A Perfect Marriage: PLM & e-Sourcing aka. BOM cost management

Given this post goes live on Valentine's Day, let's talk relationships. There are a lot of ups and downs in relationships. Couples try to work through bad times hoping for that perfect future. Sometimes these attempts are successful, and several times these attempts fail. People always wonder about the key to eternal happiness in relationships. That’s a fantastic question!

...and we don't have the answer to that.

To be clear, I’m not a relationship guru, but I am a guru in procurement. So what does happiness mean for users of PLM and e-sourcing? The process of BOM cost management, which involves coordinating/integrating both PLM and e-sourcing, can be nightmarish to say the least.

As a quick primer, Product Lifecycle Management (PLM) is a process that helps organizations manage the entire lifecycle of a product, from ideation and design to retirement. It involves creating, storing, and sharing information about a product with the goal of improving collaboration and streamlining the product development process. e-Sourcing, on the other hand, is the use of electronic tools and processes to manage the sourcing process for goods and services. This includes activities such as request for information (RFI), request for proposal (RFP), online auctions, and supplier management. The goal of e-Sourcing is to increase efficiency, reduce costs, and improve the overall quality of the sourcing process.

In the ideal world, data exchange between PLM and e-Sourcing software should be 2-way and seamless. However, in today’s world there are several challenges in BOM cost management.

• Fluctuating raw material costs: Raw material costs can vary significantly based on market demand, availability, and other factors. This can make it difficult to accurately predict and manage BOM costs.
• Product complexity: As products become more complex, BOM management becomes more challenging. It requires more detailed tracking of components and their associated costs, and may require more sophisticated software tools.
• Supplier management: Managing multiple suppliers for each component in a BOM can be challenging. It requires coordinating with each supplier to ensure timely delivery and quality control and negotiating prices to keep costs within budget.
• Design version control: Design changes can have a significant impact on BOM costs, especially if they require the use of new or more expensive components. Managing these changes requires close collaboration between design and procurement teams.
• Lack of accurate and up-to-date information: BOM cost management relies heavily on accurate and up-to-date information on the cost of each component or part. If this information is not available, outdated or incomplete, it can lead to inaccurate costing and potentially cause losses to the business.

In conclusion, dynamic BOM cost management is tough. Period!

At LightSource we believe in eternal happiness for our customers especially those who face challenges in BOM cost management. Our platform creates the perfect marriage between PLM and e-Sourcing. We house BOM on our platform that can automatically update with PLM integration or via APIs. Costs for n-level BOMs can be updated by click of a button and suppliers can be managed using our easy-to-use software interface and our strong bench of procurement gurus. Information is up-to-date on the platform and can be the single source of truth for cost.

Reach out! We’d love to hear from you. Time that procurement professionals feel that e-sourcing software are technologies and services that can transform their day-to-day work life.

Check us out at https://lightsource.ai/!