What is BOM? Types of BOMs in businesses today
BOM is a familiar term in enterprise production activities. Today, BOM plays an important role in helping businesses plan materials for the production process. In the article below, let's learn with 1C Vietnam what a BOM is as well as the popular types of BOM today.
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1. Learn what the term BOM is?
BOM is the abbreviation for the phrase "Bill of material", which means material norms. Specifically, a BOM is a list of raw materials, components, and instructions needed to build, produce, or repair a product.
2. Benefits of BOM for businesses
Currently, BOM has become an indispensable tool for businesses thanks to the important benefits it brings in daily production activities:
- BOM not only helps businesses easily plan raw material purchases and estimate costs, but also allows for better control of inventory. At the same time, it also contributes significantly to minimizing delays and waste in the production process.
- BOM allows to identify and estimate the value of all required materials before starting the production process. From there, businesses not only know how to keep costs within budget but also ensure that the right parts and materials will always be available, at the right time, in the right quantity.
- BOM helps businesses save time and money by focusing on using the materials needed to produce the product. Thanks to a detailed list of required components, parts and components, the process of working with suppliers becomes easier and more effective than ever.
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3. Popular types of BOM in businesses today
Currently, there are many different types of raw material norms. However, there are two main types of BOM including production BOM and engineering BOM. Below is detailed information about each type:
3.1 mBOM (Manufacturing Bill of Materials)
mBOM (also known as production BOM) is the most popular type of BOM in manufacturing companies today. It is used to display information of all manufacturing and assembly parts required to create a finished product.
mBOM is built on data sources aggregated from many systems including enterprise resource planning (ERP), material resource planning (MRP) or in some cases execution systems manufacturing (MES).
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3.2 eBOM (Engineering Bill of Materials)
eBOM (also known as technical BOM) is a type of BOM that defines the design of a finished product. The eBOM will list all the components and instructions needed to make a given product, including product code, part name, part number, part revision, description, quantity, units measurement, size, length, weight and product specifications or features.
Engineering BOMs are typically created by engineers based on computer-aided design (CAD) or electronic design automation (EDA) drawings.
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4. Structures of BOM
BOM can be structured in two forms: single-level and multi-level:
4.1 Single-Level BOM
Single-Level BOM (English name Single-Level BOM) is a form of BOM used for products with simple structures, without small components. It includes the parts used in the production of a product and the parts are listed in order.
Although single-level BOMs are easy to create, they do not represent the relationships between main assemblies, subassemblies, and components used to build a product. If a product is defective it will be difficult to determine exactly which components need to be repaired or replaced.
4.2 Multi-Level BOM
Multi-Level BOM (English name Multi-Level BOM) shows the relationship between components, main assemblies and sub-assemblies. This type of BOM is used for complex products where assemblies can be divided into different levels.
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5. Main functions of BOM
5.1 Plan the quantity of materials
For businesses, calculating the quantity of raw materials and their cost for the production process is extremely important. To solve the above problem, the BOM tool appeared to help businesses more easily plan appropriate materials, creating conditions for smooth, efficient and accurate production operations.
5.2 Analyze and evaluate the actual quantity of raw materials
BOM supports managers in analyzing the amount of raw materials consumed during the product creation process, helping to make the numbers closer to the actual situation. From there, businesses can check and evaluate the difference in the amount of raw materials used compared to the plan.
Above, 1C Vietnam has provided information about what BOM is , its benefits as well as the main types of BOM today. It can be said that BOM is a necessary tool for businesses to plan and manage materials effectively and accurately. If you need support or answers about production management solutions, please contact 1C Vietnam today to receive expert advice and support!
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