Bill of Materials (BOM): The Daily Definition

 In The Daily Definition

What is a bill of materials (BOM)?

Bill of Materials BOM

A bill of materials, or BOM, is a list of the raw materials, assemblies, components, and parts needed to manufacture an end product, as well as the quantities of each. Detailed and accurate BOMs keep the manufacturing process running smoothly. Companies frequently organize these lists in a hierarchical way, starting with the finished product and moving down to individual components and materials.

An example:

BOMs vary from simple to extremely complicated. To keep this example simple, though, think of a BOM like you would a shopping list and recipe for creating a dish. If you’re going to make a fruit salad, your bill of materials might include:

  • Strawberries
  • Blueberries
  • Bananas
  • Oranges
  • Apples
  • Pineapple

Although these ingredients are vital for making the final product, they aren’t much good without clear instructions on what to do with them. The other critical piece of our BOM is the recipe. The recipe (instructions) combined with the fruit (components) make up the final product (the salad). All manufacturers building products, regardless of their industry, start with a bill of materials.

Our two cents:

Manufacturers that build products start the assembling process by creating a BOM. Use a bill of materials to centralize the information needed to manufacture a product. Creating an accurate bill of materials is vital because the correct parts must be available when the item is manufactured.

Inaccurate inventory and component counts can cause delays in the manufacturing process. A detailed BOM helps keep everything in order, but it won’t solve any preexisting inventory management struggles you’re facing. Unfortunately, gaps in inventory lead to production delays, which increase operating costs due to waste.

Additionally, while you’re spending time locating missing parts or placing an order to replenish stock, your customers are waiting on their orders. Failure to make appropriate plans can lead to lost sales, and worse, lost customers. To stay on top of your inventory, consider setting up a target stock level and pay close attention to your safety stock.

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