BOM stands for Bill Of Materials. It is a list of components and materials that are used to build a product. It includes raw materials, sub-assemblies, and everything till the finishing and packaging of products. It is important because it ensures that all the parts that are needed are available or not. There are two types of BOM: The top-down BOM and The up-down BOM. In top-down BOM, components needed are arranged according to their steps, whereas in up-down BOM, it starts from raw material till the last, i.e. finished products. Among these two, the top-down BOM is the most common.
Even though there are two types of BOM, every BOM should include the components given below:
Item name or component name.
Description of the item.
The quantity needed.
Unit of measurement.
They are useful for the sales team.
They are used by engineers working on a new project.
They are used in manufacturing and assembly operations.
Enlist all the materials needed for the product.
Determine the quantity of each component.
Assigning a unit for measuring the component.
4. Add extra information like supplier name, special instructions etc.
Some types of BOM are the manufacturing BOM that, is used by manufacturers, Engineering BOM which is used by engineers.
To ensure that everyone is working with accurate information.
If the BOM that is created is not accurate, it will affect the production, will increase the operation costs, and time will be wasted for making corrections.
BOM is also known as product structure, assembly component list or production recipe.
BOM will help to estimate the material cost, control the budget, maintain a record, and stay on schedule.