A Bill of Materials (BoM) is often compared to a recipe – both identify and list the components of a finished product. While the recipe identifies the required ingredients, preparation steps and presentation recommendations, in manufacturing terms the BoM identifies and lists all raw materials, sub-assemblies, with layers of data that are interrelated, including even intangibles that contribute to the costs of manufacturing a product. Like recipes, there are different types of BoM based on their usage, complexity, accuracy, levels of detail, etc.; critical aspects of product creation rely essentially on Engineering and Manufacturing BoMs and how they interlock in context of the Product Life-cycle Management (PLM).
| Engineering Bill of Materials (EBoM) | Manufacturing Bill of Materials (MBoM) | |
| Definition | The EBoM is organised with regards to how the product is functionally designed, including logical assemblies, product knowledge (including historical) and dependencies which make sense during the design phase (to optimise reuse). | The MBoM contains all the parts and assemblies required to build a complete and shippable product, reflecting the way a product will be manufactured, focusing on parts as they exist in the physical world. |
| Dependencies | It is typically driven from CAD and usually contains the final assemblies list of parts or components. | It is driven (or based on) by the EBoM, representing the expected ‘end item’, including additional information that was not required during design such as packaging material, assembly process information, tooling, work instructions, paint information, supplier information, etc. |
| Typical Owner | Head of Product Development | Head of Manufacturing |
| Relevance / Importance | Without the EBoM, there is no MBoM, no product. It regroups all logical components and parts that characterise what a product means, from a feature point of view, carry over information from other products, material, etc. | The MBoM enables the final transition from product concept to a concrete, touchable object; it drives manufacturing, operations, purchasing and logistics for a product – feeding business systems used to order parts and build the product, including Enterprise Resource Planning (ERP), Materials Resource Planning (MRP) and Manufacturing Execution System (MES) solutions. |
| Structure | The EBoM may not provide any information about how parts relate to each other; it is organised according to the engineers’ design process and often contains groups of un-associated parts collected together for convenience in working with the CAD models and functional structures (e.g. mechanical, electrical BoMs, etc.). For the engineers, the many sub-assemblies needed by manufacturing add layers of complexity to the structure and make it harder to work with the CAD model. | If an item needs to be purchased, processed or inventoried to make the product then it needs to be represented on the MBoM, regrouped in various levels to describe each stage of the assembly process in more detail. |
| Master Data System | PLM | PLM or ERP? |
Producing products with a wrong or faulty component in an EBoM is not so easily resolved. Last minute root cause analysis and rework on a live production line or a mature product component can be very costly.
The earlier BoM issues are identified and addressed, the lower the cost impact on product Engineering and Manufacturing.
Late identification of BoM issues can negatively impact company performance through:
- BoM synchronisation issues, e.g. with Engineering issues leading to Manufacturing issues, or Manufacturing issues requiring both costly Engineering and Manufacturing changes (shop floor process, manufacturing process, material, supplier data, etc.).
- Costly and inaccurate manual interventions to resolve issues – leading to potential compliance issues, additional BoM ‘admin‘ branching and overarching ‘admin‘.
- Inaccurate inventory levels, supplier cost issues.
- Incorrect product costing and potential accounting variances (ie negative cash flows due to overspends or inaccurate financial forecast and budgeting).
- Warranty issues and customer returns or recalls, with potential commercial liability claims and leading to potential brand perception issues.
- Production out-of-spec components.
There are different schools of thought with regards to EBoM and MBoM alignment. Synchronising and maintaining EBoM and MBoM alignment requires a lot of preparation, as what is managed on the Engineering side differs significantly from the Manufacturing side (approach, usage, life-cycle, dependencies, etc.); the two need constant alignment and maintenance to ensure seamless business continuity (…).
A complete and accurate EBoM can better prepare manufacturing for production runs and supports the New Product Introduction (NPI) process along the way. PLM has become the ultimate ‘tool‘ to synchronise EBoM and MBoM, integrating an Engineering feedback loop to Product Development, though the there are still debates about where the MBoM is to be ‘mastered‘, either in ERP or PLM…
What are your thoughts?
This post was originally published on LinkedIn on 17 August 2015.
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