BOM 101: How to optimize Bill of Materials

Last week, I started the conversation about Bill of Materials and modern challenges. BOM is a heavy topic. Previous blog made me think about few additional things related to BOM management and I decided to share it with you too. One of the concepts I see as important in modern PLM and other enterprise systems is to maintain the idea and implementation of single BOM. For many years, I’ve seen multiple-BOM concept as one of the fundamental ideas to implement BOM management in many enterprise systems – PDM, PLM, MRP, ERP, etc. However, I believe, we need to start revising BOM management systems towards usage of one consistent BOM.

Function oriented BOM

The simple definition of BOM is not functional. The wikipedia article about BOM defines it a list of raw materials, parts, components and sub-assemblies required to build a product. In my view, you can see many BOMs in organizations reflecting "product structure" as a main driving behind how BOM organized. As a result of this, many companies are experiencing difficulties with operations and processes that involve these BOMs. Opposite to that, you should think about BOM from a functional standpoint. Form of BOM follows functions. The final form of the BOM or structure of the BOM is a reflection of what we want the BOM to do.

Wide Company Usage

Very often BOM starts in a single department. The compartmental organization logic made BOM separation very natural. When it is done, you feel pain relief, since you think it removes cross department conflicts about BOM structure. However, it is not true. It hits you back immediately when you start planning your cross functional processes. BOM needs to be structured to support the way product will be manufactured. Also important to include business view by structuring BOM around end items that imply some business view on a product you are creating.

Part numbers and Documentation

Don’t mess with these two main groups of identification parameters. Don’t try to combine them. Build BOM around part numbers and think about how to simplify the relationships between Parts and Drawings. The complexity of these relationships will make your future change process messy and complicated. Traditionally, BOM ends up in the drawing sheet. It was in the past. With massive adoption of 3D CAD systems and computer automation, you can re-think it. Managing part numbers is a separate topic that I will address in another post.

Modules and Flattening

Use grouping techniques to create part of BOM that can be easy handled and replaced. Use logically combined parts that belongs to specific configurations. It will help you to simplify your ordering system. Modern tools allows you to deal with hierarchies much easier. However, think twice before you introduce an additional level in BOM hierarchy. Flat BOM is much easy to handle. It is very important to create a BOM structure that allows you to run change processes as easy as possible. Analyze your change processes upfront.

What is my conclusion? The simplicity is an ultimate sophistication. It is very easy to create a complex, hierarchical BOM structure trailing all 3D CAD structures as well as engineering structures. However, to make a simple BOM that can be used by all department is not a simple task. Think bottom up – first about function of your BOM in terms of what you are manufacturing, second about change processes and only after about BOM structure (form). Just my thoughts…

Best, Oleg

Image courtesy of [just2shutter] /

4 Responses to BOM 101: How to optimize Bill of Materials

  1. Dijon says:

    Would unlikely happen in my large enterprise, not even in this era of supposed collaboration. Organizations are still too compartmentalized and focused on their own deliverables to even attempt to embrace the singularity of a massive homogenized structure (which around here would become unwieldy rather quickly). Those organizations rarely understand the needs of internal counterparts and I’m not certain that they need to in depth.

    Marketing produces structures which are portfolio centric, Engineering produces structures which are product centric, Manufacturing produces a structures which are process centric, Purchasing produces structures which are inventory centric, Aftermarket produces structures which are service centric and so on.

    Beyond restructuring, everybody has their own unique puts and takes to get the structural representation that they need. Rarely are those groups are in tune to the structural idiosyncrasies of all the other groups (maybe one or two that they habitually interact with). What one organization lives and breathes is often imaginary to another. Examples: Engineering cares not about Manufacturing component fabrication history or kitting, Manufacturing doesn’t put much thought into the composition of procured stock, Purchasing can be oblivious to service parts, etc.

    Maybe this would work in the SMB channel where employees tend to know one another and environment complexity isn’t the elephant in the room.

    Our incumbent PLM system kind of encourages the coexistence of multiple organization based structures. That diminishes the “hands off my stuff” factor. There are built-in utilities for comparing one structure variation to another in order to identify any undesirable deltas.

  2. Rick says:

    Oleg, thanks for the 101. I am learning more about this everyday. I also came across anther article at that helps me with an outline. What are your thoughts on this as an outline for creating my BOM? I will be building wind tunnels.

  3. Rick, thanks for the comment! Arena provides good articles. I recommend you my blog from yesterday to understand a bigger picture – BOM 101: The Four Pillars of Every BOM solution – Best, Oleg

  4. @Dijon. thanks for sharing your experience and POV. Even if “compartmentalization” is a mainstream approach in enterprise software today, lots of processes can be improved if we stop to copy/paste structures between silos. The technology to make it happen is available. However, “people’s factor” is dominate… It is about people (first) and about technologies (second). Just my opinion. Best, Oleg

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

Join 287 other followers

%d bloggers like this: