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How to Create an Effective Bill of Materials

ERP Modules

Tuesday, 19 January 2021
Omni Accounts
How to Create an Effective Bill of Materials

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How to Create an Effective Bill of Materials

Learn how to create an effective Bill of Materials (BOM) with key considerations to get you started. Knowing what you need before you start will save you time in the long run.

What is a Bill of Materials?

A BOM includes a full list of all the material items needed to create a product, alongside the instructions for gathering and using them. It’s how what and where of the required materials ensuring whatever product is being built, is built correctly. 

What is Included in a Bill of Materials?

A comprehensive Bill of Materials will include some form of the items listed below:

  • Manufacturer Name: All components will have the manufacturer’s name to ensure they’re available and suitable for the project. 
  • BOM Level: Each part has a number to outline where it fits into the BOM hierarchy. 
  • Part Number: All parts are clearly numbered for easy reference and assembly. 
  • Part Name and Description: Parts will be named and descriptions are given for easy identification.
  • Phases: This records the stage of each part in the production. 
  • Unit of Measure: When classifying parts' measurement, it's best to use standard units and ensure consistency. 
  • Product Colour: By specifying the colour of the product, you can keep track of the BOM and ensure no mistakes are made. This is particularly important if there are several colour variants. 
  • Quantity: This is a record of the number of parts needed to help in assembly. 
  • Procurement Type: This helps secure the right part and describes how the component is made (customised or off-the-shelf).
  • Reference Designators: These will detail where the part fits on the Bill of Materials' printed circuit board.
  • Priority Analysis: Reference the most critical parts to allow for sufficient lead times and budgeting. 
  • Alternate Parts: If you’re able to include these, this could reduce lost time on the project. 
  • Notes and Comments: This can increase the project’s efficiency as you’re keeping track of any changes or interruptions.

What to Remember When Creating a Bill of Materials

In crafting your Bill of Materials, there are certain factors that you need to consider to enhance your project’s turnaround time and success rate. These are:

1. Customise the Bill of Materials

You’ll need to take the BOM and adjust the design to suit your particular project's requirements. You can do this by creating a template that is compatible across the entire company. 

2. Include All the Above-Mentioned Details

The more detail you add to your BOM, the more streamlined the process will be. Ensure your BOM is as clear, detailed and accurate as possible from the start so that it’s easier for everybody to use.  

3. Check Before Distributing

Make sure you check the entire Bill of Materials – and get someone else to check as well – before you upload or send the document onto anyone. As mentioned, accuracy is key to creating an effective BOM. 

4. Monitor Changes Clearly

You need to clearly label the latest version of the Bill of Materials so that you can keep track of where you’re at and that no mistakes are made working off an older BOM.

5. Regulate Access To The BOM

The Bill of Materials will need to be viewed by several different people working on the project, but this doesn’t mean they’ll all need access to editing of the document. It’s best to limit the number of people who can edit the BOM to minimise human error. 

6. Choose Your BOM Software Carefully

It’s really valuable to work with a BOM software provider who can talk you through the features and options that will suit your particular project requirements. The automation of your BOM process will also enhance traceability and minimise the risk of error. 

What Questions to Ask When Compiling a Bill of Materials

Before you get to creating an effective Bill of Materials, here are a few questions you could run through. 

Q1: What Is the Project?

The key to the Bill of Materials is what is being built. This will determine the complexity of the BOM and the programme design required. Once again, this can guide you on the particular programme that will best meet your needs. 

Q2: What Management System Will Be Used?

As discussed earlier, your Bill of Materials will go through many changes, and everyone must be working off the latest version. Outline how the changes will be tracked and managed so that there’s no confusion. 

Q3: Who Can Access the Document?

It’s important to outline who will have access to the document and in what capacity. Certain departments will be key to the production process, but you must limit the editing capabilities not to lose track of the latest version.

Q4: What Details Will Be Included in the BOM?

Discuss with the team exactly what categories will be included in the Bill of Materials and make sure you’re able to include as much detail as possible for each category. 

Why is a Bill of Materials Important?

It might seem like a lot of work – although, with the right BOM programme, this shouldn’t be the case – a BOM is essential for your build project. Here’s why:

Reason1: Easy Procurement

Because the Bill of Materials gives you a detailed list of raw materials needed, you’re easily able to complete the procurement process and remain within budget. 

Reason2: Improved Project Planning

The BOM puts everyone on the same page and gives the planners are the data necessary to map out the project route and timelines. Because of the ease of access to the Bill of Materials, all departments work cohesively, making for a better working environment and less risk. 

Reason3: Keep Track of Materials

Running out of material in the middle of a project can delay the entire process, which is why having an exact list of materials and quantities will keep you right on track. The latest BOM software will also alert you when stock levels are running low. 

Reason4: Stick to the Budget

Because all the raw materials and quantities are so clearly outlined, you have a much more accurate figure of the project cost and your sales’ team can also determine job costing with greater ease. This way, you’re much less likely to break the budget for the build project. 

Reason5: Saves on Time

When you’ve so clearly outlined the quantity of each component, as well as managing the stock levels of these components through the BOM system, you will be saving on time as you’re not waiting for new stock to arrive. 

Reason6: Less Waste

There is less excess inventory because you’re better managing stock levels. Using BOM, you know exactly how much is needed, and when, so there’s less chance of waste at the end of the project. 

What Are The Types of BOM?

There are many different types of Bill of Materials available today, suited to all manner of industries. You need to partner with a software supplier that has a more intimate understanding of your particular business. 

- Engineering Bill of Materials (eBOM)

Using CAD (Computer-Aided Design) and EDA (Electronic Design Automation) tools, the eBOM can be effectively developed in the product design phase. Included in this particular BOM are parts, components and assemblies of the product. 

- Assembly Bill of Materials

These can be single-level or multi-level BOMs which list the sales’ item, rather than the inventory item, as the parent item. 

1. Single-level Bill of Materials

This is for more simple products that don’t require sub-assemblies. The BOM should include the part numbers and allows for one level of components, material and assemblies.

2. Multi-level Bill of Materials

This is for more complex constructions that require sub-assemblies and even further levels of sub-assemblies if needed. 

- Sales Bill of Materials

This will detail a finished product before its assembly with the finished product and components listed as separate items. 

- Manufacturing Bill of Materials (mBOM)

This will demonstrate all the parts and assemblies needed in the manufacture of a product, integrating all business systems involved including MRP (materials’ resource planning), ERP (enterprise resource planning) and MES (manufacturing execution system). 

- Service Bill of Materials

This will consist of the parts, installation outline and repair instructions for service technicians to use when they’re either servicing or installing a product. 

- Production Bill of Materials

When you need to make a production order, this BOM will outline the finished product's components, listing the prices, description and quantities. 

- Template Bill of Materials

This flexible format can be used in either production or sales’ BOM, with components easily swapped out, replaced or deleted. 

- Configurable BOM (cBOM)

This outlines the components needed in the design and manufacture material for more highly-configurable products like industrial machinery. 

By partnering with a reputable Bill of Materials software supplier, such as Omni Accounts, you’re able to benefit from a customised solution to your industry and project needs.



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