Half of Companies Still Use Spreadsheets (or Nothing) to Manage Bills of Materials

Two-thirds of respondents think it’s important for suppliers to connect to the bill of materials, yet 47 percent don’t.

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Arena Solutions, a provider of cloud-based product lifecycle management (PLM) applications, announced the results of a cross-industry survey focused on how organizations manage their bills of materials (BOMs). In its most surprising finding, the survey showed nearly half (48.4 percent) of respondents are using either a spreadsheet (34.6 percent) or nothing at all (13.8 percent) to manage their BOMs. The survey results also demonstrated that, while most respondents feel it is important to connect suppliers to the BOM, a significant number are not doing so.  

Of the survey’s 405 total respondents, two-thirds represented organizations with fewer than 500 employees, while one-fifth represented organizations with more than 2,500 total employees. The largest single group of respondents was engineers, at 35 percent, while the rest were in managerial positions: 13.6 percent at the vice president-level or above, and 87.5 percent that either interacted directly with the BOM or supervised those who do.

Almost as surprising as the finding that inadequate, antiquated tools continue to be used by many to manage their BOMs was the frequency with which suppliers are being integrated into the product design and development process. Even though 62 percent say it is important (26 percent), very important (22 percent) or absolutely critical (13 percent) that suppliers be connected to the software that runs the BOM for smoother business operations, nearly half (47 percent) say that none of their suppliers are connected to the BOM. Even among those who say it is absolutely critical to connect suppliers to the BOM, 26 percent of those respondents still do not have key suppliers connected.

The lack of connection between suppliers and the BOM begs the question of why more companies do not do so. Arena asked and 71 percent of respondents indicated that the difficulty of deployment at suppliers prevents them from doing so. The cost of licenses for suppliers and security concerns were also cited; however, difficulty of deployment was mentioned most frequently.

Interestingly, it’s also clear from the survey analysis that not having a specific supplier or multiple suppliers connected to the BOM causes significant problems, including the following, cited by respondents:

  • Revision control (44.8 percent).
  • Incidence of scrap and rework (44.8 percent).
  • Wrong parts ordered (52.1 percent).
  • Product delays (56.7 percent).
  • Product quality issues (31.4 percent).

“We found it curious that, while a majority of product companies say it’s important or absolutely critical for their suppliers to interact with the BOM, nearly half say that none of their suppliers are connected to it, primarily because it’s too difficult, but also due to cost and security concerns,” said Kent Killmer, vice president of marketing at Arena Solutions. “Thankfully, there’s a solution. Our software-as-a-service (SaaS), cloud-based PLM solution enables product companies to connect suppliers quickly and inexpensively. And due to our multi-tenant, single-instance of software architecture, we can make upgrades, release updates and install security patches effortlessly across our entire customer base. By making it easier to connect suppliers—and their suppliers—to the product record, we’ve helped to greatly reduce problems of version control, scrap, rework, product delays and continued to shrink time to market.” 

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