There are multiple advantages, types, and stages of the bill of materials management in the manufacturing industry. In this blog post, we will learn about the multiple stages, components, benefits, and challenges of the bill of materials management.
What Is a Bill Of Materials (BOM)?
If you are creating a product, you will need raw materials, components, assemblies, and sub-assemblies to create it. A BOM helps with this. It is an organized list of materials and items needed for manufacturing quality materials. This list can help you create a perfect roadmap for manufacturing and assembling processes for your products. It can also help you simplify all the unnecessary processes to save more time and resources.
Many types of BOM work differently. They are:
1. Manufacturing Bills Of Materials: This BOM helps you outline all the materials, sub-assemblies, and components needed for all the types of manufacturing processes. Its function depends on the engineering BOM and helps in version control and detailed assembly instructions.
2. Engineering BOMs: When your engineering team selects the needed raw materials, components, and sub-assemblies, an engineering BOM is made to carry out further operations smoothly. It’s made during the design phase and helps you focus on design and functionality.
3. Sales BOMs: A sales BOM is a comprehensive list that consists of items, raw materials, and sub-assembly parts for your production. It helps you organize an inventory of products packaged and sold as a single unit. It mostly consists of bundled products and sales kits.
4. Configuring Bills Of Materials: Configuring means organising the bills in a certain pattern or way to meet specific requirements. Customer preferences, product variants, or custom options are a few things that configure BOMs depend on.
5. Service Bill of Materials (SBOM): The service BOM is used in the fields of maintenance, repair, and servicing of products. It helps you organize spare parts inventory and manage your integrations and services.
What Is BOM Management Software?
It gets exhausting to manage all the data on components, raw materials, and sub-assembly parts. But it might be a good thing, as it can be a sign that your business is scaling. A Bill of Materials software allows you to automate all your raw materials, components, and other assembly item data before production. It’s a software or application that automates the management and organizing of all your BOM-related data.
Importance Of BOM Management Software In Manufacturing
From materials planning to supply chain, BOM management software can improve all your business operations. Below is a list of the importance of Bill of Materials management:
1. Efficient Material Planning: Provides you with accurate inventory control and better demand forecasting and streamlines your procurement processes. All this contributes to efficient material planning for your manufacturing and production.
2. Improved version control: Most of the BOM management software comes with version control. This allows you to maintain a clear history of modifications. Version control allows your workers to work with approved versions of data, reducing the risks of errors significantly.
3. Better communication and collaboration: Helps you establish a strong collaboration between all the departments involved in the production processes. It also helps all the departments to share their real-time updates and changes and improves efficiency.
4. Improves Supply chain efficiency: Helps you simplify your workflows by synchronizing data from different MLS, ERP, and PLM systems. This helps you keep your inventory and costs managed and in check.
Key Benefits Of Bill Of Materials (BOM) Management
Here are a few of the key benefits you can get from using a BOM properly in your production processes:
- Helps in production planning and streamlines your production processes by keeping all the purchase and work orders in check.
- Using multi-level BOM management, it enables you to plan out raw materials precisely and procure all the components efficiently.
- Using a proper BOM can provide you with a comprehensive list of all the required materials for your production processes. It reduces the possibilities of errors and waste of resources and improves your cost management as well.
- Proper BOM management can enable your stakeholders to access early information in your product development.
BOM Management Process: How To Efficiently Manage Bill Of Materials
BOM management consists of ensuring accuracy, consistency, and optimization throughout the production life cycle. If you are keeping these three in check, here are all the processes of bill of materials management you need in your production process:
- Demand forecasting
- Integrating BOMs with ERP systems
- Optimization of BOMs for cost efficiency
- Material planning
- Change of management
- Quality control
Challenges Of Bill Of Materials In Inventory Management
Here are all the challenges you might face with improper management of your BOMs:
1. Being inaccurate: Inaccuracy is one of the most common challenges that comes across your production processes. As multiple departments use the same BOMs for that production process, inaccurate data can lead to higher costs of goods sold and can even cause revenue loss.
2. Variations in products: If you are a manufacturer of a specific product but sometimes make specific customizations and upgrades to your products, you’d need a different BOM for every customization.
3. Outdated technology: When you are still using outdated tools, small business accounting applications, or spreadsheets. This will affect your overall performance. You will also not get real-time insights on your inventory levels, lead time, and all the other crucial data.
Tools For Creating And Managing BOMs
Today, enterprises and manufacturing industries use some of the most advanced technologies to create BOMs and manage them efficiently. Here are a couple of those technologies that you can get implemented into your company as well:
- ERP (Enterprise Resource Planning) software
- Product Lifecycle Management (PLM) systems
- CAD (Computer Aided Design) Software
- Electronic Data Interchange (EDI) Systems
Simplify Your BOM Management With TranZact
Bill of materials software from TranZact helps manufacturers interconnect several parent and child operations. These interconnections help them stay on track with their production cycles. Bill of Materials Management (BOM) is important for best resource usage and reducing production costs. However, it might get hard as your business grows. In that case, you should automate your operations with TranZact’s BOM management software. TranZact, with BOM management tool, has helped hundreds of businesses in India to smartly manage their Bill of Materials with real-time monitoring and better functionalities.
FAQs
1. What is the concept of the Bill of Materials?
A bill of material is simply an interactive list of components, materials, and sub-assemblies needed for production in a manufacturing industry.
2. What is BOM in management?
BOM management consists of processes like engineering, sales, manufacturing, supply chain, and other services. In simple terms, it helps you manage and maintain all the processes needed to manufacture a product.
3. What are the different types of BOM?
There are several types of BOM, like service, manufacturing, engineering, sales, and configurable bills of material.
4. How do you manage Bill of Materials?
When you are managing your bill of materials, it requires Capturing, configuring, and managing product data developed throughout the life cycle of your product.
5. What is the BOM generation process?
Generating BOM (Bill of Materials) process:
- BOM level
- Part number
- Part name
- Description
- Phase
- Procurement type
- Quantity
- Unit of measures
6. What is BOM in inventory management?
In inventory management, BOM is a complete list of all the items needed for a product’s manufacturing. It consists of raw materials, components, sub-assemblies, and quantity of those components.
