Bill of Materials

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Bill of Materials
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Contents

• Definition of a bill of materials
• How a bill of materials is used
• Types of bill of materials
• Bill of materials information
• Benefits of a bill of materials
• Examples of bill of materials

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Definition

• Bill of materials (BOM) a listing of all of the
  raw materials, parts, subassemblies, and
  assemblies needed to produce one unit of a
  product.
• Each finished product has its own bill of
  materials.
• Product structure tree Visual depiction of the
  requirements in a bill of materials, where all
  components are listed by levels.

Bozarth, Cecil C. and Handfield, Robert B.
Introduction to Operations and Supply Chain
Management . Pearson Education, Inc., Upper
Saddle River, New Jersey, 2006. p.461.
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Definition Explained

• Basically, a bill of material (BOM) is a complete
  list of the components making up an object or
  assembly.
• It is also part of material requirements planning
  (MRP) input.

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Processes that utilize a BOM

• Production
• Materials planning
• Product costing
• Plant maintenance

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Types of BOMs

• Static (fixed) bill
• A bill of material for a part that is normally
  made from the same components, labor and raw
  materials.
• Used for standard assemblies, components, and
  engineer-to-order customer orders.
• Example
• A bill of materials for a standard chair

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Types of BOMs

• Dynamic (parametric) bill
• A bill of material for a product or part for
  which size, color, laminate, and other options
  can be selected.
• Example
• A bill of materials for a Dell computer

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Structure of a BOM
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What information is on a BOM?

1. Quantity
2. Item ID
3. Description of Item
4. Cost of Item
5. Total Project Cost

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Quantity

• Tells user how many of each part is needed for
  each project
• Example
• A chair needs 1 seat, 4 legs, 1 back, and 5 nails.

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Item ID

• Tells us which part to order
• Can be any of the following
• Catalog number, UPC, or any other identification
  number.
• Example
• The chair needs a 2PC seat, 5DR legs, 6TU8 back,
  and 1 inch nails.

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Description of Item

• Provides a check that the correct item is being
  ordered.

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Cost of Item

• Cost is included to show how much each part is
  per item and the total cost of all like parts.
• Example
• The cost of a leg is 5 per leg. Then the total
  price of the legs ordered would be 20 because
  there are 4 legs.

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Total Project Cost

• Shows the total cost of all items and is also the
  total cost of the direct materials used in the
  project.
• Example
• Seat-10, Back-5, Leg-5 per leg, Nail-.5 per
  nail
• Total Cost of a chair 10 5 54 .55
  37.50

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BOM Example

• Quantity ID Description Unit Price Total Cost
• 1 6TU8 Back 5/Unit 5.00
• 4 5DR Legs 5/Unit 20.00
• 1 2PC Seat 10/Unit 10.00
• 5 1 Nails 0.50/Unit 2.50
• Total Project Cost 37.50

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Assembly Diagram Product Structure Tree
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Example
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Example 1 (Cont.)

• Using the information above to do the follows
• a) Determine the quantities of B, C, D, E, and F
  needed to assemble one X.

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Solution to Example 1
a).

• Thus, one X will require
• B 2 C 1
• D6 F 2
• E 28 (Note that E occurs in three places, with
  2224)

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Example 1 (Cont.)

• Using the information above to do the follows
• a) Determine the quantities of B, C, D, E, and F
  needed to assemble one X.
• b) Determine the quantities of B, C, D, E, and F
  needed to assemble ten X's, if you have the
  following in inventory

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Solution to Example 1 (Cont.)
b).

• Thus, given the amounts of on-hand inventory, 10
  Xs will require
• B 16 C 0
• D 40 F 0
• E 116 (16100)