Bill of Materials in Excel, Planning, ERP and PLM/BMMS Software

Screenshots and examples from Arena Solutions, PlanetTogether, SAP, and Demand Works.

What the Book is About

The ability to manage BOM information has never been more exceptional. However, the vast majority of companies are missing out on this opportunity!

Focusing on a significant area of weakness at most companies — how the bill of materials (BOM) information is managed. Software Approaches for Improving Your Bill of Materials explains how the BOM is the most integrated object in the company and how it ties together internal and external parties. There are exceptional opportunities for companies to improve the management of the BOM by applying software and an integrated approach. This book shows how the BOM is represented in multiple systems and presents  BOM management solutions using highly useful and practical applications.

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Areas of Focus of the Bill of Materials

The underlying message of this book is how the effective implementation of a BOM management system enables a variety of other applications that rely upon BOM information. An application such as Arena Solutions (a PLM BOM management system provider featured in the book) is a crucial enabler to the other applications that rely upon a clean and up-to-date bill of materials information.

The book takes an integrated approach to the BOM. It explains the BOM, compares it across multiple enterprise systems, and demonstrates how different systems access different parts of the data stored in the BOM management system. The enterprise applications covered are:

  1. Production planning and scheduling with PlanetTogether
  2. Supply chain planning with Demand Works Smoothie
  3. ERP with SAP
  4. The bill of material management system with Arena Solutions

BOM Management or PLM?

The book also clears up a great deal of confusion between a category of software called PLM (product lifecycle management) and BOM management software. It explains the history of PLM systems — where PLM functionality exists even in non-PLM systems — and why the term “PLM” shouldn’t be used alongside “bill of material systems!”

Background and Motivation

This book is an attempt to educate readers about the enormous inherent limitations and inefficiencies of the current software approaches
being used to manage the bill of material (BOM). My view of the state of BOM management results from years of working on projects and from seeing companies repeatedly make the same mistakes, costing them in multiple ways. Companies may be affected adversely by the conventional approaches to BOM management in ways such as those listed below:

  1. Longer product development lead times
  2. Lower quality final product
  3. Higher management and coordination costs
  4.  Maintainability issues
  5. Less efficient internal manufacturing planning
  6. Reduced ability to leverage or maintain contract manufacturing relationships

The above problems can be significantly mitigated by following the approaches to designing the bill of material management solution laid out in this book. Those who specialize in BOM management system implementation have known these approaches for some time; however, for whatever reason, the information has not caught on with the vast majority of companies.

Step 1: Understanding the Design Conceptually

The first step toward understanding the design that I propose in this book is to know how various software applications interact with and manage the BOM, a problematic topic if a comprehensive approach is not taken. Similar to the story of the four blind men who derived their disparate descriptions of an entire elephant by touching isolated parts of the elephant’s body, it is not sufficient to study the BOM from the perspective of one system only. “In various versions of the tale, a group of blind men (or men in the dark) touch an elephant to learn what it is like. Each one feels a different part, but only one part, such as the side or the tusk. They then compare notes and learn that they are in complete disagreement. The stories differ primarily in how the elephant’s body parts are described. Therefore, this book takes a comprehensive perspective regarding the BOM.

Step 2: Understanding the BOM in Various Software Applications

Once the interaction between various software applications and the BOM are understood, the next step is to learn how to leverage applications that use the bill of material. I believe that individuals have difficulty understanding the BOM in its complete form because existing literature does not include application screenshots to show how the BOM looks in different applications. While some product manuals produced by the BOM management vendors come close and are quite good, the manuals focus exclusively on a particular vendor’s application. They do not show how the BOM looks in competing applications. As a result, few people get the benefit of comprehensive education in this area, one reason as to why BOM is so poorly managed in general. This book is such an opportunity for readers to understand the BOM in various software applications as it pulls together material that previously has been available only in isolated sources and presents the information in a complete form. While this book is limited to a single master data object (the BOM), it follows the BOM through several applications, making the book broad in its coverage. At the same time, this book provides a high level of detail and connectedness while keeping the topic understandable. The book provides a foundation of understanding and also recommendations that naturally follow from an enhanced comprehension of the bill of materials. None of the recommended approaches are particularly expensive. This book is more about the application of knowledge in the critical leverage points rather than wholesale changes or significant redesigns.

A Book Based in Reality

Software Approaches for Improving Your Bill of Materials takes a realistic look at how the BOM is currently managed at most companies and uses this perspective as a jumping-off point to describe how BOM management can be improved in your company.

The book encompasses the leading edge in BOM technology enablement. While looking internally to see how multiple KPIs (key performance indicators) can be improved and how every system that relies upon BOM information can be enhanced. The book also looks externally to how companies can effectively strengthen their connections with supply chain partners.  In supply chain management, purchase orders and other transactional objects tend to get the collaborative focus of the company. Usually, the BOM is not enabled by easy-to-use collaboration technology. The book describes how the BOM is an excellent place to improve collaboration with supply chain partners and why SaaS-based applications like Arena Solutions offer such an advantage over other alternatives.

Interconnected to Web Information

To keep the book at a manageable and readable length, it includes numerous links to articles on the SCM Focus site, where further information is provided to support concepts covered in the book.


  • Chapter 1: Introduction
  • Chapter 2: An Introduction to The Bill of Materials
  • Chapter 3: The Right Approach to the Bill of Materials
  • Chapter 4: The Bill of Materials SAP ERP Systems
  • Chapter 5: The Bill of Materials in Planning Systems, PlanetTogether and Demand Works Smoothie
  • Chapter 6: The BOM Management System with Arena Solutions
  • Chapter 7: BMS Software and Suppliers Versus Contract Manufacturers
  • Chapter 8: Reasons for the Poor Current BOM Management Design
  • Chapter 9: Rectifying the Current Solution Design BOM Management Flaw
  • Chapter 10: Conclusion

Table of Contents

Chapter 1: Introduction 1

  • Background and Motivation
  • Step 1: Understanding the Design Conceptually
  • Step 2: Understanding the BOM in Various Software Applications
  • My Background
  • The Software Discussed in This Book
  • Other Books on the Bill of Material
  • PLM Versus the BOM in Popular Literature
  • The Importance of Software Screenshots and Vendor Diversity
  • How Writing Bias Is Controlled at Brightwork Research & Analysis and Brightwork Research & Analysis Press
  • Making the Perfect Book for Those Hungry for Precise Information on the Bill of Material
  • The Brightwork Research & Analysis Site
  • Use of Quotations
  • My Relationship with Arena Solutions
  • Who Is This Book For?
  • Abbreviations

Chapter 2: An Introduction to The Bill of Materials

  • Important BOM Features
  • BOMs in Many Places
  • Master Data Management and the BOM
  • Understanding the Different Dimensions of Master Data Maintenance
  • Integrated Solutions
  • Conclusion

Chapter 3: Understanding the Flaws in the Current Standard BOM Solution Design

  • Effective BOM Solution Design
  • BMMS Data Superset versus the Satellite Subset
  • Conclusion

Chapter 4: The Bill of Materials (EBOM) in Design/Engineering Systems

  • The CAD Files Within the BMMS
  • Conclusion

Chapter 5: The BOM in Spreadsheets

  • Spreadsheet Search Capabilities
  • Change Control in Spreadsheets
  • BOM Archival in Spreadsheets
  • Associated Documents of the BOM Spreadsheet
  • The One Real Use for BOMs in Spreadsheets: The Arena Part Saver
  • Add Parts to Arena Parts List with Arena Part Saver
  • Conclusion

Chapter 6: The Bill of Materials in ERP and External Planning Systems

  • From EBOM to MBOM
  • The Fields in the SAP ERP BOM
  • Background on Resources in SNP Versus PP/DS
  • Common Questions on the PPM and PDS
  • Document Attachment to the BOM and the Material Master in SAP ERP
  • Variant BOMs
  • Product Structure
  • Item Categories
  • The BOM and Subcontracting in SAP ERP
  • Routing and Work Stations
  • Subcomponent Lead Times
  • Exploring the SAP BOM User Interface
  • The Bill of Material and MRP
  • The MRP BOM
  • Engineering Change Management in SAP ERP
  • Understanding BOM Explosion
  • Routings and Work Centers, Companion Master Data, Objects to the BOM
  • The BOM in External Planning Systems
  • The Process Flow of the BOM in Supply Chain Systems
  • How Is BOM Management Software Different?
  • Conclusion

Chapter 7: The BOM Management System: The BMMS

  • Understanding the BMMS
  • Multi-dimensional Relationships
  • Structured Communication Capabilities Provided by the BMMS
  • How Are Associations Created in a BMMS?
  • The Benefits to Commercial Terms and Negotiation
  • Customers of the BOM
  • Enabling Collaboration from the Ground Up
  • BOM Data and Related Data
  • Importing Data into Arena Solutions
  • Understanding PLM versus BOM Management Solutions
  • The Collaborative Aspects of the BOM
  • Understanding Arena’s Authorization or Permissions Model
  • Authorization in the Operating Systems
  • Authorization in SAP
  • How SAP Controls Access to Transactions
  • SAP’s Authorization
  • Authorization in Arena Solutions
  • The Power of This Authorization Model
  • Allowing Intelligent Input from Supply Chain Partners
  • Implementing the BMMS
  • The ROI of a BMMS Implementation
  • Socializing the BMMS at the Company Performing the Implementation
  • Gaining Access to a Demo BMMS
  • Conclusion

Chapter 8: BMMS Software and Suppliers Versus Contract Manufacturers Management

  • What Drives Contract Manufacturing?
  • Contract Manufacturing by Industry
  • Contract Manufacturing Implications on BOM Management
  • Arena Solutions and Contract Manufacturing
  • Converting Between a Typical Supplier and a Contract Manufacturer
  • The Standard Production Planning Process
  • The Superplant Concept
  • Capacity Planning for the Superplant
  • Intelligently Planning the Subplants within the Superplant
  • Prioritizing Internal Demand for Subcomponents Over External Demand
  • The Superplant versus the Common Manufacturing Trend
  • Conclusion

Chapter 9: Reasons for Poor BOM Management Design

  • The Software Reasons for Poor BOM Management
  • The Consulting Company Reason for Poor BOM Management
  • The Executive Decision Makers and the Reasons for Poor BOM Management
  • Conclusion

Chapter 10: Conclusion

  • Putting the BOM in the Right Context
  • What Following the Current Approach to BOM Management Means
  • Getting Rid of the Term PLM
  • The MBOM in Supply Chain Systems
  • The Ad Hoch versus Strategic Approach to BOM Management
  • What Drove the Development of the BMMS?
  • The Present BOM Design
  • Collaboration
  • Contracting Manufacturing, Suppliers and Outsourced Manufacturing
  • The Keys to Improved BOM Management


Links in the Book

References and Associated Quotations

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Questions about the Book? 

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