1. Poor master data management is often a hindrance to using an ERP system well. Bills of Material, BOMs, are a key piece of that ERP master data. Let’s look at a BOM to understand how it can be used and managed in your ERP system.
2. A BOM is organized by levels and includes all the parts that are used to build your product. Level 0 is the final product sold to your customer. Level 1 might be one or more subassemblies used in level 0. There is no limit to the levels but generally you want as few as possible to keep things simple.
3. Within a BOM level are a list of part numbers and the quantity needed to make up the next level.
4. Part descriptions, units of measure, procurement types, etc. are often thought of as parts of a BOM but they really are items in the part master file which is a different ERP master data item.
5. Those values will affect how the BOM works in your ERP and they are very important.
REVISION TO BOM
1. Many of today’s ERP systems allow the use of configurable BOMs. These will combine existing parts and subassemblies as a sales order is entered to the exact configuration your customer wants. The exact combination for this order might never be duplicated so there is no need for engineering controls to manage a one-time order configuration.
2. A BOM can also be used as part of your material planning system. You can create a planning BOM and master schedule that parent only to force the purchase of particular components through your forecast. Often a planning BOM will have percentage quantities per each component instead of units and the percentages will not necessarily add to 100%.
3. BOM is an important part of your quality and control systems. Managing BOM through your ERP system will improve inventory flow, material planning, and ultimately, strategic advantage for your business. So put the time in to learn how to manage it properly.
SEARCHING FOR ERP
1. When searching for ERP software, it is necessary to select a system that will best support your company’s processes.
2. One essential distinction to note is the contrast between discrete and process manufacturing and in turn, bill of materials (BOM) vs formulation/recipe – terms discussed, but often misunderstood in the decision-making process.
3. Clearing up misconceptions and understanding the differences in these terms is essential in choosing the right ERP system solution for your business.
DISCRETE VS PROCESS MANUFACTURING
1. Discrete manufacturing involves assembling products by using the same components for each job. These products have the ability to be deconstructed and the raw materials can be used to make a different product.
2. Examples of end products created by discrete manufacturers include bicycles, appliances, cars and computers.
3. Conversely, process manufacturing includes blended or mixed materials in which the final product cannot be taken apart into its original forms.
4. Process manufacturers’ finished goods include beverages, food items, vitamins, paint and chemicals.
5. Selecting an ERP software solution for your specific manufacturing type ensures that your company has the tools that it needs, designed specifically for your industry.
BOM VS FORMULATION/RECIPE
1. While bill of materials(BOM) and formulas/recipes may have similar purposes and are often confused, they are not interchangeable.
2. A discrete manufacturing BOM will bring together the quantities of various parts, components, assemblies, raw materials and sub-assemblies necessary to produce an end product. The bill of material is fixed and does not change.
3. Process manufacturers rely on a recipe or formula and the mixing of ingredients in order to create their finished goods.
4. It is necessary to take into consideration the size of the order in order to make adjustments to the recipe/formula before beginning the production process, as the scaling of recipes occurs frequently.
INDUSTRY-SPECIFIC ERP SOLUTION
1. Batch process manufacturers require an ERP solution with formulation management features that include recipe revision tracking, attribute changes, customizations, historical information (including revisions, changes and updates to the recipes), production notes and scalability.
2. Other unique needs for consideration for process manufacturers include the calculation of nutritional and allergen information, the ability to covert multiple units of measure, by-product and co-product management and recipe data security.
3/ Software designed for discrete manufacturers is unable to address these particular needs related to recipes and formulas.
Source:
https://www.erpfocus.com/how-to-manage-bom-in-your-erp-system-1632.html
https://www.processproerp.com/blog/bom-vs-formulation-what-to-consider-in-erp-software
https://www.mbtmag.com/home/blog/13245492/why-a-bom-belongs-in-plm-even-if-erp-has-one
