Opposing Forces in your BOM

We received the following question about Bills of Material (BOMs) from a product development manager:

QUESTION: "How does one balance the need of a BOM to be expedient and fast for real world use, while still trying to make an investment in a universal and reusable bomb?"

That's a great question for product development teams. Our answer is a series of steps:

 

STEP 1 – Admit it's a problem
It may sound like the trite stuff of a 12-step program, but the first step to recovery is admitting you have a problem! There's nothing wrong with having a problem, and in fact, solving problems is what we went to engineering school to do, didn't we? Some people will tell you that you can have it all (usability and re-usability) in your BOM structure instantly and without conflict. That's delusional, but we can make incremental progress over time.

 

STEP 2 – Define the problem
Going back to our school days, the first thing we would do in our statics or dynamics homework would be to list the forces that are active. There are at least two forces in play, and for the most part they are directly opposed to one another:

  1. Functional Universality / Re-usability – we would like to have a universal BOM that can be re-used and easily modified to work for each product.
  2. Expediency / Practicality – We have to ship the product out the door on a certain timeline. The BOM has to be easy enough to use that we can modify it quickly so that we can get our "day-job" done.

 

STEP 3 – Recognize that the equilibrium point is dynamic over time
Where we start out on our journey of practicality vs. universality in the BOM is not where those forces may end up in the future. The equilibrium point between those forces will change over time.

In Figure 1, we see that initially the force of expediency/practicality is stronger. Therefore, at first our BOM will mostly focus on the needs of today, rather than the needs of tomorrow. However, over time we can reduce some of the immediate pressure to ship product, because we have invested in the bill of material. The equilibrium point is driven to the right on Figure 1 toward a more universal BOM, which is still practical and expedient for our daily use.


Figure 1 – Balancing initial vs. steady state

 

STEP 4 – Knowing the equilibrium point at any point in time
How do we know how to balance the two forces at any given point in time? The recognition of a third force may actually help us simplify the problem. That force is the needs and goals of our management team in the company.

The management team is certainly interested in shipping the product for immediate revenue and profit. However, they are also responsible for stable growth of the company over time. Management needs are a downward pressure that we can use to our advantage, just like the Romans did with their brilliant discovery of the arch.

Figure 2 represents such an idealized arch. The forces of the needs for universality vs. practicality are pushing against one another. Without a third force, certainly the structure would tumble. However, with the third force of management needs, it's much easier to balance the two forces and know where that equilibrium point is at a given point in time.


Figure 2 – The down force of management decision making

 

STEP 5 – Make sure you have a solid keystone
What is the keystone in the arch? The keystone bears the pressure of all three forces and balances them. The keystone in our process is a thoughtful and dynamic owner of the bill of material structure. This might be a consultant, a specific person who specializes in product lifecycle management, or the product development manager. Whoever it is, this person or team should be able to view the opposing forces not as forces that will crush them, but as forces that will help them balance each other.

As with any problem in the real world, unfortunately we're not dealing with a precise science here. However, hopefully this expansion of our framework will be a way to think about making progress, as you balance usability vs. re-usability in your bill of material structure.

This post is 3rd in a series of posts about Bills of Materials (BOMs).  The first outlines the importance of managing the BOM:  Dr. Strangepart: How I Learned to Stop Worrying and Love the BOM.  Next is a framework of how to build re-usability into the BOM: Form, Fit, and Function – A Framework for your Bill of Material.   

 

Eric Hiller is the Managing Partner of Hiller Associates , an operational and strategic consultancy, specializing in Product Cost Management , financial modeling, operations, business planning, software product management, and product development.