What is Bill of Materials (BoM)?
Bill of material abbreviated as
BoM can be defined as ‘collective list of all the material required for the
building final product, which includes semi-finished, finished parts along with
their quantity, unit of measure.’
Why it is used?
1. Product define & costing –
On Production lines, it is not always
possible to build the final product by referring the drawings. Due to
variations in individual’s ability to interpret drawings & difficulty in finding
parts position in final product drawing print can create delays in production of final
products. So, to tackle this, final product is divided into sub-assemblies
& all the part required to build the particular sub-assemblies are grouped together
for ease of assembly process. This also makes product costing process easy
& quick.
2. Material Requirement Planning (MRP)
MRP is a technique integrated in ERP software
which enable material planners to generate the material requirement of rough, semi-finish,
finish parts are needed for the final products with actual material required date, their
lead time, responsible buyer & supplier details.
BOM Structure -
BoM structure is a breakdown of final product from
higher level sub-assembly to low level component. Each sub-branch of final
product labelled as ‘Level’ starting from 0 (Zero) assigned to final product
& so on. These levels can be extended until single part found on product structure.
BoM Types –
1. Technical Types
When same final products are built with different BoM parts known as ‘Multiple/Alternative
BoM’ of that product. For example- Redmi Note 7s phone comes with 3 colour
options, specifications of 3 options are same except colour. So, BoM of Redmi
Note 7 has 3 alternative BoMs & as per the demand production select the alternative
BoM in system
·
Variant BoM –
When different final products are
built with common BoM parts are known as ‘Variant BoM.’ For example- It might
possible that company may produce another mobile model using existing Note 7s BOM
parts.
2. Usage Types – According
to BoM usage requirement different departments maintains respective BoMs in
system.
·
Engineering BoM
·
Manufacturing BoM
·
Sales BoM
·
Costing BoM
