The bill of materials (BOM) is a crucial data set in a manufacturing firm. It comprises all the elements necessary for creating a product, like raw materials, standard components, assemblies, and sub-assemblies. This data is vital as it helps the enterprise organize material needs and supply chains. It also helps it plan and tracks the production process. If you are running a company, optimize the bill of materials by following the best practices. They will also help in BOM cost reduction. Check them out below.
- Create Categories
Begin by creating categories of products you will use in a bill of materials. Each one should have a category, as you can then organize the BOM-based tasks. They can vary but stick with a classification. It will then help you to analyze and easily communicate with other suppliers/contractors and engineers. The ultimate result of this practice is to develop a chart with a cost breakdown based on the categories.
- Cost Analysis
Every manufacturing firm is interested in cost. Thus, there must be a cost-effective way to make a BOM analysis. It is crucial, and you can do it easily by sorting the bills of materials based on cost. Focus on the top 20%, as whatever comes from them generally impacts 80% of your product success. Thus, emphasize optimizing this percentage of the most expensive components cost.
- Share BOM Early
A critical part of creating a better bill of materials is to stay on the same page. The most important thing is the early involvement of all the central stakeholders. Begin with it as quickly as you can during the design phase. It will then guarantee that all the vital components of the design will be assessed by the production, supply chain, and various other divisions. Additionally, it will help you identify BOM cost reduction steps, and procurement kinds, and engage several people and departments in the process.
- BOM Quality
Ensure the completeness of the bill of materials by including the right information. Designers are generally not interested in the data essential for quotation and procurement. Thus, incorporating critical information like manufacturer part number will significantly improve the BOM data.
Apart from these, you must also sort and filter the data as it is equally important. While creating it, utilize the breakdown of materials as a foundation. You can also implement user-defined BOM views and share them later with the right people in your company. It is the ideal way to bring a strong foundation. It can also help you identify BOM cost reduction ways.
Do not miss out on including packaging elements in a bill of materials. Forgetting about it can result in a substantial miss in cost analyzes. It can affect you later. However, at the same time, remember that modern packaging can be expensive. It may impact the way you present your finished product to the customers.
These tips will help you better optimize the bill of materials and discover BOM cost reduction ways. Remember them, and get in touch with experts to ensure the best results.