Manufacturing and inventory

Bill of materials: getting BOMs right before you plan production

A wrong BOM makes every production order, material issue and cost estimate wrong. How to structure BOMs, include scrap allowances, and keep them current.

2 min read

In a factory, almost every number starts from the bill of materials (BOM). How much material to buy, how much to issue for a batch, what a unit costs, how much scrap is "normal" — all of it is calculated from the BOM. A wrong BOM doesn't fail loudly. It quietly makes purchasing, production and costing wrong at the same time.

What a good BOM contains

Field Example
Product Steel cabinet, 4-shelf
Output quantity 1 unit (or a batch, e.g. 100 kg)
Components CRC sheet, fasteners, powder coat, packaging
Quantity per output 18.5 kg sheet, 24 fasteners, 0.6 kg powder
Unit of measure kg, pcs, litres
Wastage allowance e.g. 4% on sheet
Version and date v3, from 1 Aug

Common BOM mistakes

  • Units of measure mixed — kg in one line, sheets in another, without conversion.
  • Packaging forgotten, so it is always "out of stock" mid-batch.
  • No version history, so nobody knows which BOM a batch used.
  • Wastage ignored, so actual consumption always exceeds plan and nobody knows if that is normal.
  • Sub-assemblies flattened, hiding where intermediate stock sits.

Checking a BOM against reality

The best test of a BOM is a production order:

  1. Plan a production order from the BOM.
  2. Issue material against it, and record what was actually consumed.
  3. Record output and scrap.
  4. Compare planned vs actual material.

Worked example

A BOM says 18.5 kg of sheet per cabinet. A production order for 200 cabinets plans 3,700 kg. Actual consumption is 3,950 kg, with 120 kg recorded as scrap.

  • Unexplained difference: 3,950 − 3,700 − 120 = 130 kg (3.5%).
  • Either the BOM understates the sheet needed, or material is being used or lost without being recorded. Either way, the fix starts with knowing the number.

How Zaqnet handles BOMs

  • BOMs with their material lines, and routings with steps at work centres.
  • Production orders planned from the BOM, with material issues, consumption, outputs and scrap logs recorded against them — see production orders and reducing scrap.
  • Stock for materials and finished goods across locations in ControlRoom.

Every production problem you cannot explain probably started in a BOM nobody has looked at since it was created.

Questions people ask.

What is a bill of materials?

A structured list of the materials, components and quantities needed to make one unit or one batch of a product. Production orders use it to work out what material to issue and what output to expect.

What is a multi-level BOM?

A BOM where some components are themselves made from other materials — a sub-assembly with its own BOM. It lets you plan and track intermediate products as well as finished goods.

Should a BOM include scrap?

The BOM should reflect what production really needs. Many manufacturers include an expected wastage allowance, and record actual scrap against each production order so the allowance can be checked and improved.

How often should BOMs be reviewed?

Whenever a material, supplier or process changes, and periodically against actual consumption. If planned and actual material use differ consistently, the BOM is probably wrong.

Keep reading.

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