What’s Bill Of Materials?
A bill of materials or product structure (sometimes called a product tree) is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, parts and the quantities of each needed to manufacture an end product. A bill of materials typically represents only a part of the total manufacturing cost since it excludes many indirect costs such as overhead.
A bill of materials is often used in conjunction with a routing, which is a list of the processes required to transform the raw materials into the end product. Together, the bill of materials and routing are used to define both the materials requirements and manufacturing operations necessary to produce a product. This information is typically used in enterprise resource planning (ERP) and manufacturing execution systems (MES).
In its simplest form, a bill of materials is a list of the components that make up a product. For example, a bill of materials for a computer might list the motherboard, processor, memory, hard drive, and optical drive as component parts. A more complex bill of materials might also include information on the quantity of each component needed, as well as the source of the component (i.e., whether it is sourced from within the company or from an outside supplier).
A bill of materials can also be represented in a hierarchical structure, with sub-assemblies and components being nested beneath the top-level assemblies. This type of bill of materials is sometimes referred to as a product tree. For example, a computer motherboard might be considered a top-level assembly, with the processor, memory, and other components being sub-assemblies or components.
A bill of materials can also include information on the order in which the component parts are to be assembled. This type of bill of materials is sometimes referred to as a build of materials or an assembly bill of materials. For example, a build of materials for a computer might specify that the processor is to be installed in the motherboard before the memory is installed.
In addition to listing the component parts and their quantities, a bill of materials can also include other types of information, such as the unit of measure (e.g., each, dozen, gross), the part number, and the description. A bill of materials can also include information on the source of the component parts (i.e., whether they are sourced from within the company or from an outside supplier).
The term “bill of materials” is sometimes used interchangeably with the term “parts list.” However, a parts list typically includes only the component parts and their quantities, without any information on the order of assembly or the source of the component parts.
A bill of materials can be created manually or electronically. Manual creation of a bill of materials can be time-consuming and error-prone, particularly for complex products with a large number of component parts. As a result, many companies now use software programs to create and manage their bills of materials.
Software programs that help companies create and manage their bills of materials are sometimes referred to as product lifecycle management (PLM) systems or product data management (PDM) systems. In addition to creating and managing bills of materials, these types of software programs can also be used to create and manage routings, product structures, and other types of product information.
Many companies use a bill of materials as the basis for their inventory management system. Inventories of finished goods and raw materials can be tracked and managed based on the information in the bill of materials. For example, when a change is made to the bill of materials (e.g., a component part is added or deleted), the inventory management system can be updated accordingly.
In addition to inventory management, a bill of materials can also be used for other purposes, such as quality control and cost analysis. For example, a bill of materials can be used to track the component parts used in the manufacturing of a product. This information can then be used to identify which component suppliers are providing quality parts and which are not.
Similarly, a bill of materials can be used to analyze the cost of a product. The cost of each component part can be tracked, and the total cost of the product can be calculated based on the quantities of each component part used. This information can then be used to identify ways to reduce the cost of the product.
A bill of materials is a list of the component parts and their quantities that are used to create a product. A bill of materials can be created manually or electronically, and it can be used for inventory management, quality control, and cost analysis.