Strengthening your E-BOM with MDM
Manufacturing businesses are bound to stick to tight budgets. They like their component lists to be complete, harmonized, updated and running, at all times. So, in order to keep their bill of materials (BOM) regularly refreshed with an updated list of all the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts and quantities of all products, there is a need for essential standardization, normalization, rationalization, attribution and enrichment. This is where effective master data management comes in.
In the case of E-BOMs, as it usually reflects the products designed by engineering, it is not related to any form of modular BOMs or configurable BOMs. Also called the ‘as designed’ amongst many manufacturers, they are produced in engineering and are typically driven from CAD tool, which ultimately drives its focus around final assemblies list of parts or components. E-BOMs mainly align to sales BOMs and service BOMs. Since this BOM includes complex large numbers like substitute and alternate part numbers along with parts that are contained in drawing notes, there is a growing need amongst the data owners and data stewards for proper de-duplication, streamlining and refining of data and its contents. This can be done only by taking appropriate data quality improvement and governance measures.
MDM for E-BOM equipment is one of the best ways to reduce costs and standardize procurement processes. It helps recognize duplicate components, and thus, allows adequate cost-cutting. A recent implementation by our team saw inventory reduction of 5-6%. That can be a huge figure in a company with over $15 billion in annual revenues.
An advantage gained through MDM efforts is the identification of a fixed format for the creation of the E-BOM. The MDM tools used, will help distinguish between the assets that require an E-BOM, and help decide what items must feature on the E-BOM, along with what data must feature on the E-BOM.
Business benefits can be seen in the form of improved procurement and MRO processes resulting in managing and reducing costs, when firms implement master data management solutions for their E-BOMs. This was recently seen when a large agricultural nutrient provider having over 50 manufacturing facilities across North America leveraged Verdantis’ Artificial Intelligence-based solutions to remarkable effect, for harmonizing BOM data, Purchase order data and Item master data. Read about the successful implementation here.
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