Bill of Materials or BOM

A bill of materials is used in the manufacturer of a product and should contain raw materials, sub-assemblies, sub-components, parts and the quantities of each. Each line of the bill of materials (BOM) will include the part number of the item, description, quantity, unit of measure, and a procurement type which describes if the part is purchased or manufactured. There are a number of different types of bill of materials such as the engineering bill of materials, the manufacturing bill of materials, and the equipment bill of materials.

The different types of bill of materials depend on the business need and use for which they are intended.

Engineering Bill of Materials

The engineering bill of materials or engineering BOM, defines the finished product as it was designed. The engineering BOM lists the items, parts, components, sub-assemblies and assemblies in the product designed by engineering. The engineering BOM is often organized by engineers based on a Computer-Aided Design (CAD) drawing. For a finished product there may be more than one engineering BOM created.

It is important to create an accurate bill of material, especially for a new product, as it is vital for the correct parts to be available when the item is being manufactured. To ensure that the parts are available when required, the purchasing department needs information on what vendors need to be used to purchase items from and the lead times of each part that is ordered.

The purchasing department will negotiate to obtain the best price for each part to reduce the overall cost of the finished product.

If the bill of materials is not correct this can cause problems. If the quantity of a line item is incorrect this can cause production to be stopped, and the delay can cost a company as they would either need to find the missing parts, or start another production order.

Manufacturing Bill of Materials

The manufacturing bill of materials, also referred to as the manufacturing BOM, contains all the parts and assemblies required to build a complete and shippable product. This includes all the packaging materials required to ship the finished product to the customer. The bill of materials will also include any processes that need to be performed on the item before it is completed. The manufacturing bill of materials stores all the information required for manufacturing activities. When MRP is run the bill of materials are exploded for the finished products that have been ordered by customers. The MRP process takes the details from the manufacturing bill of materials and calculates, based on the suggested delivery date to the customer, whether materials are need to be purchased and when the manufacturing order needs to be started.

There are a number of elements to a bill of materials that needs to be decided when creating a BOM. For some companies the bill of material should have a validity date range. For new products that are being introduced to the market, the manufacturer may only be testing the product on a test market so they may want to restrict the use of the BOM to a month or two months.

If, after the test period, the product requires some modification, either to key elements or to packaging, the bill of materials can be changed and a new validity date is established or a new BOM would be created.

The manufacturing bill of materials (MBOM) is a set of documents which contains all the parts and assemblies required to build a complete and shippable product. This includes packaging materials like colored boxes, CDs and printed quickstart guides. It also incorporates items that are used in the assembly process, like liquid adhesives or tape. Both off-the-shelf (OTS) components and custom, made-to-specification (MTS) parts belong on a manufacturing bill of materials, as well as non-tangible items like firmware. Any item that can be found in the final boxed product needs to be included at some level of the manufacturing BOM.

Some parts require processing—like pad printing, painting or programming—before they are ready to be assembled into a final product. While only the altered part is assembled into the final product, both the pre-processed base part and the finished part are represented on the manufacturing BOM. The manufacturing team needs to know about all the processing steps in order to make critical decisions about which steps will be performed in-house and which will get outsourced to a separate vendor. The location of the processing may be changed during the life of the product to reduce costs, improve quality or increase flexibility.

Need –  The bill of materials for manufacturing enables the final transition from product concept to a concrete, touchable object. The more accurate and complete the contents of the manufacturing bill of materials are, the better the decisions you can make about how to get the product efficiently and cost-effectively into the customer’s hand.

How and where a part will be made impacts the purchasing of components and processed parts, the availability of inventory and the contents of build kits on the manufacturing line. It determines what steps happen on the assembly floor during the production run and what happens ahead of time (possibly at another vendor). Options like these create trade-offs between time, money and control, and those decisions need to be managed as part of the new product introduction (NPI) process. The accuracy and completeness of a manufacturing bill of materials allow a company to make better trade-offs and improve its ability to successfully ramp, build and introduce a new product.

The manufacturing bill of materials drives manufacturing, operations, purchasing and logistics for a product. The information from the MBOM feeds the business systems used to order parts and build the product. These include enterprise resource planning (ERP), materials resource planning (MRP) and manufacturing execution system (MES) solutions.

Inaccuracies in a manufacturing BOM lead to problems: If the wrong parts or wrong quantities of parts are ordered, a company will not be able to build enough product—or any product at all. This leaves the company with unusable components that need to be returned or extra parts that tie up money in inventory. For manufacturing and operations departments that are already running lean, cleaning up these mistakes is a hassle that wastes time and money. Depending on the size of the original mistake, the amount of money lost could be large enough to impact the company’s bottom line.

Configurable Bill of Materials

It is possible to have a bill of material for a finished product that can be configured to a specific requirement for a customer. The configurable bill of material contains all the components that are required to manufacture the material to a customer’s specific requirements.

A configurable bill of materials (CBOM) is a form of BOM used by industries that have multiple options and highly configurable products (e.g. telecom systems, data-center hardware (SANS, servers, etc.), PCs, autos).

The CBOM is used to dynamically create “end-items” that a company sells. The benefit of using CBOM structure is that it reduces the work-effort needed to maintain product structures. The configurable BOM is most frequently driven by “configurator” software, however it can be enabled manually (manual maintenance is infrequent because it is unwieldy to manage the number of permutations and combinations of possible configurations). The development of the CBOM is dependent on having a modular BOM structure in place. The modular BOM structure provides the assemblies/sub-systems that can be selected to “configure” an end-item.

While most configurators utilize top-down hierarchical rules syntax to find appropriate modular BOMs, maintenance of very similar BOMs (i.e., only one component is different for various voltages) becomes highly excessive. A newer approach, (Bottom-Up/Rules-Based Structuring) utilizing a proprietary search engine scheme transversing through selectable componentry at high speeds eliminates the Planning Modular BOM duplications. The search engine is also used for all combinatorial feature constraints and GUI representations to support specification selections.

To decide which variant of the parts or components are to be chosen, they are attributed by the product options which are the characteristic features of the product (business). If the options of the product build an ideal boolean algebra, it is possible to describe the connection between parts and product variants with a Boolean expression, which refers to a subset of the set of products.

Modular BOM

BOMs are of hierarchical nature, with the top level representing the finished product which may be a sub-assembly or a completed item. BOMs that describe the sub-assemblies are referred to as modular BOMs. An example of this is the NAAMS BOM that is used in the automotive industry to list all the components in an assembly line. The structure of the NAAMS BOM is System, Line, Tool, Unit and Detail.

The first hierarchical databases were developed for automating bills of materials for manufacturing organizations in the early 1960s. At present, this BOM is used as a data base to identify the many parts and their codes in automobile manufacturing companies.

A bill of materials “implosion” links component pieces to a major assembly, while a bill of materials “explosion” breaks apart each assembly or sub-assembly into its component parts.

A modular BOM can be displayed in the following formats:

• A single-level BOM that displays the assembly or sub-assembly with only one level of children. Thus it displays the components directly needed to make the assembly or sub-assembly.
• An indented BOM that displays the highest-level item closest to the left margin and the components used in that item indented more to the right.
• Modular (planning) BOM

A BOM can also be visually represented by a product structure tree, although they are rarely used in the workplace. For example, one of them is Time-Phased Product Structure where this diagram illustrates the time needed to build or acquire the needed components to assemble the final product. For each product, the time phased product structure shows the sequence and duration of each operation.