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Understanding BOMs (Bill of Materials) and How To Successfully Use It?

BOM, or Bill of Materials is a comprehensive list of all the parts, materials, components, quantities, and instructions required to assemble a product. It’s rather like the recipe for baking a cake. It tells you how much of each ingredient you need when to add it, and how to bake or process it. The Bill of Materials is usually presented in a hierarchical format whereby the component needed in the greatest amount is listed first, all the way to the least required ingredient.

Companies that build products usually start the manufacturing process by creating with a bill of materials. It is vitally important to ensure that the bill of materials is accurate because it ensures that the assembly process can be as smooth and efficient as possible by making sure that parts or components are available as and when they are needed in the manufacturing process. If a bill of materials is erroneous it can cause a breakdown in production- causing time to be lost. As we all know: time is money!

Varieties of BOMs

There are different types of BOMs depending on the business or product type and industry, but this is more common in the areas of design, construction, engineering, and manufacturing to name but a few. The bill of materials generally feeds back into a bigger ERP system (Enterprise Resource Planning system). The bill of materials requires a great deal of cross-department collaboration where the design and planning teams need to work with purchasing and also manufacturing or operations to make sure that the final product is accurate and well costed.

The process of building your BOM is relatively simple. It tends to be finding and accurately inputting the data that is more of the challenge. Below we set out some key steps in ensuring your bill of materials is correctly created so that it can provide the best possible support for your business.

Ask the Important Questions

What exactly is being built? It’s important to really nail down all the components and separate processes involved in your total business process. Usually, companies require multiple BOM or multi-layer BOMs that are later combined to create the final assembly BOM. Sometimes external suppliers need to process one of the steps and this also needs to be accurately captured in the BOM.

Assign BOM Owners

You also need to make sure you know and assign the correct people to manage the bill of materials. The BOM is a live document and it is essential that the latest and correct version is always in use. Raw materials can vary and so can processes, as well as product specifications, so it is essential that your BOM is up-to-date and that change rights are allocated to a very select group of people in order to minimise the risk of incorrect versions being used.

Automate your BOM

The next step here is to automate your BOM. In an automated BOM, the different departments can have live access to the changing BOM. Design/engineering can see what parts are on-hand or where alternatives need to be researched, purchasing can see what parts and components need to be sourced and costed, and manufacturing can see if any preparation or changes are needed to unique part assemblies. Here a good ERP system is invaluable as it ensures that the applicable information is not only updated in real-time but available for all departments that need to make decisions based on the latest BOM data.

Your BOM is a little like the blueprint of your manufacturing or assembly company. Without accurate data, and well-researched planning, projects can go badly awry, costs can soar and customer deadlines can be badly affected. A thorough and well-managed bill of materials is an essential backbone to any business that relies on production.