Why is a Manufacturing Bill of Materials (BOM) so important?

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A bill of materials (BOM) is a critical tool in the manufacturing world. In essence it allows manufacturers to stipulate in detail how their products are getting made. Included is information like all the components that go into making the final product, everything from the physical attributes of the item through to it’s packaging, as well as item quantities, processes needed to be performed during manufacture and how and where parts are sourced.

Due to its level of detail a manufacturing bill of materials is not something that can be brushed aside or forgotten about. You do so at your business’ detriment. But let’s get a better understanding of why.

A BOM is the guiding light

We call the bill of materials the guiding light because it literally paves the way to understanding how a product is manufactured and processed through to shipping. Everything you need to know is basically on it meaning you can get an in depth understanding of the production line and what will be needed to make it tick along as efficiently as possible.

Through the bill of materials you will be able to successful oversee and manage all your resources. It will help guide any decision making around whether everything is produced in-house or whether some things are better being outsourced. The BOM will then help guide timings like what is done at the time and what is needed before the rest of production can commence.

It helps to ensure timeliness and eliminates errors

Without a bill of materials, it would be a little bit like shooting in the dark. You wouldn’t know how much inventory you need, you wouldn’t know the processes involved and as a result the time it takes to manufacture. You also wouldn’t know how many end products you could produce as a result. By knowing how everything is functioning at every step along the way you are able to better ensure that each step happens on time when it needs to. For example, if you didn’t know how much of each item you needed, how can you ensure you have the right quantities on hand? Then, if you don’t have what you need the whole manufacturing process is held up costing the business time and money.

It decreases wastage

Another reason why a BOM is so important in manufacturing is its ability to help decrease waste. By knowing exactly what is needed and all accompanying details you aren’t left bringing in the wrong parts, you aren’t left with excess inventory because you didn’t know how many would be needed and you aren’t left with products that may be deemed unusable as they were assembled incorrectly. With excess inventory alone you are tying up capital that could be put to better use, and with unusable products you are essentially throwing away your cash. You can see why it pays to be smarter about things.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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