Supply Chain Management

Do Better BOMs Equal Better Business? (Spoiler Alert: Yes)

Optimas | September 6, 2021

Improving the process of bringing a product from concept to market includes the cleanest possible Bill of Material (BOM) throughout the production lifecycle.

By prioritising your BOM and developing a proper BOM management strategy:

  • Part rationalisation exercises become easier, leading to cost reductions
  • Efficiencies across product lines improve to the company’s and customer’s benefit
  • Communications with supply chain partners improve
  • Eliminate wasteful soft costs like maintaining extraneous parts in your database (estimated at $1,600 per part)
  • Unite business functions like procurement, supply chain and operations

If these benefits sound appealing, read on and understand what a really good BOM can do for your business:

BOMs Remove the Noise

Parts production needs require accountability from start to finish — something a proper BOM makes possible. Accurate BOMs reduce confusion and inefficiencies during production.

Basically, it boils down to ensuring people at your company are communicating with the right people across the supply chain and you’re properly documenting the steps taken throughout the process. The more you can point to your BOM, the fewer possible issues can pop up. This includes part changes that occur throughout the production lifecycle.

By maintaining BOM accuracy, you sustain availability, ensure accountability and create a sense of ownership over the final product, both for yourself and your supply chain partners.

Better BOMs Lead to Better Relationships

Your BOM ensures all departments and supply chain partners are working as one. It is one of the most relied-on documents in manufacturing and accuracy counts.

A well-defined BOM brings order to the production process. It’s common for multiple departments—engineering, purchasing, operations—to all work from the same BOM. For this reason alone, it’s important for product leaders to make sure that the BOM is accurate from the beginning.

You can minimise frustrations by being proactive and designing a BOM that is complete and answers the questions that will inevitably get asked by production and finance leaders, your supply chain partners, and by even distribution channel executives.

Want Better Cost Savings? Strengthen Your BOMs

Cost savings can pop up in any number of ways during the production process. BOMs answer questions about materials, parts, assembly, and quantities. With that information, experts like those in Optimas’ engineering and supply chain teams can:

  • Forecast optimal production and labor schedules
  • Determine accurate product pricing
  • Adjust usage rate to minimise inventory and part excess
  • Identify possible parts consolidation
  • Source more affordable materials
  • Locate better quality materials
  • Develop customised solutions to existing processes
  • Create new processes to expedite production and reduce lead time
  • Offer re-design options and solutions to ongoing challenges

It’s a real eye-opener when customers see how an accurate BOM can create so many more paths to operational savings and production success. With a detailed and clearly illustrated BOM on the front-end, manufacturers achieve significant savings in the long run.

Final Thoughts

Customers rely on the teams at Optimas for our sourcing expertise, manufacturing capabilities, and the tech-enabled inventory manufacturing solutions we offer. These rely on complete and accurate information. Your BOM, like the fasteners we create, are the foundation for everything your operations can become.

If you’re looking for advice for creating better Bills of Material for your process manufacturing business, contact us.