The Bill of Materials (BOM) is a precise list of all items needed to make a product. Depending on the nature of the business and its partners, the list may include as many levels of detail as might be needed to produce, package, and support a specific product part as delivered to a customer. Every business that makes products for customers needs a clear and specific list of every part and option included with their products. Without it, they can’t reliably support their customers and scale their businesses.
In a scale manufacturing company, BOM detail is often managed by Document Control organizations and must include the information that
The BOM clarifies what’s included in a given product with specific detail. That specificity stretches across all operational departments, so planning and forecasting can move forward in anticipation of the product release.
In technology, simple terms are often used to describe complex products. It helps make customers feel more at ease. Simple terms like “cable” can also be deceptively ambiguous. Consider the cable that comes with new iPhones, commonly called a “charging cable.” There are now several kinds, sizes, and lengths. Delivering the wrong cable with an iPhone or some third-party accessory, would leave frustrated customers asking for refunds.
Removing ambiguity ensures that the product can be reliably reproduced and controlled for quality. Without it, businesses can’t be sure of
The role of BOMs is at the heart of product companies because they define what goes into a product. BOM Management is key to Quality Management Systems (QMS) and Product Lifecycle Management (PLM) because it defines the level of significance for changes. In John’s Organic Reuben, American singles can’t substitute for organic swiss cheese. An alternate supplier for organic swiss might be acceptable, for example, if it is qualified by a specific set of criteria or tests.
To be specific and unambiguous, BOMs must include all components and in precise quantities. The precision of the specification is key to quality. Without it, companies can’t commit to customer expectations or regulatory compliance. BOMs must include every detail relevant to the definition of a product.
Depending on a business category, this can include:
As BOMs start to come together, subtle distinctions can make a big difference. Most systems also include an area where BOM Notes can be shared with a team. These might include an explanation about open issues before formal changes are released, for example.
Depending on the nature of the product and organization, BOMs may also specify seemingly trivial details that are necessary to planning such as:
To address the needs of the entire organization, BOM structures include these basic elements:
Structures refer to the ways in which the components of a product are captured in the bill of materials. There are generally two approaches, single-level BOMs, which collapses all items into a single level, and multi-level BOMs, which nest items into two or more levels. Decisions about structuring individual products and product families can have significant implications for not only a company but also its supply chain and distribution partners.
Single-level BOMs are the easiest to conceptually understand because they are simply a list of items, much like a list of items in a recipe. To make cookies, you need flour, sugar, butter, and so on. In selling products, the list of items can get much more complicated because components can be made of other components, and typically it needs to accommodate multiples, packaging, and so on. Representing complex products in single-level or “flat” BOMs can make them difficult to understand internally and unwieldy to manage through a supply chain.
Multi-level BOMs collapse related items together into logical subgroups such as purchased parts, kits, or sub-assemblies. This approach provides a means to reflect how parts are sourced from suppliers or distributed into channels.
Hierarchical structures can also address the needs of internal organizations, for example,
When the same product is sold in a variety of configurations or into a variety of channels, BOM structures can directly affect assembly efficiencies or sourcing costs. By breaking components down into purchased parts and sub-assemblies, companies with complex products can better share visibility into product details for customers, sales teams, internal managers, and suppliers. That visibility can be used to forecast demand, manage inventories, and cut procurement costs.
The structure of products can also be defined by an organization’s defined New Product Introduction (NPI) process. The Phase field, usually modified through managed Engineering Change Orders (ECOs), allows lower-level assemblies to be released to production independent of high-level assemblies. This can be used to release long lead-time parts to production as early as possible. The same applies for off-the-shelf components. A standard IEC power cord might be in the Production phase, even as the top-level part for the computer chassis is still in the Design phase.
Configurable BOMs (or CBOMs) allow the structure to be modified as the product is sold, often with “configurator” tools where the end customer is selecting software protocols or styling options on the final deliverable.
Typically, these kinds of configurators produce a customer-visible list of line items with separate pricing for each. From an internal perspective, the key is to ensure that each line reflects one and only one item that can be tracked with version and cost information. Depending on how sales and accounting functions track profitability or commissions, line items can be offered for free or combined with others at bundled pricing when delivered to customers.
This approach is helpful for a range of products with options. Consider:
Most companies structure their product and service BOMs to address their unique internal and external objectives. For a given product and configuration, some companies use separate systems to structure BOMs for Engineering and Manufacturing purposes. These Engineering Bills of Materials (EBOMs) and Manufacturing BIlls of Materials (MBOMs) can be independent of company-wide managed BOMs or be designed to integrate into them.
Most technical products begin with an EBOM built with the software product designers and engineers need to specify Printed Circuit Board Assemblies (PCBAs) layer traces, reference designators for chipsets, and the like. Computer-Aided Design (CAD) and Electronic Design Automation (EDA) software tools give a team of engineers the functions they need to collaborate on these kinds of specifications.
EBOMs for enclosures and packaging might be delivered as CAD files including multi-part assembly instructions. Because EBOMs are typically developed very early in the design phases, structures may be changed before final production.
By contrast, MBOMs are designed for the needs of manufacturing and operations teams where sub-assembly configurations can be optimized to save money and manage around production lines.
Unlike EBOMs, MBOMs should reflect all components as assembled and delivered to an end customer. This includes enclosures, packing material, and labeling. For companies with multi-tier distribution, this can also include multi-pack and pallet instructions. MBOMs also will frequently include managed locations (bins, for example) and other details specific to warehouses and distribution centers.
Manufacturers often plan one or more First Article Reviews in which the manufactured part is disassembled by the product team before a final release. First Article Reviews are typically integrated into formal or informal new product processes with ECO systems to ensure that changes can be tracked to validate resolution. Feedback from these systems in manufacturing can also inform ongoing Quality Control (QC) and Quality Assurance (QA) procedures.
With BOMs playing such a critical role across an organization, the thoughtful selection of BOM Management tools can create a significant point of leverage for a product company. Next generation Product Lifecycle Management (PLM) systems use modern, cloud-based architectures to ensure that information can be available and updated continuously throughout a global organization and integrated into communications with partners and contract manufacturers.
Modern BOM management systems should anticipate the key requirements of product companies, including:
Systems should anticipate global teams collaborating on products through all phases from design and new product release to updates and end-of-life. Propel’s unique approach combines BOM Management with Product Lifecycle Management (PLM) and Quality Management Systems (QMS) in a modern, cloud-based system that meets these needs. The result is —