A Bill of Material, as the name suggests, is an extensive list of raw materials, parts and components, product structure, drawings, and other documents, needed to manufacture a product.
A BoM also includes the quantities in which each item is needed along with their names, descriptions, and costs. To make things even easier, a BoM often has instructions for procuring and using these materials. In a nutshell, it is like a recipe page for a product.
How is a Bill of Material (BoM) used?
A bill of materials ensures that multiple manufacturing and supply chain processes are efficient in their product costing, inventory planning, scheduling, production, and materials requirement planning. By listing down the pricing and number of items needed before actual production, a BoM provides the company with clarity on whether they have everything that they need for the manufacturing of the product. In doing so, it minimizes the risks of delays, material shortages and overages. To sum it up, a BoM supports manufacturing your products on time and on budget.
What should a Bill of Materials include?
As a central record of all the components, materials and processes used to build a product, the BoM has 10 key elements that are included in it. These are:
- BoM Level: A Bill of materials is strictly hierarchical in nature, which means that there is an order that must be followed. The BoM level helps maintain this hierarchy by assigning a unique number to each part/assembly so that it is clear where each part/assembly stands in the BOM hierarchy.
- Part Number: Quickly identify any item/assembly in the BoM by assigning a part number to it. Part numbers include not just a number but also a small text indicative of the item. This makes the part number intelligent i.e., they have a description of the item. For example, a part number for a screw maybe “SCREW-003”. However, not all part numbers may be intelligent, which means they may have no text in them.
- Part Name: Like a part number, part names help quickly identify the item in the BoM list.
- Phase: As the term suggests, phase is for outlining at what phase each product/item is in, in its lifecycle. This helps to easily track progress and create realistic project timelines.
- Description: Description allows for more detailed information on each part/item. This would help in distinguishing items that are like each other.
- Quantity: Quantity records the number of items/parts needed for each assembly or subassembly.
- Unit of Measure: Each part/item is classified with a certain unit of measure. This can be in ounces, inches, feet, or kilograms. This helps an organization ensure that the right quantities are ordered for production. Any unit of measure is suitable however, it needs to be consistent throughout the BoM to avoid confusion.
- Procurement Type: This shows how a component or part is obtained. Typically, a part/component may either have been purchased, manufactured internally, or delivered by subcontractors.
- Reference Designator: Any products containing printed circuit-board assemblies need a reference designator. Reference designators help save time and avoid confusion by outlining where each part goes within the circuit.
- BoM notes: Any instructions or relevant details can be included here.
Why is a BoM hard to create and manage?
Although a Bill of Materials can be crucial in the product development stage of any company, creating and managing a BoM manually is far from easy. Manual maintaining the BoM can be a tedious affair that can take hours. It can also be costly to hire someone to manually enter data into a BoM, especially since humans are prone to making errors. Subsequently, these errors can later lead to incorrect product costs, products being made incorrectly, inventory overages or shortages and production delays.
How can Companies create an accurate Bill of Materials in a short period of time?
To create an accurate Bill of Materials within a short period of time, companies should invest in a robust ERP system. ERP systems can automate the tracking of changes to BoMs and identify discrepancies that can occur when multiple departments such as engineering and manufacturing generate BoMs for the same product.
