We all know what a bill of materials is for businesses. It is a significant step in the manufacturing process. It is also known as assembly components lists, product structure or product recipe. BOM is the foundational step in the manufacturing and the supply chain process such as material requirement planning, inventory planning, scheduling and product costing. In this blog, let us learn more about the bill of materials in detail.
Meaning of BOM Explosion
In the manufacturing or supply chain industries, the Bill of Materials explosion or the BOM explosion is a commonly used term. What is a bill of materials BOM? It is the process of breaking down a product’s elements into a comprehensive list of individual components, materials and specifications. So, BOM explosion is a crucial step of the manufacturing process and it is cost-effective.
The BOM explosion process begins with the examination of product design and material requisites, components and specifications. So each component here is broken down into individual elements, materials and specifications. BOM explosion is also known as “exploding” the BOM. Its results are used to determine the materials, specifications and components required for the production process.
The bill of materials BOM comprises information regarding materials, components and specifications needed for the manufacturing process. With this, additional information is also added which is crucial for the manufacturing of the product. After the creation of a bill of materials BOM, instructions are framed for the manufacturing process. The instructions include the steps to be taken and the sequence of the steps with the materials and components required to complete the production process.
Further, all the above information is used to create a production schedule. A production schedule determines the time taken to complete each step and the necessary materials required for production. We have learned earlier about the importance of the BOM, this process is used simultaneously with other significant processes such as quality control and product design.
Overall, this process gives an assurance that the manufactured product meets all the stipulations such as durability, size and weight. Plus, this process is cost-effective and efficient. Summarizing, we understand that the BOM ensures that the required materials and resources are available for a smooth production process. And BOM explosion occurs when the production process deviates due to the excess use of components or there is an issue with the manufacturing process.
Also Read : What is a Bills of Material (BOM)?
What are the causes of BOM Explosion?
A bill of materials BOM explosion is a serious phenomenon that occurs in the manufacturing process when the costs of the manufacturing operation increase. The explosion also transpires if the number of materials used in the production increases and it results in the explosion of materials. Let us discuss some of the factors that cause BOM Explosion.
1. Extensive globalisation of manufacturing
The rise of global manufacturing has made the BOM process more complicated. The materials can be sourced from anywhere around the world to use in the manufacturing of finished products which complicates BOM. To add more to the complexity, the business must keep up with the trends and standards of different countries.
2. Outsourcing tasks
Companies are now turning to outsource their production requirements which increases the need to use components that are sourced from different suppliers. This results in a bill of materials ebom. The complication here is that all the materials and components have to be tracked and managed within the manufacturing process.
3. Intricacy of designs
The complexity in BOM arises when there is technological advancement, which results in the requirement for more materials or resources. Plus, a bill of materials BOM becomes complex when the components used become more standardised, which will result in the surging of the number of variants and versions of the product.
4. Compressed product lifecycles
All companies aim to stay competitive and achieve growth. For that to happen, they must shorten their product lifecycles which results in an increase in the number of components that have to be kept on par with the latest trends. This also causes the BOM explosion as the components have to be tracked and managed within the production process.
5. Emergence of new technologies
BOM explosion can happen with the implementation of new technology into the business. This will increase the number of components that have to keep up with the latest trends. However, the infusion of technology is crucial for the business to stay updated and relevant.
6. Demand to meet increasing environmental compliance
Nowadays, environmental regulations are becoming stringent for businesses to follow. Due to that the standards of the manufacturing processes are also stricter which results in the number of components that must adhere to the regulations leading to a bill of material BOM explosion.
7. Intense competition among businesses
Competition is common in a business landscape. So, when there is intense competition among the manufacturers, there will be an increasing need to lower the cost of the production process. This can lead to a bill of material explosion. The materials have to be sourced by the business to keep the costs down. Bill of material explosion can have a serious impact on the cost of production and the efficiency of the production process.
Hence, to tackle the complexity of the BOM, an efficient production process must be followed. And the components used in the production process have to be tracked effectively. In this way, the cost linked to the BOM can be kept at a minimum and simultaneously keep up with customer demands.
How to eliminate the risks associated with a BOM Explosion?
We have learned above regarding the significance of the bill of material for manufacturing. A BOM is a crucial document listing all the materials, components and other items that are required to produce a product. BOM makes it clear regarding the materials and components that are needed for the manufacturing of a product and the costs associated with it.
The problem of a bill of material explosion is a common issue occurring in the business. It can cause costly delays, mistakes and other related problems. Here is a list of issues that can cause a BOM.
When the product has too many components, this will eventually increase the complexity. As a result, costs and the number of parts required to produce a product will increase. In addition, it can also decrease the quality of the product, as more components will possibly cause errors. However, there are remedies that can be taken to rectify this situation.
In the first step, check the clarity of the bill of material. This will minimise the intricacy by helping the business to identify potential issues with the parts. A clear-cut list stating all the requirements of the materials and components has to be created. It will help in better planning and the ability to identify potential risks with the components that can be identified.
Another way to minimise risks is by using fewer standard components for the manufacturing of a product. It is crucial to test all the components used for the production process, frequently checking if they qualify to meet the specified requirements. Finally, review the bill of material document.
All these steps will help in identifying the problem and the issue can be immediately addressed. With this review process, add a risk assessment plan to identify risk areas deeply. All these will reduce the issues of a BOM explosion. Risk mitigation will reduce overall manufacturing costs, improve efficiency and ensure a successful manufacturing process.
What is the cost of a BOM Explosion?
Bills of materials explosion is a term used to elaborate the use of more components to produce a product. It normally happens when a manufacturer uses too many components to design the product rather than what is necessary. As a result, there will be a dramatic increase in the costs due to the additional components purchased and assembled.
The cost incurred in a BOM can be seen in the actual materials, labour, and time taken to manufacture a product. Plus, the costs can be noticed in additional parts, labour and the duration taken to assemble and test the product.
To further comprehend the concept of BOM explosions, the component-level engineering must be clearly understood. It refers to the process of designing each part separately. And this process adds on additional parts which increases the cost of manufacturing. What’s more is that if the parts aren’t designed properly, additionally more parts are required for correct design which will increase the cost of production. Costs regarding assembling, testing and manufacturing can be very expensive.
The additional components used for the manufacturing process are expensive. And with it comes the assembling cost, the labour cost will be more when assembling additional components. Furthermore, a BOM explosion can occur if high-quality additional components are difficult to get or if it is too expensive.
In addition, an increase in the number of components can take more time to assemble the product. As a result, there will be production and delivery delays, which will impact customer experience and financial loss.
Apart from that, the cost of the BOM explosion can be spotted in additional testing and quality control. In the production process, additional testing is sometimes done to ensure good product quality. Also, for this process, additional hiring such as hiring a third-party testing agency or purchasing additional testing equipment can incur costs.
Also Read : 10 types of BOM and why they matter?
How to Avoid BOM Explosion?
A Bill of Material BOM is a major source of information to manufacture a product. What can be done to avoid a BOM explosion? A manufacturing bill of materials explosion can be avoided by using a flexible bill of materials management system. And also this system should have elaborate details of the manufacturing operations. Plus, this system should also allow adding revisions and updates if required. So, if the BOM is updated and detailed there will be very little room for a BOM explosion.
Next step, pay attention when analysing each component and material used for the manufacturing process. Keep in mind that every component and material used for the manufacturing process is used to make a final finished product. Make sure to remove unnecessary components or they will contribute to BOM explosion.
The third step that is very helpful in avoiding BOM explosion is automation. Automation helps streamline the entire production process. Technology like ERP software is very helpful in managing the entire BOM process without creating extra costs or wastage. Plus, it simplifies processes, reduces errors and eliminates bottlenecks.
The last step is to regularly review the BOMs ensuring that it is up-to-date.
Conclusion
Finally, we have learned that BOM explosion is referred to as the process of breaking down a product’s components into a comprehensive list of individual parts, materials and specifications. BOM explosion can occur due to many factors like excessive use of additional components which will increase the production costs, etc. It can have a severe impact on the costs incurred in the production process and is capable of causing bottlenecks. However, there are multiple ways to avoid a BOM explosion, one being the implementation of an ERP system that can streamline the entire manufacturing process.
