Manufacturing

Bill of Materials

What Is?

​A Bill of Material (BOM) is a listing of all the sub-assemblies, intermediate parts, and raw materials that go into a parent assembly showing the quantity of each (including scrap) required to make a parent assembly. It is used in conjunction with Requirements Planning to determine the items for which purchase requisitions and production orders must be released. A bill of material may also be called the ‘formula’ or ‘recipe’.

A routing is a set of information detailing the method of manufacture of a particular item. It includes the operations to be performed, their sequence, the various work centers to be involved, and the standards for set-up and run time. The routing can also include information on tooling, operator skill levels, operation instructions, testing requirements, etc. Synonyms for routings are bill of operations, instruction sheet, manufacturing data sheet, operation chart, operation list, operation sheet, routing sheet.

The accuracy of your bills of material determines the efficiency and accuracy of your manufacturing costing, procurement, shop loading and ultimately, customer service.

​A BOM has a wide variety of uses for a manufacturing company. Some examples are:

Product definition

The bill of materials specifies the components and quantities used to make a product. This aids a company in tracking inventory movements and job issues, and in controlling engineering design files of product structures.

Manufacturing instructions

The product and how it is fabricated is described so there are no misunderstandings about the product make up and the shop floor operations required to produce it.

Engineering change control

The bills of materials have to be maintained accurately. This maintenance is sometimes needed to correct errors on the original document, but can also be a result of product performance improvements, cost reductions, or the incorporation of additional features. Implementation of these changes must consider the replacement of the old product, introduction of the new and could possibly include announcements to the market place. Engineering Change Control is not part of this workbook.

Costing

The bill of materials form the nucleus of a product costing program. Combining the cost of materials necessary to produce a product with the labor and work center conversion costs provides an accurate picture of the product’s total cost at each level in the bill.

Pricing

Bill of materials can be used to cost products sold to customers. This is especially true for products made from options. Sales Order Entry used with single level bill of materials helps cost the end product.

Pick or Kit lists

When manufacturing a product from many components a list of parts or materials to be withdrawn from stores prior to the manufacturing process is often needed. In SYSPRO one could use the Trial Kitting list to check inventory availability and secondly to pick the components prior to job issue.

Capacity Planning

Companies use Bill of Materials in conjunction with Requirements Planning to calculate the planned capacity loading for the shop floor. This is an important scheduling function for calculating when jobs need to be released for manufacture on the shop floor.

Lead Time Calculation

Manufacturing companies need to know how long it takes to purchase parts and build components for their different products so they can quote valid lead times to the customer.

Batch Percentage Bills

A batch bill of materials is one where, instead of adding the quantity per for components, you add a wet weight percentage of the parent, assuming a parent percentage of 100. This is achieved through calculations using the specific gravity of the components.

Types and Parts of a Bill of Material

There are different types of bill of materials which require additional setup options.

A planning bill: used for master scheduling or material requirements

A batch bill of material: replaces quantity with wet weight percentage

Kit part: used in the sales process

The bill of material is made up of parent items and component items. These items can perform different functions or parts within a bill, depending on what that item is required to do. Below is a list of the parts of a bill of material which are in addition to the standard components:

Phantom

Notional

Co-product

By-product

Relationships and Levels in the Bill of Material

One of the products that The Outdoors Company (a sample company that is available with the training material) manufacture is bicycles.

BOM1.png

The items which make up a bicycle include:

1x saddle;

1x bicycle frame (made up of steel tubes, lugs, paint and brackets)

1 x handle bar assembly (made up of a bicycle stem, handle bar frame, handle bar brake hood, brake assembly, grips and adhesive)

1 x front wheel

2 x peddles

1 x drive Train Assembly

1x rear wheel

There are three relationships between the items:

parent – component (bicycle – rear wheel)

parent – sub assembly (bicycle – bicycle frame)

sub assembly – component (bicycle frame – steel tubes)

The bicycle is the finished item. It is the parent to all sub assemblies and components

required to make it. The bicycle frame is also a parent. It is a parent to the steel tubes, lugs, paint and brackets. Both parents are made-in items.

The sub assemblies include the bicycle frame and handle bar assembly. They are referred to as sub assemblies as they require some of the components to be assembled before the finished item can be completed. For example, you cannot attach the wheels until the bicycle frame is complete.

The components are all the individual items that are used to make up the bicycle and sub assemblies. For example the saddle, lugs, rear wheel. These are bought-out items.

Let us look at part of the bill of material that represents this bicycle:

BOM2.png

As you can see the bill of material has 3 levels:

  • Level 0 is the finished item
  • Level 1 consists of bought-out component items and made-in, in sub-assemblies
  • Level 2 consists of the bought-out components which make up the sub assembly
  • Parents can exist at all levels except the lowest level (in this example, level 2)

Looking at the sub assembly bicycle frame in isolation, you can see that the parent-component relationship has 2 levels:

  • Level 0 is the parent
  • Level 1 are the components

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The Bill of Materials system enables you to construct quantity or percentage relationships between assemblies (final product) sub-assemblies (bulk batches) and components (raw materials) using up to 15 levels and you can assign each component (raw material) to a selected operation in the parent routing.

​You can model the routing (i.e. the relationship between work centers and the time taken by the various elements of capacity usage) of the product to accommodate varying size batches, milestone operations, progressive scrap and dynamic elapsed times. The routing can also include information on tooling, operator skill levels, operation instructions, testing requirements, etc.

​The complete bill forms the basis for material and capacity planning, shop floor control and costing. Full bill of material costing and what-if costing facilities are provided and you can implement product change control if you use Bill of Materials in conjunction with the Engineering Change Control system.

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Process Flow

The engineering department needs to constantly make sure that the current structure and routings of each product are still valid. They also need to ensure that the lead time for items have been entered correctly.

The costing of each item needs to be checked regularly especially if standard costing is in use. They also need to make sure ​that there are no stock codes held on the master file that do not belong to a valid structure.

The Bill of Materials Process Flow

BOM3.png

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Integration

Bill of Materials requires Inventory to be installed as it uses stock code details. It also integrates with the following solutions:

Inventory

The part category and whether a stock item is defined as being a batch bill, determines what information needs be added in the Structure and Routings program.

Work in Progress

During job creation for a parent item, the Bill of Materials structure and routing is used to generate expected costs, lead time, and component and operation allocations for the jobs.

Requirements Planning

The Requirements Planning Calculation uses Bill of Materials routing to determine quantities and dates for suggested jobs and purchase orders.

SYSPRO Factory Scheduling

SYSPRO Factory Scheduling imports work center, machine, tool set and structure and routing details in order to schedule jobs.

Quotations

The Cost/Lead Time Roll-up function permits processing of Bill of Materials routings to develop costing and pricing for quotes.

Sales Orders

Single level Bill of Materials for a kit type parent product can be used in Sales Order entry.

​Essential and recommended modules

Essential

Inventory

Recommended

Quotations

Sales Orders

Work in Progress

Requirements Planning

SYSPRO Factory Scheduling

Bill of Materials Integration to other SYSPRO solutions

BOM4.png

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Syspro. Syspro Indonesia. Syspro Implementor. ERP Indonesia. ERP Small Medium. ERP Implementor. Small Medium ERP. Small Medium ERP Software. Small Medium ERP Implementor. ERP Implementer. ERP Implementation. Syspro Implementer. Syspro Implementation. Small Medium ERP Implementer. Small Medium ERP Implementation. ERP Manufacturing Software. ERP Manufacturing Systems. ERP for Manufacturing. ERP for Manufacturing Industry. ERP Distribution Software. ERP Distribution Systems. ERP for Distribution. ERP in Distributon. ERP for Distribution Industry. ERP Financial Software. ERP Financial Systems. ERP for Financial. ERP in Financial. ERP for Financial Industry. ERP EPC Software. ERP EPC Systems. ERP for EPC Companies. ERP for EPC Industry. ERP Solution for EPC Companies. Budget Planning. E-Budgeting. Financial Consolidation Software. SAP Indonesia. SAP Implementor. SAP Implementer. SAP Implementation. SAP ERP.