What is a Bill of Materials?

If you are more connected to the manufacturing industry, ‘Bill of Materials’ is a term that you will easily tune your ears into. A Bill of Materials, commonly abbreviated as BOM, is an extensively organised list of components and phases that are equipped and followed to manufacture a product. It spans from the initial stages to the last step of manufacturing a specific unit. In other words, it would contain minute details from raw materials, to the assemblies of each component and ultimately, the finished product of a manufacturing firm. These contents can be serial numbers of product parts, vendor details, procurement type, manufacturing details, quantities of materials, product descriptions, statuses, effective from which date till when and much more information. BOM is crucial in many occasions to make business decisions in multiple aspects; making a deep understanding of BOM a vital piece of knowledge for any organisation. Moreover, the details of the BOM play a vital role in determining the price of the product with regard to the margin and production cost. This informative article targets to guide you in understanding why and how you can create comprehensive Bills of Material in your organisation and what are the advantages you can exploit by doing so.

Types of Bills of Materials

As we know that Bills of Material are product structures that display all the materials, intermediate assemblies, quantities of materials and more; a very informative and directive document used by manufacturing and engineering firms. Generally, Bills of Material can either be:

single-levelled BOM: When the BOM only requires a single assemble of sub–assembly to list all components; no parent or children categories will be charted in this type, or

multi-levelled BOM: If the product has complex production stages and there are more than one subassembly to be illustrated in the product. The hierarchical relationship between the parent assemblies and the clid sub assemblies will be comprehensively displayed in these Bills of Materials.

The organisation’s unique demands would decide on how precise they would want their Bills of Material to be. However, Bills of Materials has many types, and amongst them, there are two most common types, namely ‘Manufacturing Bill of Materials’ and ‘Engineering Bill of Materials’. These two types are explained briefly below.

Manufacturing Bill of Materials (mBOM)

mBOM is focused on the parts of the product that needs to be assembled to result in a quality or desired unit- finished good. As the name suggests, manufacturing specialists use this type of Bills of Material to list down the necessary materials and product production directives to produce a specific product. Defining a product via mBOM mitigates the manufacturing processes and decision-making protocols astoundingly. It allows the manufacturing managers to have enough data when:

  • Planning to order material purchases,
  • Estimating the total or partial production costs incurred for a single unit,
  • End-to-end controlling of the inventories,
  • Keeping track of material and equipment requirements and shortages,
  • Assuring optimal manufacturing process scheduling,
  • Minimising the material wastages during production and more.

mBOM would reflect the manufacturing processes of the product by transitionally explaining it in subassemblies. The finished product that is represented by the mBOM would also include the methods of creating the packaging and required manuals (or any instructional document that illustrates how to use the product), and not just the completion of the Parent Product. Sometimes the details in mBOM would go as detailed into the usage of software and firmware in manufacturing, or on how the electrical and mechanical utilities were used and more. The included facts will show how each manufactured product would have parts that are related to each other and ultimately makes the product exhaustive. These documents are essential when conveniently launching the procedures of technological solutions such as ERP, MRP and MES. The key to preparing an effective mBOM is precise detailing and completeness.

Engineering Bill of Materials (eBOM)
eBOM is a documentation that is developed when a product is still at the designing stage (unlike when being manufactured like in the context of mBOM). eBOMs are often based on Electronic Design Automation (EDA tools) or Computer-Aided Design (CAD tools) digital utensils. It comprises all end-to-end details -parts, sub-components, items, assemblies, and subassemblies of the desired product- as explained by an enterprise’s engineering team. Also, unlike eBOM it would not mention any detail about secondary procedures such as packaging or documentation and will always be confined to the details for a single engineering discipline. It treats the product more “as designed” rather than “as shipped”.

Apart from these two most common types, some other Bills of Material are used by enterprises to have a sound understanding of their products and services. This shows that Bills of Material are not confined just to manufacturing or production planning. It can be applied when structuring service deliveries and product creation at different levels or stages. Some of the examples for such categories are:

  • Sales Bill of Materials
  • Service Bill of Materials
  • Production Bill of Materials
  • Assembly Bill of Materials
  • Configurable Bill of Materials (cBOM)
  • Template Bill of Materials

Why must Bills of Material be optimally managed in your organisation?

As Bills of Material are a valuable centralised source of information for companies, especially for manufacturing firms, they must be optimally managed. Because Bills of Material guide how to create an item or service step by step. One of the most prominent advantages of referring to comprehensive Bills of Material and optimally managing them is because they ensure that all the needful resources are available in production. Suppose a manufacturing firm oversees the crucial information that is being represented by a BOM. In that case, it can lead to detrimental outcomes, such as, expensive factory downtimes, wastages of resources, time and plant space, and many other inconveniences in production process scheduling. Therefore, Bills of Material can be defined as a formula to factory operation and product manufacturing success’. Some of the reasons why you should optimally manage Bills of Material in your organisation is given below:

  • It provides a reliable framework to ensure the uniformity of production operations
  • Since it provides a guide to manufacturing in a hierarchical model, workers can save time; they could plan their jobs and schedule their work and check for the resources needed to streamline their work.
  • Since Bills of Material represent the most cost-efficient methods of producing something, they are always providing a trust-worthy basis for inventory management and saves possible idle times in the factory; which ultimately reduces costs.

Does Technology enable BOM Software; is it efficient?

It is not an amusing fact that Technology has been elevating manufacturing and service delivering organisations within every passing minute. Technology plays a prominent role in our topic too. Product Life Cycle Management Software and other manufacture-oriented technological solutions are highly integrative with BOM software because BOM generation is paramount in organisations. Apart from Bills of Material enabling comprehensive libraries of parts, combining parts and routing ways to manufacture products, they become extra convenient when generated by a computerised system; yes, they are singularly efficient.

1. Real-time Updates: Since the software can be programmed to be perfectly integrable with the existing software solutions of a corporate the BOM software would identify the most current data and alter their information by aligning the current availabilities.

2. Amazing navigational conveniences: Practically a single company would have more than one BOM, maybe hundreds of Bills of Material. A BOM software would handle libraries of Bills of Material efficiently. They can arrange the directories to be sorted or filtered the way the user needs it. A competent attribute search option can be incorporated in the BOM directory list for even more convenience.

3. User-friendliness: Customisable and interactive dashboards can be accommodated in BOM software. The manufacturing managers and decision-making parties can monitor the plant-wide operations using the information of Bills of Material. For example, a manager can apprehend the quality of a finished product by reading the ‘Quality Criteria’ mentioned in BOM using a mobile device while assessing the factory’s performance.

4. Enables Remarkable Analytical Insights: Quality Assurance Managers and Auditors can use the basic information of the Bills of Material to grasp insightful information about their organisations’ actual performances. Bills of Material can even include compliance regulations so that the managers can make sure that they are within the required scopes all time.

5. Upgradable: The ability to flexibly upgrade the content of the BOM software is another advantage. BOM revisions can be made without any dispute by using BOM software. Information about these revisions can also be conveniently saved in the software for later studies since past data is vital for any corporation.

7. Security Measures: One of the most important features of using BOM modules in your production process software is the sensitivity of the data that it shares. Access restrictions can be imposed to ensure that the BOM details are not being fraudulently misused or shared by unpermitted users. For example, a hotel would have secret recipes and confidential techniques in making signature dishes, so on occasions like these protecting BOM’s data should not be taken lightly.

8. Wide-angled Visibility: BOM software allows you to have complete end to end visibilities of each component, products and entirely manage the workflows under one glass pane. You will also have the efficacy of capturing real time data such as:

  • Real-time phase updates (i.e. In-design or in-production)
  • Procurement Type Details
  • Availability and shortages of components and more
  • Being updated on specific BOM notes

Conclusion

A Bill of Materials is documentation that has a great impact on the successful exertion of manufacturing operations and managerial endeavours of factory managers. Bills of Material give enterprises an overhead of managing every phase of producing products or high standards and delivering services, making them a primary source of information to any company. This is all the same reason why Bills of Material must be automated and optimally managed by any organisation. Organisations that use intelligent and competent BOM software would easily whip up discoveries and manage their revised product revamping efforts effortlessly. We hope you are now well-versed why you must adopt a reliable BOM software and the basic functions of a BOM that makes sure to keep you on top of your dynamic markets.