What is the latest with the OpenBOM and how does it help procurement work with engineering information?

If you’re not familiar with OpenBOM, it’s a cloud-based application you use through your browser to work with bills of materials. There’s a lot of capabilities to use and manipulate the bill of materials as it goes into different functional departments: manufacturing, service and procurement.

Traditionally, the bill of materials comes from engineering and it comes in a certain form. It’s highly structured. It’s organized according to how the engineer designs the product, but not necessarily how it’s going to be manufactured, assembled, and procured. So that bill of materials needs to be transformed. Often, especially when you go to procurement, it’s flattened out.

Basically, you have a whole bunch of parts that either you need to have manufactured, procured, or sourced. So you have this flat list, this is one transformation. Then it goes to manufacturing. In manufacturing, you often see that the bill of material is reorganized to represent the process of how it’s going to be manufactured. Not only how individual components or parts are going to be produced, but also how is it going to be assembled. What procedures and processes are going to be followed to actually make it?

And there’s a similar kind of effort in procurement. It’s not just, “Hey, we have a list of parts. Let’s go award them,” and that’s it. No, there’s a whole process around it.  You have to generate a purchase order for each one after you’ve selected a supplier. Procurement must meet standards, execute it fast, make sure the items are delivered on time and kind of closing the loop.

This is a new area that OpenBOM has expanded its functionality. It will actually now generate those purchase orders as it has been sourced or awarded to different suppliers. This solution by OpenBOM is really interesting and fairly unique. I haven’t seen any other ones that try to address this issue of taking source engineering information and providing automation or a way to automate the sourcing process to different suppliers based on that engineering information. So I think this is where it can add a whole lot of value. It doesn’t replace your sourcing solutions in my opinion, but it is a niche tool that can help speed up the process and close the loop.