One of the BOM type that was mentioned in the last article is “Configurable BOM” aka 150%BOM.
Why do we need Configurable BOM, and how does it help to transform from traditional manufacturing environment to adapt more flexible engineering practice? When struck between the dilemma on either “time to market” or “product configureability”, we adapt to either “Make-To Stock” or “Make-To Order” proven strategies.
In “Make-To Stock” an independent bill of material is maintained for each product which are fixed in design. Demand forecasting plays a key role and the products are manufactured well in advance based on these foreseen assumptions. Unforeseen circumstances may cause a dip in sale of the already manufactured goods and may cause huge loss to the company.
On the other hand, in a “Make-To Order” scenario, a product manufacturing begins after the order is received and this practice provides more options to the customer to build their order. In this case, manual changes are made to the Engineering BOM and Manufacturing BOM with respect to the order received. These bills of materials are maintained independently again, specific to each order. This practice also cause delay in manufacturing process, and eventually more time before the finished good is delivered to the customer
Both these strategies do not work in all the cases. Modern customers are more demanding in terms of product variability and expects the product to be delivered within less time. Market demand is mostly unpredictable; therefore, it is important for manufacturing companies to adapt to more efficient engineering and manufacturing practice and find improved technique to manage their EBOM and MBOM.
Configurable BOM – The way forward
A “Configurable BOM” aka “150% BOM” aka “Variant BOM”, is used by manufacturer when dealing with highly complex product and when there is a need to maintain a balance between configureability, time to manufacture, and preserving the cost under threshold. With configurable BOM we adapt to a new strategy “Assemble-To Order” (ATO), which is eventually a hybrid between a “Make-To Order” and “Make-To Stock” strategies. The ATO attempts to combine the benefits of both the former ones i.e. providing better options in terms of customizability of the purchased product, at the same time deliver the finished good to the customer at a quicker pace.
A 150% BOM helps to bring together several BOM in one structure, which were maintained independently earlier, and configure them on demand depending on the different combination of options, to generate the final MBOM.
A configurable bill of material contains all the parts that are required to manufacture the material to a customer’s specific requirements. A “Select-Condition” is the applied on this predefined structure that determines whether a part is to be included in the final BOM or not. Intelligent procedures are introduced to the definition of the configurable BOM, that determines the dynamic quantity, and other operational fields for each individual part.
With the help of “Variant BOM”, new product options can be introduced with ease at predefined nodes and eliminates the need for redesign or rework. As the final MBOM is configured according to an order, flexibility is maintained across the structure to adapt to various permutations and combinations avoiding excess work. Modern PLM tools such as Aras Innovator, TeamCenter PLM, Windchill PLM etc. facilitates efficient management of these configurable bill of materials and enables manufacturing companies to adapt to better engineering practices.
Providing product variability is a growing trend and it is evidently seen that customer demands for flexible configurations and to choose from various product variants that meets their needs. Maintaining configurable bill of materials is one of the best practice that the manufacturing companies have started to adapt to meet these consumer demands.