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Bill of Materials (BOM): A Guide for Manufacturers | Omni Accounts

Bill of Materials (BOM): A Guide for Manufacturers | Omni Accounts

Bill of Materials (BOM): A Guide for Manufacturers | Omni Accounts

Ever wonder how a Bill of Materials (BOM) impacts the manufacturing process?

A BOM is one of the most important documents for any product development and production team. This article will go over what it means to have a BOM and why they’re so crucial for the whole process.

What is a Bill of Materials in Manufacturing?

A Bill of Materials is a list that tells us what the raw material, sub-assemblies, and parts are for building something. It can be used to track inventory or as a guide in manufacturing. A Bill of Materials (BOM) is not just limited to small businesses either; it’s common practice among larger companies too.

Having a blueprint that lists all the parts and components required to produce your product, and one that each stakeholder can access at any given time is an essential foundation for any project.

An effective BOM includes different dimensions, raw material specifications, costs, quality levels, work-in-progress information, and forecasted lead times for each component.

Benefits and Drawbacks Using Bill of Materials

When used correctly, an accurate bill of materials is a great way to help companies manage their inventory and avoid costly mistakes. One of the biggest benefits is that it allows you to see all components and processes in one place. The blueprint for a product should be available to all team players and kept updated as changes and amendments inevitably arise.

The primary drawback is that it can take a significant amount of time to create and maintain. This is especially true when a company has multiple products and parts to manage.

However, it’s clear that the pros outweigh the cons in this instance, and a well-thought-out mBOM will streamline the entire process.

Common Mistakes When Creating A Bill of Materials

While many people believe they have created a complete list of items for making an accurate BOM, there are some common mistakes to avoid.

Mistake # One: Missing Parts from the Bill of Materials

If a part needs to be replaced or is out of stock, it can create problems. If you miss an important item on the list, there will not be enough material for production, and orders could take longer than expected. This may also lead to other unwanted consequences and could hold up the entire production.

Mistake # Two: Forgetting Consumables

Consumable costs can slip through the cracks but are still an essential part of the production process. These items include things like tools, lubricants, and adhesives. If a needed item is missing from this often-forgotten list, then production could come to a halt.

Mistake # Three: Forgetting Assembly Processes

If you forget an assembly process or process task, you may end up with an incomplete product. This is why assembling a BOM and breaking down each process step by step can help avoid costly mistakes like this one.

Mistake # Four: Shipping and Packaging

Shipping and packaging are a necessary part of the process. A solid BOM in manufacturing will include the production and assembly of a product right up to shipping. If you forget to account for these costs, then this could lead to lost profits.

Mistake # Five: Wrong Component Quantity/Inaccurate Inventory

Inaccurate inventory or miscommunication on the quantity of a component can have a massive knock-on effect on production lead times and assembly time. This can also impact the quality of the final product.

Looking at these common mistakes, it makes sense to use the incredibly useful technology available to solve these exact problems when creating a BOM in manufacturing. More about that in a moment.

How do you Structure a Bill of Materials?

The goal of a Bill of Materials is to make sure that you have the right components in place for seamless production. There are several ways this can be done, and it all depends on your needs.

Some people prefer an assembly-based Bill of Materials where they list out each component required from step one (assembly) to the end result.

Others prefer to list each component required for the end-product. The advantage of this method is that it gives you an accurate and comprehensive idea of what’s needed to produce your product while also providing a checklist with all necessary components listed in sequential order.

An excellent course of action is to create a Bill of Materials through collaboration with your manufacturing partners. Two heads are better than one, don’t you agree?

Competing on a Global Stage

The right data is essential to an organisation’s success in the global market. Without access to or understanding of their product, it would be difficult for companies to compete globally.

In a world where Manufacturing and Computer-Aided Design models are insufficient alone, Product Lifestyle Management (PLM) becomes more important than ever before. By managing BOMs across functional areas such as mechanical content, electrical content, embedded software, or engineering calculations, businesses have access to rich definitions of products that fulfill requirements for international competition.

As technology advances and products become more complex, manufacturers are finding it increasingly necessary to have a central repository of all the different forms of data for their products.

This single “source of truth” offers smart manufacturers a leg up in a competitive market. If you’ve been struggling with compiling and managing a Bill of Material for your manufacturing business, we’d like to invite you to chat with one of our team.

We have the solution you’ve been looking for.