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The Datacor Blog

How to Prepare a Bill of Materials for Process Manufacturing

June 9, 2022 by Jinelle Park

Using a Bill of Materials (BOM) brings significant efficiencies to a manufacturing process. A BOM also ensures traceability and compliance with industry regulations. Digital versions can be integrated into ERP software, facilitating operations on the shop floor.

A Bill of Materials (BOM) is a critical part of process manufacturing. Essentially, it is a list of every component or ingredient needed – and the quantities – to repeatedly make a particular product, as well as a set of instructions that guide you through the production process.

Without a BOM – also widely referred to as a formula or recipe – a company leaves itself open to an inefficient, and more costly, manufacturing process – not mention the risk of production errors and waste.

A BOM also ensures that all the components required to make the product are in stock and at the necessary quantities, which helps with maintaining accurate inventory and procuring materials at the right time.  

So, what benefits can a BOM bring and why should I use one? First of all, it ensures that a repeat product is made to the same formula and quality each and every time. This is especially important for industries like chemicals, pharmaceuticals, and food & beverage, which are strictly governed by various regulations.

In the case of an audit, or even a product recall, for instance, a BOM can be used to trace the different ingredients to demonstrate compliance, or identify an error.

Nevertheless, despite the manufacturing advantages of a digital BOM, many scenarios still exist in firms where the content of a particular formula or recipe is held in someone’s head – a known BOM – which could possibly work just fine, until the day that person is no longer at the company.

The BOM could also be written as just notes or a list in a book or file – a manual BOM – which risks the information becoming obsolete or out of date. As soon as there is paper involved, the process becomes uncontrolled – and indeed uncontrollable – bringing inherent risks, such as using the wrong version and shipping off-spec product to your customer.

Standard Elements

As mentioned previously, the standard elements of any BOM include the name and possibly the code of all ingredients, which should be easily recognized and identified by everyone involved in making the product. Quantities too should be specified by standard units of measure, be they pounds or tons, for example.

Not to forget there can also be variations of a particular BOM as there may be more than one formula to make a certain product. Think tomato sauce – there could be one BOM that uses fresh tomatoes and another that uses canned tomatoes – both using different quantities.

Below exemplifies the BOM for a classic order of pancakes:Pancake Graphic

Then a set of instructions should be included on how to make the product – from start to finish – as well as the required packaging. A separate BOM is often created just for the packaging, specifying the material and/or type of container to be used, together with any special loading instructions and the name of the customer.

How is a BOM Created?

In the first instance, it may seem an easy and straightforward task to create a BOM, but the level of detail is extensive and, of course, accuracy is paramount. Make just one error and the whole production process could be thrown off course. Below is an example of a manual BOM:BOM_Sample_Page_1In process manufacturing, the lab is the starting point for a BOM, which is created through a product’s research and development process where the company is formulating its own product. For a contract manufacturer, the BOM will come from the customer.

As the lab runs batches of the new product, and refines and tweaks until it meets the customer’s specification, then the BOM will be consistently updated until it reflects the final, agreed recipe, which the company can then publish on its ERP system.

Factors to consider when creating a BOM is to first determine what data needs to be included. Then, agree who will have control of the BOM and the right to make changes. Any changes should be tracked and traced back to the original author.

Automation is Key

A digital process – and integration into ERP software – brings significant value to a manufacturing system, helping to facilitate the process on the shop floor. Any revisions to the digital BOM are automatically communicated to the various teams in the company so they can adjust their operations accordingly. For example, if a particular ingredient in a formula is changed, the procurement department will need to order in supplies of the new one and the production team may have to adjust its manufacturing process. The revised BOM will automatically flow through the relevant departments, so that a business is fully prepared to make the right version of the customer’s product at the right time, with no nasty surprises at the end of the process.

Seeking to enhance or scale your business? Then a formal, managed and documented BOM will be crucial to a consistent, efficient and compliant manufacturing process. It really is a no-brainer!

Images (26)-1

The above displays Datacor's digitized BOM. Learn more here.

Frequently Asked Questions (FAQs)

What is a Bill of Materials (BOM)
A BOM is a centralized extensive list of raw materials, components and instructions that are required to manufacture a product.

Who creates a BOM?
In a process manufacturer, the BOM is usually developed in the first instance by the R&D team in the lab, while in a discrete manufacturer, it could be the design and engineering department. Other functional teams, including procurement and materials management will also be involved.

What are the benefits of using a BOM?
Benefits include standardization, consistency and traceability of products used in a company’s manufacturing process.

To learn how Datacor can help your company simplify and digitize BOM's, while increasing efficiency, sign up for a personalized demo today.

Topics: ERP

Jinelle Park

Written by Jinelle Park

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