BOM 101: How to optimize Bill of Materials

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] /

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.


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