New Product Development Process

Learn how OpenBOM can streamline workflows and optimize product development, including
managing inventory, planning purchasing, creating orders, and managing and generating RFQs and POs.

In the wake of technological innovation, businesses worldwide are exploring novel methods to streamline their workflows and optimize product development. OpenBOM is a unified digital thread platform that can revolutionize the way companies handle product development, engineering, and manufacturing.

The Challenges of Modern Products

In today’s dynamic business environment, engineering teams and industrial companies are constantly seeking innovative solutions to streamline their product development processes. Companies are striving for better, faster, and cheaper product development.

For the last 25+ years, the industry has built many sophisticated PDM and PLM solutions. While these solutions have proven effective in tackling various challenges, many of them tend to confine their problem-solving capabilities and processes within the realm of engineering. CAD data management, change management, and product releases exemplify this issue. The problem is that these processes remain isolated within the “silo” of the engineering department.

Many existing PLM solutions struggle to address processes that go outside of the engineering department, to support the connectivity between engineering and other functions – procurement, inventory management, and supply chain management. As a result, companies end up with expensive, complex combinations of CAD, PDM, and ERP solutions integrated using Excel and various point-to-point solutions and scripts.

Agile New Product Development: How OpenBOM Can Help

OpenBOM has taken a fresh approach by completely rethinking and building support for the new product development process from the ground up. OpenBOM’s flexible data modeling foundation, collaborative functionality, engineering integrations, and business logic allow you to support connected NPD processes in a very unique way.

OpenBOM’s new product development tools allow for seamless information flow and coordination of people from the beginning of design and engineering all the way to procurement, RFQ/PO, and inventory control. It includes the following four stages of the product development lifecycle: 

 

  1. Multi-disciplinary design including mechanical, electronic, and software
  2. Engineering bill of materials planning
  3. Purchase components (both off-the-shelf and custom)
  4. Receive components, make sub-assemblies, and perform the final assembly

The main difference of OpenBOM is to provide seamless support to organize the process from the standpoint of integrated data management (items, bills of materials (BOMs), planning, RFQs, orders, inventory) as well as coordinating and communicating with people.

Waterfall Process vs Agile Process

A traditional waterfall process usually includes people responsible for each step of the overall product development process but is poorly connected and integrated. Think about multiple engineers working in MCAD, PCB design tools, and software development, and later, integrating and combining the results in a single bill of materials (BOM). 

The BOM itself is the input for procurement, which will get the data in the form of Excel or email and include everything that is needed to perform the RFQ/PO process and increase the inventory level. Later, once shipments are received, the overall process follows the assembly, consumption of components, and inventory updates (decrease for components or increase for final assembly).

OpenBOM allows companies to move from a traditional waterfall model to the agile process. It includes the capability to iterate faster with minimum effort.

OpenBOM differentiation factor describes the picture above to provide tools that create the entire data and set up collaboration and iteration in the process to make it “spin” faster and perform multiple circles of design-BOM-purchase-assembly process multiple times. The integration is key here because, without these tools, the agile process will not be feasible.

End-to-End Engineering, Inventory, and Procurement

The process described above includes multiple stages and OpenBOM provides support in each of these four stages – Design, BOM, RFQ/PO, and Assembly. The system is integrated with existing engineering and enterprise tools, allowing you to scale upstream and downstream when needed.

OpenBOM Collaborative Batch Planning

The following activities are effectively happening during these steps. They are covering functions of the OpenBOM system connected to different organizational roles. The key element of OpenBOM support is the integrated fashion of operations, connection between data and people, and coordination with multiple people and departments.

Blue: Catalogs With Items, Quantity on Hand, and Vendor Information

OpenBOM’s digital catalogs function as a central repository for all product-related data, including items, their quantities, and vendor information. This feature not only standardizes data across the organization but also ensures real-time information access.

These digital catalogs can be updated in real-time and shared with all stakeholders. They contain comprehensive data for each item, such as item specifications, current stock, and vendor contacts. This centralizes data management, simplifying procurement, inventory, and supplier management.

Green: BOM and Integrated Product Data

One of the key advantages of OpenBOM is its ability to integrate bill of materials (BOM) with all product-related data. It provides a holistic view of all the elements necessary to manufacture a product, from raw materials to the final assembly. This includes data such as cost, weight, and measurements, creating an integrated and easy-to-navigate product roadmap.

Most importantly, OpenBOM supports multi-disciplinary product organization. Companies can have a holistic data set of all systems, (e.g. mechanical, electronics, software, etc) which means no more siloed BOMs in multiple systems. By utilizing the BOM and integrated product data, teams across the organization can access consistent and updated information, reducing the likelihood of errors and miscommunication.

Orange: Create Batch Order and Gap Calculation

The next phase in the digital thread is to create a batch order. The batch order is essentially a command to produce a specified number of units of a product. OpenBOM streamlines this process by allowing the batch order to be directly generated from the BOM.

Once the batch order is created, OpenBOM calculates the gap (the difference between the required and available inventory). This gap calculation assists the procurement team in understanding what materials need to be procured and in what quantity.

Red: Closing the Circle by Send/Receive PO, and Updating Inventory

Finally, OpenBOM allows you to close the circle by sending and receiving purchase orders (POs) and updating the inventory accordingly. After the gap calculation, the procurement team can generate and send POs to the suppliers directly from the platform.

Once the goods are received, the POs are updated, and so is the inventory. This real-time updating of inventory levels assists in maintaining optimum stock levels and avoiding overstocking or stockouts.

Demo Video

In the following video, you can see a typical process covering engineering/BOM management tasks, inventory and PO planning, integration of the data, and collaboration between team members. The video explains the following commonly used steps:

  • Create items and catalogs and assign vendors
  • Calculate order quantities based on the bill of materials for specific product batches
  • Manage inventory of parts by controlling the quantity on hand (QOH)
  • Organize purchasing planning (order) to provide a purchasing summary
  • Automate preparation of purchase orders to help source parts and contract work
  • Receive PO and adjust QOH on that event
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