What is Bill of Materials?
Specifying in detail how the products are getting made is essential for every manufacturer, it really ties the room together so to speak. Sometimes Bill of Materials (BOM) is also referred as Production Recipe, Assembly Component List etc. In this post, we are looking at Manufacturing BOM.
While searching for the illustration for the blog entry I came to realize that we are basically talking about the DNA helix of the product. Maybe not the exact analogy but it will bring the idea across, plus it solved my problem with ugly Bill of Materials pictures.
Benefits of BOM
A Bill of Materials is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts and the quantities of each needed to manufacture an end product.
In Lean Manufacturing, which has quickly become a dominant assembly method nowadays, a BOM includes more parameters which traditionally were handled as separate structures (such as Operations and Routings for example), it may include parameters like effort and equipment required to build a product. Although it is an essential part of the manufacturing process, there’s a lot of discussion online about why Bill of Materials is important.
With a clear list of materials, quantities and inventories you will ensure you won't run out of materials. By using BOM, MRP software will remind you when stock is running too low.
Thanks to BOM, knowing the required inventory levels, process involved and the time it takes to manufacture, results timely and predictable delivery process. By knowing how everything is functioning at every step along the way you are able to better ensure that each step happens on time when it needs to. With better planning comes more accurate knowledge on how much time a job will take. This allows your team to cost up jobs and orders more effectively, making more profit.
Another reason why a BOM is essential in manufacturing is its ability to help decrease waste. By knowing exactly what is needed and bringing in the right parts, you aren’t left with excess inventory because you know how many would be needed, and you aren’t left with incorrectly assembled products that are unusable. With excess inventory alone you are tying up resources that could be put to use, and with unusable products you are throwing away your money.
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BOMs that describe the sub-assemblies are referred to as modular BOMs.
The main reason why modular BOMs are used is that the job of maintaining the BOM is much simpler (given that the assembly list of the product is long and complex, and maintenance does not require a complete overhaul of the BOM each time).
A configurable bill of materials (CBOM) is a form of BOM used by industries that have multiple options and highly configurable products.
The CBOM is used to dynamically create products that a company sells. The benefit of using CBOM structure is that it reduces the work-effort needed to maintain product structures. The configurable BOM is most frequently driven by "configurator" software.
An example: http://www.configuremyproduct.com/
The development of the CBOM is dependent on having a modular BOM structure in place. The modular BOM structure provides the assemblies/sub-systems that can be selected to "configure" an end-item.
A multi-level bill of materials (BOM), or referred as an indented BOM, is a bill of materials that lists the components, assemblies, and parts required to make a product. It provides a display of all items that are in parent-children relationships. When an item is a sub-component, unfinished part, etc., all of its components, including finished parts and raw materials, are also exhibited. A multi-level structure can be illustrated by a tree with several levels. In contrast, a single-level structure only consists of one level of children in components, assemblies and material.
In order to make your manufacturing process more effective you may want to "enrich" the BoM structure with more parameters:
- Lead Time - the time between the initiation and completion of an assembly process
- Scrap factor - the percentage of components and/or materials ruined during manufacturing operations
- Quality criteria - upfront defined measurable tests and test results in order to confirm that the quality objectives of an assembly process have been met
- Done criteria - an upfront agreement of assembly steps and tasks which need to be completed in order to complete the assembly process
- Roll-up Cost - calculates the standard cost based on the BOM and routings of assembling the product
It all depends on the manufacturing process and what data has to be provided to production manager (or software what is used to manage the production).
This is a brief overview of the Bill of Materials, what is it for and how it's used. You may want to write to us and link your favourite examples below, how BoMs are visually represented and how it should be implemented as software.
Katana MRP software helps you manage your BOM structure and many other production processes. Use the 30-day free trial to see how it can help your business.