What is a bill of materials (BOM), and how does it impact the life of manufacturers?
If you’re assembling a product, it’s important to have a manual that specifies the correct raw materials and provides a clear step-by-step manufacturing process.
Such a document assists companies in estimating the cost of materials, planning the purchasing of these parts, and finally putting together the product in an efficient and robust manner.
In this article, we’re going to cover what a bill of materials is, the different types of BOM, and how to create your own BOM.
Bill of Materials Definition
The Chartered Institute of Procurement and Supply (CIPS) defines a bill of materials as:
“…a comprehensive list of components, items, materials and parts to create a product, essentially a recipe for the production of an item.”
To put it more simply, a BOM simply outlines what raw materials to buy, how much of each entity to purchase, and where to obtain these supplies. In addition, it contains instructions on how to produce the finished product using the purchased raw materials.
Think of it as a shopping list and recipe for creating your desired end-product.
Types of Bills of Materials
While there are several types of bills of materials to be aware of, the two most important BOMs in use as part of purchasing and supply chain management in 2020 are the Engineering Bill of Materials (EBOM) and the Manufacturing Bill of Materials (MBOM).
BOMs differ based on the project in question and the enterprise requirements.
Types of BOMs used in the manufacturing industry:
· Assembly BOM
· Configurable BOM
· Engineering BOM
· Manufacturing BOM
· Sales BOM
· Service BOM
· Single-Level BOM
Engineering Bill of Materials (EBOM)
The EBOM is a complete list of all the raw materials, parts, and components needed to fabricate a product. It also contains the assembly process as well as technical and mechanical drawings of the product.
The EBOM is typically drafted by engineers during the product design phase. Electronic Design Automation (EDA) or Computer-Aided Design (CAD) tools are employed in the EBOM creation.
Manufacturing Bill of Materials (MBOM)
This is an inclusive list of the various parts needed to generate the end-product together with the respective quantities of each component.
The procurement team relies on this particular BOM to procure stock and to furnish the enterprise resource planning (ERP) and materials requirement planning (MRP) systems with the most up-to-date information.
How to Create a Bill of Materials
The main objective of a BOM is to make sure the right parts are purchased and that the product is manufactured correctly. Working with a BOM considerably mitigates future issues and reduces the number of potential errors.
With this background, it is easy to follow the order of specifics that constitute a standard BOM. The specific elements listed below should be present when drafting your own BOM:
· BOM Level
· Part Number
· Part Name
· Unit of Measure
· Procurement Type
· Reference Designators
· BOM Notes
Figure 1 is an example bill of materials for the manufacture of a mobile phone. The actual format of a bill of materials will differ from company to company.
The information used to generate this bill of manufacture will have been extracted from either the enterprise resource planning (ERP) or materials requirement planning (MRP) systems in a process known as a ‘BOM explosion’.
Figure 1: Bill of Materials Illustration
Glossary of terms seen on a typical BOM and their respective meanings:
BOM Level: Refers to the position a raw material or assembly process fits into the hierarchy of the entire BOM structure.
Part Number: Refers to the number assigned individual components and assembly processes for easy reference.
Part Name: Each component and assembly is ascribed a unique name for streamlined identification.
Phase: Informs the corresponding stage at which each component is within the manufacturing lifecycle. This information is particularly important and is used to track progress.
Description: Describe every component in detail so that those working with the parts can distinguish between them with greater clarity.
Quantity: Quantify the number of components required so that procurement teams can readily place orders.
Unit of Measure: This refers to the measurements of parts and can be in inches, feet, drops, ounces, or whatever is most appropriate.
Procurement Type: Explain how every component is bought or created. This greatly assists in improving planning, procurement, and manufacturing capabilities.
Reference Designators: For products set to carry printed circuit board assemblies (PCBAs), reference designators outlining how the specific components fit into the BOM should be included.
BOM Notes: These are additional comments, notes, recommendations, and suggestions that can shed more light on matters relating to the BOM.
A bill of materials is extremely invaluable because it serves to guide manufacturing activities such as
- sourcing of parts and,
- as well as providing product assembly procedures.
Bills of materials are a foundational aspect of the manufacturing industry. All manufacturers begin the production journey by creating a BOM.
Understanding the various types of BOM and knowing how to create one alongside the use of reliable procurement software will greatly improve your business operations.
Fortunately, you don’t have to look far for robust software.
ProcurePort is one of the top providers of cutting-edge innovative procurement solutions including supplier management software and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
Schedule a demo of our technologies. Alternatively, contact us to discuss tailored procurement solutions.