The Bill of Materials (BOM) Beginners Guide!

Bill of Materials

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Manufacturing contributed 10.8% to the total US GDP in 2020. Manufacturing businesses are at the heart of eCommerce and retail businesses. If you’re an eCommerce seller or manufacturer, you need to know BOMs (bill of materials).

How do you create a bill of materials? Why are they useful for both eCommerce sellers and manufacturers alike?

Keep reading to learn what a bill of materials is, what it includes, and the advantages your manufacturing business gains from using a BOM to define the manufacturing process from start to finish.

What Is A Bill Of Materials? 

A bill of materials lists the materials and processes required to create a product. A BOM can be helpful to those in a business’s eCommerce, manufacturing, engineering, purchasing, and materials management departments. Once created, you can produce and market your products.

  • The parts required to manufacture the product.
  • The items needed to manufacture the product.
  • The assemblies of the product.
  • The subassemblies of the product.
  • Documents.
  • Drawings.
  • Other materials.

The bill of materials is a blueprint that presents the information needed to manufacture the product from start to finish. It is structured in a hierarchical format based on the chronological order of each stage in the manufacturing process. 

Before manufacturers start manufacturing the product, they will generate a bill of materials to clarify each task that must be performed from start to finish when creating the product. Many different departments will collaborate on this, and often there are two different kinds of BOMs:

  • An engineering bill of materials (EBOM).
  • A manufacturing bill of materials (MBOM).

The BOM should be kept up-to-date when it is shared with contractors, supply chain partners, and materials suppliers. By keeping the bill up-to-date or using bill of materials software, you will keep your manufacturing process cohesive and accurate. Then, you can guide your product through design, development, and volume production.

With your bill of materials, you can reduce the likelihood of delays on product launches and maintain an awareness of all facets of your manufacturing process. 

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What Should Be Included In A Bill Of Materials?

In this section, we will be discussing how to create a bill of materials based on the information you will need to gather before compiling it. If you’re making a bill of materials for a new product, you’ll need:

  • Assigned BOM levels – for each process and part of your bill of materials, you will need to assign a level. The BOM level indicates the order in which each procedure must be performed from start to finish.
  • Part numbers – to identify parts in your manufacturing process quickly and easily, you will need to assign part numbers. Each element should have its manufacturing part number, and you should avoid using the same number for different parts or versions of the same part.
  • Part names – in addition to creating part numbers, you need to develop names for each part for quicker identification.
  • Phase – you will need to clearly define which stage each part is in throughout the production process. You could use terms like ‘in production’, ‘unreleased’, or ‘in design’, which will indicate whether new parts have been approved. It will also mark the product’s progress, which will help create accurate timelines for when your production team will complete each part.
  • Description – since many parts can be difficult to distinguish from others, you will need to describe each part, allowing you to differentiate between similar parts and identify them quickly to avoid confusion.
  • Quantity – to complete the finished product, you may need several of the same parts, so your bill of materials should denote the quantities of each part required to create the finished product.
  • Measures – you will need to clearly state the measures of each material or part that you need to purchase or use for production. This figure could be in feet, inches, ounces, and drops. 
  • Procurement method – you will need to detail how you procure each part in the production process. This could be either purchasing the product or making the product. Providing the procurement method will allow you to plan your requirements and workflows for the production process more efficiently.
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How Is A Bill Of Materials Laid Out?

When displaying the information in your bill of materials, you will need to know how to structure your BOM. Most manufacturers use an explosion display.

BOM explosion displays will show your finished product at the uppermost level, while the display will break down your parts and materials to the bottom level of the structure. The chronological order of assembly will move upwards towards your finished product at the top.

Advantages Of Creating A BOM

A warehouse has many responsibilities, including warehouse security, incoming orders, and shipping. A bill of materials helps summarize the warehouse’s responsibilities and simplify processes, allowing employees to manage their time more effectively.

To understand why you need a BOM, it is essential to identify the advantages you stand to gain from creating it:

  • Simplification – a BOM simplifies the production process and provides a structured, almost instructional, guideline for your production team to follow.
  • Reduces learning requirements – since your production teams will only need to know about the production phase they oversee, a BOM makes it possible for them to perform their function without gaining an in-depth perspective of the overall production process.
  • Visualization – without a bill, it may be difficult for your production teams to visualize how each stage of the production process contributes to the finished product.

Summary

If you’re starting manufacturing, eCommerce, or supplier business, you need to know about the BOM. Hopefully, this guide has given insight into how a bill of materials clarifies the production process and the benefits your production teams can gain from an overview of the production process.

Consider using a bill of materials to gain more insight into your production process.

Article and permission to publish here provided by Mike Pedersen. Originally written for Supply Chain Game Changer and published on June 20, 2022.

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