Variant BOM Management: PLM vs ERP vs CPQ—Which Approach To Choose?

When companies deal with products that have different variants, like an automobile, electronics, or industrial machines, managing the Bill of Materials (BOM) can become challenging. The question often arises, Should we handle Variant BOM Management in our PLM system, or would it be better in our ERP, or should we have an additional tool?

A Variant BOM (or Bill of Materials), is essentially a list of components and materials required to build a product variant. A simple scenario would be a bicycle. We could have one main bicycle design, but there could be multiple variations, some with different wheels, seats, colors, or accessories based on customer preferences. Each of these differences requires careful management. The same applies to other products such a Laptop or an Mobile Telephone.

Managing Variants in a PLM system

Generally PLM systems are designed to focus heavily on managing product details at the design and engineering level. They help keep track of how each product variant differs with each other, the reasons behind those differences, and make it easy to understand the impact of any changes made to the BOM.

For example, in a company that designs bicycles, engineers can clearly define variants like “mountain bike,” “road bike,” and “hybrid bike” in a PLM system. Each variant can have different frames, tire types, suspension systems, and brakes. PLM allows design engineers to clearly visualize and manage these configurations early on during the design analysis phase. If a new lightweight frame is introduced, the PLM system clearly shows how this affects all bike variants using that frame. This helps designers to keep the  product data organized and accurate.

However, the downside of managing variants purely in PLM is that it can sometimes become complex when trying to link it to manufacturing. PLM systems are not typically designed to handle logistics and inventory directly, meaning there is a clear necessity that we must integrate it carefully with the ERP system in place.

Managing Variant BOMs in ERP systems

ERP systems are excellent for managing products in terms of production, procurement, and inventory management. If we manage the Configurable Bill of Materials in ERP, it becomes straightforward to see exactly what components that needs to ordered, how much they will cost, and how the inventory is impacted by each variant.

Continuing with our bicycle example. Let’s say, the company receives a large order for mountain bikes with specific features (like specialized tires or custom seats). Managing variants in ERP makes it easy for production planners to see exactly what materials are needed, how many are in stock, and what needs to be procured. It simplifies the production and cost calculation process.

But the trade-off is that ERP systems usually does not allow deep control of the design and engineering details. They are excellent for production efficiency but not as strong when it comes to managing detailed product design features or engineering design changes especially when CAD integrations are involved.

The Role of CPQ (Configure, Price, Quote) Solutions

CPQ solutions, such as Infor CPQ, provide a powerful way to handle variants directly from the sales and customer perspective. For example, customers using a website to configure their custom built Laptop. With a well established CPQ system in place, customers select exactly which features they want, like processor type, memory size, and color. Instantly, the CPQ generates an accurate Price quote for the customer. With a seamless integration between the ERP and PLM systems, companies can instantly generate a Bill of Material from the customer’s order.

This approach makes the sales process quick and accurate, dramatically reducing errors that occur when translating customer requirements into product variants. It ensures that customers receive exactly what they ordered, improving overall satisfaction.

What’s the best approach?

Many companies find success with a blended approach. Managing the engineering data and variant definitions in PLM, using CPQ tools like Infor CPQ for customer-facing configuration and quoting, and then pushing matured, accurate variant BOMs to ERP for manufacturing and inventory management. This gives the best of all worlds, detailed, well-managed design data, an excellent sales experience, and efficient execution in manufacturing and logistics.

In simple terms, PLM can be ideal place to manage how variants are designed and defined, CPQ solutions streamline the customer interaction and quoting process, while ERP is perfect for planning and executing the manufacturing process. Using all three together efficiently, with clear integration, ensures smooth operations, less manual effort, and fewer mistakes.

Ultimately, the choice depends on the complexity of the product, the company’s manufacturing environment, customer engagement model, and how closely integrated the enterprise systems are. Understanding this can help the businesses choose wisely, save costs, and deliver products that exactly match customer expectations.