Projects that involve electrical products involve a lot more than just getting an assignment to build some electrical products, ordering any necessary materials, and then putting staff to work to create, produce, and test the materials. It is not that simple; given the complexity of electrical product design, it never will be.
One of the best things that any electrical product manufacturer or distributor can do to make sure they are not spending too much money or time on any given project is to organize the things they are doing. It is possible by learning about a concept that many manufacturers might already be familiar with but have not mastered perfectly: The bill of materials.
It is easy to forget the amounts of physical and operational materials that go into creating any given electrical product. A substantial bill of materials makes it possible to save money and even more time on last-minute operations in the long run. This guide will serve as an in-depth look at the bill of materials and what habits you should develop when creating and analyzing such a list.
1、 What Is A Bill Of Materials?
Electronic products are made up of numerous parts. This list of features needs to be created, checked, and even audited regularly if your organization is responsible for manufacturing and distributing any electronic product. It cannot be ignored.
In a complete layperson's terms, the Bill of Materials (BOM) could be considered the "shopping list" of any given electronic product manufacturer. It should contain everything necessary to make sure that you get the parts you need for your product.
The BOM should answer as many questions related to your electronic product as possible, from what they are, how they should assemble, to what kind of staff, and how much team is necessary for the assembly.
Let's compare the tech industry to the service industry. Would the proprietors of any given business in the service industry not come up with similar lists? Of course, they would. They essentially have their version of a BOM, which assists them when they need to order supplies or hire staff.
It is no different when it comes to electronic product manufacturers. Although some of the items on their list may be different, it is still essential for them to create one.
An example of a bill of materials
Let's say that a client contacts you and wants you to create and build about 100 circuit boards for a new mobile device going through beta testing. What many would incline doing is to prepare to order whatever materials they believe they may need for all 100 circuit boards.
It is not the right approach and is where creating an accurate bill of materials would save much money and unexpected complications after production has begun. Instead, it would be much more useful to take exactly one of these circuit boards, detecting only one of the required content, then make a list of materials and operations necessary to produce it. Here is an example of what this might look like:
Image 1: BOM
Now, this is just a small example with legendary figures. However, the categories, BOM level, part numbers, and part descriptions are genuine. Moreover, they should be the first thing to consider when preparing a bill of materials.
Difference between EBOM and MBOM
Because of the numerous processes and operations involved in electrical components, one single bill of materials may not provide enough organization for any given electrical element or product. Further, bills of materials are handed off to suppliers, so they not only need to be accurate, but they also need to be simplified and diversified.
Two different bills of materials are necessary - The engineering bill of materials (EBOM) and the manufacturing bill of materials (MBOM). Both of these serve other purposes but are equally as important.
EBOM focuses on the design and creation of electrical products. It will contain the physical parts, components, and optical assemblies. The EBOM is typically created by engineers who have detected what elements are necessary for any given electrical product. The EBOM answers the "how" of what is needed to construct and produce electrical products.
A manufacturing bill of materials (MBOM) answers the "what" when constructing and producing electrical products. While the materials mentioned in an EBOM entail what is necessary for a project, it only draws up a blueprint of the bare essentials and physical materials. The MBOM puts everything together and entails all the materials needed for the components of the EBOM to be put together in the first place.
2、How To Create A BOM
Image 2: BOM
There are three questions you need to be asking yourself when creating a BOM for your next project: The "when," the "what," and the "how." After discussing these topics with your selected staff and the client who has assigned the project to your organization, you can then proceed with your project.
It would help if you thought of an electrical product project like the head chef of a restaurant feels when preparing their restaurant. There are more similarities between the two than you think.
Most restaurants need to answer these three questions quickly, accurately, and in the right order. If they do not (and most do not), they usually face dire consequences down the road.
It is what happens with smaller-scale restaurants. They approach these questions in an air of panic, not knowing what question to answer first and getting less than complete information on answering these questions. The larger chain restaurants have an established system of answering these questions.
The system in question is the same when it comes to electrical product projects. When you have been assigned an electrical product project, you are essentially preparing something, just like the head chef at a restaurant meets preparing food for diners. The only real difference here is that there is no real creative factor involved. There is no "menu creation" for an electrical product.
When should this project ideally be finished by?
It becomes the first question that needs to be answered. Without a proper time frame, you don't know what kind of preparations and people you need to do. Because the components in the EBOM are costly, you need to have a time frame. Do you need to ask: When should this project ideally be finished by?
Note the wording of this question: When should this project ideally be finished by? The best reason to ask what should ideally accomplish something is if you give you a time frame, you'll get a much better idea of how many people you will need for this project and how long they need to work. It will allow you to save money on the materials in the EBOM.
What will I need for this project?
Answering this question will reveal what your EBOM is. Remember, you do not want to create an EBOM from an estimate. The only instance where an estimate or a range is acceptable is when a time frame for the project is determined. When determining the EBOM, you need to create an EBOM for one product, and then multiply that by the number of products the project is requesting.
How do the materials in the EBOM operate correctly?
This question will reveal what you will need in the MBOM. Remember that the MBOM answers the "how" questions that arise after creating the EBOM. Also, remember that the MBOM includes anything and everything necessary for not only things in the EBOM but also supplies that your staff will need for a swift and convenient production process that will save time and money.
3、What Does A BOM Exactly Entail?
As mentioned earlier, the BOM is a comprehensive list of necessary materials for a project. What is overlooked is how this list is created and how whole things indeed are. The BOM entails a lot more than one big list of materials that are necessary for a project. The keyword for the BOM is comprehensive. The BOM is a complete list of materials needed for a project, not a general one.
The BOM should resemble a spreadsheet. That contains the serial number of the item, the description of the article, what category the thing about the final product, where it will be used about the final product, the kinds of software or documentation that is necessary for the work, and the number of each project required for the project.
Another thing to consider is how many levels the BOM contains. Certain items on a BOM, particularly an EBOM, require a separate BOM for all the parts that they need. It is known as a multi-level bill of materials, which will be mentioned later.
Image 3: BOM
4、Why Is A BOM Important?
Anything that involves electronic products requires a lot of organization and operations when it comes to any materials. The purpose of a BOM is to make sure that everything involved in an electronic product project is operating smoothly. When this process is not organized correctly, a lot of unsavory things can happen.
The creation of a proper BOM can reduce the costs involved in a project. Because there are many materials necessary when it comes to a project, much money goes into them. If a BOM is accurate and organized correctly, it can save a lot of money. One of the worst things that any manufacturer can do is rush to create a BOM. If the logistics list is in a hurry, two things can happen.
First, insufficient material is ordered, and it will cost more money to get more materials contained, especially if time is of the essence, and you need the materials delivered quickly.
The second thing that can happen is that you can get too many materials, it also means spending too much money. While it is true that you will possibly have surplus materials for the next project, the amount paid exceeds the necessary amount.
Staffing and Personnel
One thing related to cost is employees and people. Having staff to work on a project is something that should be directly determined by what is contained in the BOM. If you don't take the BOM seriously, it can affect employees to hire too many people. The staff members will not be compensated the way they like or also employ a few people, and their production will suffer from being overwhelmed and overworked.
5、How Many Levels Does An Ideal BOM Have?
"How many levels does an ideal BOM have?" is a trick question. There is no hard and fast answer to this, and it would be foolish to think that there is anything "ideal" when it comes to a BOM.
From the standpoint of saving money, the ideal BOM only has one level; this way, fewer materials need to order, and there are not as many procedures involved.
From the standpoint of making sure that a project is significant, the ideal BOM has many levels. The more stories that a BOM has, the more attention to detail involving the necessary assemblies. However, this could cost more than necessary.
Now answer this question: Given the diverse and complicated nature of building any given electronic product, could there possibly be an "ideal setting" for any of this?
The answer is no.
Different projects demand different materials and other ways to assemble these materials. Because of this, we need to create a different BOM. Some of them only have one level, and some of them have multiple levels. There is no "ideal" BOM, not if you are interested in saving money.
There are a couple of things to consider when determining how many levels a BOM should have, and if you are interested in a successful project where costs are as low as possible, you will consider these.
Designers or electrical engineers?
First, you need to consider if the project utilizes designers or electrical engineers. Because most designers usually think regarding multiple phases when creating, creating a multi-level BOM would help them work much more efficiently.
If an electrical engineer faces a single task, it is usually more effective. They have no problem picking and choosing from a multitude of materials to create whatever component is needed.
How involved are the parts?
Sometimes the parts involved in a BOM are complex and require a lot of different aspects to construct. It is the most common reason why there would be a need for a multi-level BOM. A multi-level BOM means that they can micromanage efficiently, and this can save money and time on some of the more complicated operations of a project since it is easier to detect things that go wrong.
If the parts involved in a project are not complicated, it would be a better idea to have a single level BOM since there would not be necessary to order smaller materials to assist in constructing the part.
6、An Example Of A BOM As It Relates To Manufacturing
The most common BOM should resemble a spreadsheet. If there are not many items in your BOM, using a spreadsheet is not a bad idea.
The problem with using a spreadsheet for a BOM is that it requires manual entry whenever something is added or changed. It can meet with a few complications, and if there are many items in the BOM, making changes can be very time-consuming.
Keeping that in mind, here is an example of a manufacturing bill of materials (MBOM). Because the MBOM is usually much more comprehensive than an EBOM, it is highly likely that it will be multi-level. In the interest of simplicity, this is an example of a single level MBOM.
Now, this BOM is unrealistically short and contains fictitious information, but it is a good example. What you might need to do if the BOM is very long is to recruit staff to update your BOM.
The bill of materials can be one of the costliest portions of your production, manufacturing, and distribution of any tech product, but it does not have to be. There are ways to come up with a BOM that can drastically reduce costs.
Image 4: BOM
Because of the volume and complexity of the materials involved in any project, the BOM cannot be ignored. Contact us to get in touch with an advisor who will be able to outline anything and range entirely to production and assembly regarding your projects.