Unlock
the Secrets
of BOM Management

Summary

While a BOM initially originates from your EDA software, it evolves into a critical living document that connects design, procurement, and manufacturing throughout the product lifecycle. It's the central reference point that guides part selection, procurement decisions, and supply chain management from initial design through production. There are many types and formats of BOMs used in different industries, but they all play the same important role in guiding procurement and assembly.

This BOM management guide dives deeply into everything hardware engineers need to master the creation and management of BOMs, starting from the fundamentals to BOM management software advanced strategies for managing complex, dynamic supply chains. The BOM for a new product is the starting place for controlling cost, streamlining procurement, and maintaining the designer’s intent for manufacturing; as such, it needs to be monitored and managed throughout a product’s lifecycle. This guide will give design engineers an overview of how successful design teams manage their BOMs, as well as how these processes impact procurement and product lifecycle management.

The BOM is more than a shopping list; it acts as a single source of truth connecting design, procurement, and manufacturing. It’s important to have all of the part information in one place, so BOM managers can make sense of potentially confusing information like multiple part numbers for the same component.

Today’s BOM can be much more than an Excel sheet with static part numbers; it has evolved into a living document that provides dynamic information directly from the electronics supply chain. Design teams can use real-time data visibility when planning purchases, managing production orders, and monitoring lifecycles of critical electronic components. Modern cloud BOM management software enables a level of BOM automation that was not possible only a few years ago, and it is driving new levels of productivity within design and procurement teams.

Cost Impact

According to a study by Forrester, engineers can spend up to 159 hours per year performing administrative tasks*, which mostly includes tasks related to procurement and BOM management. These tasks are not something engineers tend to find enjoyable, yet they cannot be delegated. Engineering input is required to ensure that the product is built to specification.

Furthermore, the Forrester study found that 80% of designs require part replacements, resulting in an additional average* of 40 hours of time spent sourcing these parts. This equates to 2.8 PCB re-spins at an average of $46,000 per re-spin**. These manual tasks continue to slow companies' time to market and tax their revenue streams.

Designers should be able to use BOM management software to take advantage of the wealth of digital data inside a BOM, which could help streamline crucial tasks. In a digitally connected world, designers can use the cloud to access real-time technical data on parts, component data on availability, and lifecycle data on part end-of-life schedules that inform supply chain risk assessments. Procurement managers need to track BOM changes and collaborative decisions across departments as part of BOM management. This gives procurement teams immediate visibility into product revisions and their impact on part inventory or purchase plans.

* A commissioned study conducted by Forrester Consulting on behalf of Altium 365. Results are based on a composite organization.

** Lifecycle Insights, 2018

Market Pressures

Market pressures also demand creative and precise BOM management processes. In particular, accelerated development cycles and design-to-cost pressures drive the need for real-time supply chain data visibility, specifically data related to prices and inventories held by global distributors. Electronic products have become far more complex, with some products having 100x as many parts as earlier generations of the same product. In an environment where globalized production creates global supply chain challenges, design teams need BOM management tools that help them optimize costs across their supply chain and product portfolio as they plan to scale up production.

Data Quality and Integration

Third-party data providers can make current part data available to design and procurement teams so they can overcome their limited access to technical specifications and lifecycle data. Altium 365 integrates streaming data services for digital components into its BOM management tools. This helps BOM managers keep inconsistent or outdated part data out of their BOMs. These integrated third-party data platforms also provide traceable compliance information and lifecycle status information, as well as access to product change notifications (PCNs). A digital link to the supply chain with real-time data provides this information directly inside the company’s BOM software so team members don’t need to toggle between multiple apps or web pages. Altium products also bridge communication gaps between teams. Manual data entry only occurs when a part is created in a library; all future supply chain updates are automatically fed into the BOM and parts libraries rather than being entered manually. By eliminating so many manual tasks, teams can transform their PCB BOM management processes and spend more time focused on designing competitive products.

In the world of PCB design, designers use EDA software to implement best practices for PCB BOM management. Managing the data in a BOM starts with ensuring data in a parts library is accurate and that parts have a link to real-time supply chain data from preferred suppliers. Project stakeholders can implement their management processes in a PDM platform while also enforcing version control and ensuring that collaboration happens in a secure environment. Teams need a better way to share information than the emails and PDF attachments that they’ve used for years.

What should design teams do as part of their BOM management process? BOM management should be part of a product lifecycle management process that specifically focuses on part and supplier information as it relates to manufacturing electronics assemblies. Teams will need to periodically review and update BOMs based on lifecycle changes, inventory changes, and design revisions. A BOM management tool that pulls data from the supply chain and links directly to libraries and projects streamlines the maintenance of accurate BOM data.

Engineering teams are responsible for developing processes to achieve these goals. Design, procurement, and data management tasks are all linked together through a company’s EDA platform and their ERP/PLM tools.When this is done correctly, design teams see the supply chain data they need inside their PCB design software, BOM management tool, and parts libraries. This makes BOM management faster, more automated, and more accurate.

Thanks to the collaboration and version control features in Altium 365, stakeholders from across an organization can share, view, and edit a BOM while planning purchases for upcoming PCB manufacturing runs. Once a PCB project and its BOM are finalized, data packages can be released to a contract assembly house or third-party logistics provider using the platform’s built-in sharing features.

We built Altium 365 specifically for electronics design teams and it integrates directly with PCB design projects in Altium Designer. Altium 365 and BOM Portal give you constant access to supply chain data, part management features, and version control, for comprehensive supply chain management for PCB projects. See how BOM Portal on Altium 365 can help teams streamline design and procurement in a secure, easy-to-use cloud platform.