A Roadmap for Production: Understanding the Manufacturing Bill of Materials
When you are travelling, a good set of directions is more or less essential to a successful journey. Without full and accurate directions it becomes easier to get lost or for the journey to take a long time. The manufacturing bill of materials provides a roadmap for production; it sets out the details of every part that is required to build a vendible end product. This article explains the main reasons why it is crucial to have an accurate and complete bill. But first, let’s look at what exactly a manufacturing bill of materials is.
What is a manufacturing bill of materials?
A good manufacturing bill of materials describes all of the parts and assemblies that are used at any level of the production of the shippable product. It is not limited to the core parts of a product (such as a processor or a screen in the case of electronics) but also includes other items, such as packaging materials, brochures, and manuals. Moreover, a manufacturing bill of materials does not merely describe the ultimate components of a product. Instead, it fully describes the intermediate parts and materials – if a material is used at any stage of the production process it will be included in the manufacturing bill of materials.
A solid manufacturing bill of materials provides vital planning intelligence
Because a manufacturing bill of materials is so comprehensive, it is an important source of information in optimising the efficiency and cost of production. The bill influences what happens on the production line and also impacts upon pre-production processes such as procurement.
Working out the most efficient and cost-effective production process involves trade-offs between time, quality control, and financial considerations. In manufacturing, it is much more difficult to respond to changing business circumstances in an informed way without an accurate and up to date manufacturing bill of materials. If managers and senior leadership cannot rely on a bill to describe the existing process and inputs, they will need to piece this information together from other sources, diverting time and other resources from other, more productive, tasks.
This business intelligence is particularly important during the process of bringing a new product to market. In contrast with an existing product, there are no existing settings for the trade-off between time, quality control and cost. A comprehensive manufacturing bill of materials will help a manufacturer make better production decisions and could be the key difference between the product failing or successfully reaching the market.
An inaccurate manufacturing bill of materials can halt or bloat operations
Procurement managers may (rightly) rely on the manufacturing bill of materials to order the right production materials in appropriate quantities. If your bill of materials is missing parts, either by total omission or by listing the wrong quantity, then your business may not have ordered sufficient materials to continue production and could fail to fulfil customer orders. On the other hand, failing to keep the manufacturing bill of materials up to date might see your business saddled with incorrect or excess materials. This can bloat manufacturing and can directly impact profitability, especially if an incorrect order has to be disposed of at a loss. Updating each product’s manufacturing bill of materials when processes or inputs change can prevent these time consuming and costly mistakes.