We wanted to start this article with a joke about procurement, but we didn’t think you’d buy it. So, instead, we’ll dive straight in with this — what’s the easiest way to find your missing manufacturing inventory? Place a new procurement order.

OK, there’s a reason for the dad jokes. BOM procurement processes can be tricky things to get right. If only there was a way to make them simpler. Well, guess what, there is. Sit back and relax — this article has got you covered.

What is a BOM?

Let’s start with the basics, and define what a BOM is. A bill of materials (BOM) is a comprehensive list of all parts, components, and materials that are needed to create a product from scratch. 

A BOM plays an essential role in ensuring that all the materials are ordered, delivered, and used at the right time and for the right price. 

Now, that’s the definition out of the way — we’ll see how this can assist with the process of procurement. 

What’s the role of a BOM in the procurement process?

BOMs play an essential role in the process of procurement. They offer accurate and detailed information about all the following factors:

• Components and materials needed to manufacture a product
• BOM cost reduction
• Planning budgets
• Ensuring that all materials are delivered on time 

When it comes to the final production planning and scheduling for manufacturing and the packaging and delivery of a finished item, BOM procurement will help manufacturers comply with all the right regulations.

The BOM is an essential tool for manufacturers. Therefore it must be carefully implemented and managed to make sure all the procurement processes run smoothly.

Benefits of a BOM for procurement 

There are various benefits to be unlocked when developing a BOM for procurement. For one thing, they offer detailed info about all the components required to manufacture the product. This means that buying teams can efficiently plan and execute purchasing strategies.

So, let’s look at this a bit more closely. One of the first ways a BOM helps with procurement is by ensuring accurate BOM inventory management. When a manufacturing team has a proper guide to all the components it needs, a procurement team can simply work out what needs to be ordered and when. Long-term, this stops overbuying — or underbuying — and it means that stock levels can be consistently maintained throughout the process. 

BOMs ensure better cost control during the procurement process. Buyers will know what parts are needed for each product. They can then go on to negotiate better prices with suppliers and acquire volume discounts for buying in bulk. 

Procurement BOMs used effectively mean there’s better communication and collaboration with suppliers and buyers. If both groups have the same access to the right, detailed information, it makes it easier to work out product specifications and make the correct decisions as a group. 

There’s also the aspect of quality control to be considered. BOMs will give procurement teams very specific information about the characteristics of each product and component. This means that everything is delivered to a specific standard and the right quality. 

So, to sum up, incorporating BOM materials into procurement processes brings numerous benefits:

• Improved management of inventory
• Better cost control opportunities
• Better negotiations with suppliers
• Improved collaboration with stakeholders
• Effective quality control measures  
• Efficient supply chain operation

Best practices for BOMs and procurement

It’s clear procurement processes need a BOM to help them flow smoothly — unlike the dad jokes at the start of this piece — but what are the best practices for their use? Here are some key strategies for using a BOM effectively in procurement. 

Keep documents up to date and accurate — Keeping a BOM up to date and maintained regularly will help simplify the procurement process and avoid delays or mistakes in inventory and manufacturing. 

Use real-time visibility solutions — There are technology solutions that assist in providing real-time insights into stock levels and how a supplier is performing related to the BOM. Using such tech means that quicker and more proactive decisions can be taken, and there’s less chance of supply chain disruptions. 

Source strategically — Constant checking and evaluation of the procurement sources used, within the BOM can help ensure that pricing stays competitive, there’s better quality assurance, and a timely delivery of final products. 

Monitor improvements and changes regularly — Taking time to regularly check data and monitor it means it’s easier to identify any areas for improvement within the supply chain or procurement process. 

Taking some time to implement these ideas can help maximize the benefits of a BOM for procurement processes. Ultimately this leads to a happier manufacturing team, better productivity, and enhanced profitability. 

Procurement BOMs and Katana — a perfect fit

How are your procurement processes fairing? If they’re looking a bit jaded, it’s time to give them a boost. Katana’s bill of materials software gives your manufacturing business a new lease of life. 

Explore our BOM tools and you’ll discover how they can make a world of difference to every task you undertake. With solutions for production planning and scheduling, it’s never been easier to automate workflows and get the most out of your team. 

Katana’s software solutions are there on every step of the journey. Take one of our demos today and see the real-time difference our amazing products can make to your company. 

FAQs

Ioana Neamt

Contributing Writer

With more than 10 years of copywriting experience, Ioana has a fondness for longform writing, investigative journalism, cats, and Victorian-style mansions.