Power your Industry 4.0 Initiatives with Up-to-date Bill of Materials

Power your Industry 4.0 Initiatives with Up-to-date Bill of Materials

Irrespective of the expanse of the manufacturing process, the Bill of Materials (BOM) plays a vital role in production. All companies – large or small – use the BOM as a guide and list of their final purchases. BOM is involved in every step of the business, including manufacturing, scheduling, purchasing, maintenance, and various other aspects of the organization. 

Bill of Materials (BOM) – What is it?

A Bill of Materials (BOM) is a centralized source of information containing an exhaustive list of raw materials, manufacturing components, and instructions needed to construct, produce, or repair any service or product.

Often presented in a hierarchical way, it has the finished product on the top and the individual components and raw materials required, at the bottom. Depending on the type of engineering and manufacturing, there are various kinds of bills of materials.

Types of BOMs

  • Engineering Bill of Materials: The engineering bill of materials is the ground zero for any finished product and lists down all the components, parts, and materials required to create the finished product.
  • Manufacturing Bill of Materials: The most common form, a manufacturing bill of materials includes all the components required to produce a deliverable product – such as the materials, formulas, and assemblies. It involves the processes performed during production.
  • Configurable Bill of Materials: Also known as a BOM with parameters or a Matrix BOM, the configurable bill of materials is created to act as a guide to producing a finished product. It has the same core product and bulk of manufacturing as all the produced goods, but the final version can slightly differ depending on the customer.

Benefits of an Effective Bill of Materials

  • Purchase: A detailed bill of materials helps in purchasing the correct products in adequate amounts as they include the entire process steps.
  • Costing: With a comprehensive bill of materials, organizations can have the accurate costing of carrying out every step of the process. This data can help them estimate their profit margins and manage the taxation levels while keeping the correct price of the product.
  • Process improvement: When stakeholders glance through the bill of materials and see the entire process of production, they can create a better plan workflow or develop work centers to carry out the production seamlessly.
  • Inventory management: A good BOM is vital for companies to manage their inventory. They can manage the shortages or cut the excess, beforehand.

What to Include in a BOM?

To create an effective BOM, it is important to mention specific information. All common BOMs should include:

  • BOM level
  • Part number
  • Part name
  • Description
  • Procurement type
  • Quantity
  • Unit of measurement
  • Reference designators
  • Phases of product life cycle
  • BOM notes

Tips for Creating an Impactful BOM

Having an effective BOM can significantly improve business accuracy and efficiency. It can streamline the entire production process by offering a roadmap to the finished products, leaving spare management time for product enhancement.

To create an impactful BOM, one must keep the following in mind:

  • Keep the users of the BOM in mind: By knowing who is going to refer to the BOM, one can define the depth of information that they require to carry out the production.
  • Plan for every small thing: It is easy to miss out on the small details while engineering or manufacturing. Mentioning elements like glue or tape can seem like a headache in the beginning, but the importance of a complete BOM is soon realized.
  • Formalize access to the BOM: Most organizations keep their BOM with a “Read Only” access. But it is also important to allow the people of respective departments to make changes in their BOM. Having limited access instead of no access at all will also help minimize errors.
  • Keep all the data on the front end: It is important to create a BOM at the beginning of a product’s lifecycle. Whether it is an existing BOM or CAD drawings, inserting all the data upfront can prove beneficial in maintaining the accuracy of the BOM.
  • Create a formal audit process: Since the BOM is a dynamic account, organizations should make an allocation for the changes happening to a product within its lifecycle. Look for errors like cost changes, changes in the measurement unit, new steps to be added, drawing, and iteration changes. Keep a schedule to monitor these mistakes and formally audit the BOM whenever required.

BOM And Industry 4.0

With the proliferation of new technologies, connected devices, automation, and real-time data analysis, factories are becoming smart factories. The fourth industrial revolution, aka Industry 4.0, is already here and manufacturing companies of all sizes are already leveraging its power to innovate better, achieve faster time to market, improve productivity, increase safety, reduce costs, and increase revenues.

Availability of accurate, comprehensive, up-to-date, and real-time data is essential for the success of Industry 4.0 initiatives. As manufacturing processes become increasingly digital and automated, they need a “single source of truth” about various products and their parts. Only then, it is possible for the connected systems to work in sync, maintain data harmony, and deliver actionable insights.

BOMs have become the enterprise information backbone.

Wrapping Up

BOMs not only increase the flexibility of manufacturing but also reduce the planning and execution lead time with structural accuracy and a significant reduction in probable errors.

The core value of industry 4.0 solutions includes extracting data from various operations and using it to drive better decision-making across the business operation, from maintenance to production. Starting with the basics of maintaining up-to-date BOMs can actually help build the foundation of a smarter and connected enterprise.

Need help with the Bill of Materials? Connect with our data experts.