Fix some soccer.
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