Understand Bill of Materials and How to Make It

Bill of Materials or often abbreviated as BOM is the description or definition of the last product consisting of items, materials or materials needed to assemble, mix or produce the final product.

Bill of Materials consists of several forms and can be used for various purposes. Bill of Materials was created as part of the design process and is used by manufacturing engineers to determine items that must be purchased or produced. Production and inventory control planning uses BOM which is linked to the master production schedule , to determine when the exact time an item is bought or produced.

So, What Is a Bill of Material ? Here are some definitions

  • Bill of materialsis a list of the number of components, a mixture of several materials and raw materials needed to produce a finished product. BOM not only qualifies a product but is also useful for charging costs and can be used as a list of materials that must be issued to production or assembly employees.
  • The Bill of Materialsis a hierarchical list of materials (components, subassemblies  and ingredients) needed to make a product, showing the number of each item Other information may also be included in the BOM for planning and costing.
  • Bill of materialis a document used by a manufacturing company or other business to request material from inventory that aims to meet the needs of consumers. BOM shows the specifications of each item that shows the quality of a company’s products to its customers. Producers of industrial goods and raw materials can get to know the buying habits of their customers from the information in BOM. BOM is also used for accountants for the purpose of calculating the price of products made.

A good and accurate bill of materials must show information about each input such as component description, part number, unit of measure and component description and lead time for work or ordering. All items and BOMs must be uniquely identified and numbered.

Also read:  Definition, Types and Benefits of Bill of Materials in Manufacturing Companies

Usability of Bill of Material

BOM is made with the aim and function that can be used in accordance with needs. Here are some BOM functions and their explanations:

·         Basic Calculation of Selling Prices

BOM is used as a basis for calculating product sales prices. With BOM we can know the potential profit or loss obtained by the company based on the product selling price. The product selling price is obtained by adding up the cost of raw materials and other costs.

·         Basic Planning for Raw Material Requirements

BOM functions as a basis for planning the need for raw materials. The goal is to be able to know the amount of a raw material needed for production. For example it takes how many bricks to make a building and so on.

·         Avoiding Lack of Raw Materials

BOM is also used to avoid possible shortages and even run out of raw materials. For example, when a factory produces many goods, then many goods fail to produce. So that the stock of goods becomes too much. With BOM, companies can have a reminder note so as not to run out or excess stock of an item.

·         As a Reference for Product Repair

This is because the BOM contains material and component records of a production. For example there is damage or lack of components of a product, the company can see the record of the components needed in the company’s BOM.

·         Unifying Functions in the Company

The function of BOM is to unite functions within the company. The company’s BOM will facilitate relations and coordination between various divisions. Especially regarding matters related to production.

BOM presents a list of components in the form of product structure and is expressed at the manufacturing level. In addition to being known systematically as a BOM product structure it is also known as a product tree. Each BOM component has a level based on the following components:

Level 0

A finished product that is not used as a component of other products.

Level 1

A direct forming component of a product with Level 0. At the same time, this component is also a finished product. As an illustration, car tires can also be sold separately as finished products that are ready to use.

Level 2

A direct forming component of a product with Level 1. As with level 1, components at level 2 can also be used as direct forming components at level 0 or as a finished product.

Level 3

A direct forming component of a product with Level 2. As with level 2, components at level 3 can also be used as direct forming components at level 0 or as a finished product.

BOM in the form of product structure is easier to understand. But if the number and level of components are very large then drawing with a product structure becomes inefficient. Therefore, BOM is also described in tabular form.

BOM Structure

1. Standard Structure ( T Structure / Pyramid Structure )

There are more subassemblies compared to final products and more components than subassemblies. Only a small number of final products are made from their constituent components. This final product is stored in stock for shipment.

Product Structure:

The highlight is the final product

The middle part is assemblies

The bottom is components and raw materials

2. Modular Structure ( Bourglas Structure )

There are fewer subassemblies than the final product and more components than subassemblies. In a modular structure many end products made from the same subassemblies are then stored for assembly to fulfill customer orders.

Product Structure:

The highlight is the final product

The middle part is assemblies

The bottom is components and raw materials

Also read:  Get to know the Manufacturing Cycles of Manufacturing Companies

How to make a bill of material

Some indicators that must be known when making Bill of Material are as follows:

  • Determine the type of bill of materialin accordance with the product to be made.
  • Valid data that will be used as a reference in the formation of bills of material.
  • Understand and master the system or application used to create bills of material(example applications: SAAP, IFS, Web-based applications, etc.).
  • Specify numbering instead of an item code or picture, usually every company has a special format in the item code numbering.
  • Master the component / item level structure before it is formed.
  • Master the process contained in a component. (example: welding processpainting process , machining process , etc.)
  • Determine and identify the items/ items according to their functions (example: goods bought or not purchased, goods need to be processed or not processed, etc.).
  • Validation after it is formed by checking.
  • Periodic checking to ensure the bill of material is

In making a bill of material or BOM, keep in mind that before making a BOM you must first understand what will be made, the list of goods orders must match what is needed. Making bills of material can be made by making new ones or modifying existing bills of material . Each company has a different system from one another, it is caused by different needs according to the category of each company.

Leave a Comment