How Does an Integration Between OpenBOM and ERP Work? Part 2 of a 3 Part Blog Series

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Part 2 of a 3 Part Blog Series

In part 1 of this three-part blog series, we wrote about the “why” of integrating OpenBOM to enterprise resource planning (ERP) solutions.  The upshot is that without automating the exchange of data between the two solutions, errors are introduced.  And the cost of these errors are real and manifest in the expense associated with redesigning parts that already exist, scrap and rework, overlooking make or buy opportunities, expedited shipping expenses, warranties, etc.  From a business perspective, this is classified as the “Cost of Quality” (CoQ).  COQ is ultimately a profit drain and is estimated to represent 3 to 10 percent  of a company’s annual revenues.  So, by integrating OpenBOM with ERP, an organization is effectively taking steps to reduce their COQ.  An integration is not just a nice efficiency tool, but it is a business imperative.

 So, what type of activities and/or use cases would an integration facilitate?  Here are the three most common use cases encountered …

  •  part/bill of materials (BOM) release

  • document release

  • data federation

 Let’s dig into each of these and further explain what’s taking place.

 In our previous blog (part 1 of this series), we illustrated the manual process of releasing parts/BOM from PLM to ERP.  A 100-part list could take hours if not days to manually enter.  It is a tedious and error prone operation.  Hence, the part/BOM release is easily the most common use case for an integration.  What may have taken hours and/or days is now literally executed in seconds.  When a user “digitally releases” a structure from OpenBOM, the event is almost instant. 

The second most common use case is the release of documents.  Parts invariably have some associated documentation such as CAD models, specifications, manufacturing instructions, etc.  Hence, when a part is released, it is often desired to release related documentation.  However, sending documentation to an ERP is not the best practice.  ERP systems are not designed to support enterprise consumer access.  Nor would companies want to pay for the additional user licenses just to access documentation.

 As a result, a growing trend is to leverage enterprise content management (ECM) platforms as the primary repository for all released design artifacts associated with products.  Now users in purchasing, manufacturing, quality, field support, etc. have one place to go for documentation.  Platforms such as Microsoft’s SharePoint, OnBase, and OpenText are examples of this class of software.

The release of documentation is typically done in parallel with the part/BOM release process.  When the release is activated, the documents are pushed out first to the ECM platform.  Once placed, the URLs of the documents are retrieved and then merged in with the part data that is pushed to the ERP solution.  Now users in ERP have a hot-link directly to the latest released documentation associated with a part.

 The third use case is the idea of accessing data from another system on-demand.  The data retrieved is for information purposes only and not saved in the requesting system.  For example, imagine reviewing a change request and wanting to know the existing inventory level of a part to help disposition the action of the change request.  With data federations capabilities, this is possible without having to log into ERP, search and retrieve the information.  The inventory level is retrieved and displayed to the user along with other information.  This idea can literally be extended to all the data in ERP and beyond to other enterprise systems.  Getting a 360-degree view is a reality with data federation.

 Of course, there are other use cases like approved vendor list (AVL) synchronization, sales order creation, and investigation requests initiated from within the ERP environment.  These use case drive significant efficiencies … but ultimately, they are important steps towards driving down the cost of quality.

 Part 3 of this series will take us a step further and get into what goes into an integration between OpenBOM and an ERP solution.