Blog

Manufacturing Bill of Materials

5 August, 2019

With the changing global landscape, CSIRO reported in their roadmap for unlocking future growth opportunities for Australia, that Manufacturing markets across the world are being transformed by both demand and supply side drivers. One of the main megatrends depicted below is the higher expectation from consumers is causing a shift from mass production of goods to bespoke solutions.

CSIRO Global Manufacturing Megatrends.png

Manufacturing in Australia is one of the toughest businesses to get into from the level of international competition and competitive pricing. It’s no surprise that people buy Australian made products for its quality in material, standard and compliance. With the internet making commerce easier to do business locally or internationally, the opportunities arise to diversify product and services and expand into international markets. The excitement comes with its challenges to properly capture true cost within the production, expanding out to the business as a whole. With all that in mind, your ERP system is meant to help make informed decisions quickly and correctly.

In a manufacturing business, nothing is worse than manually having to work out and manually track production cost from a production line or job itself to capture the true cost of production. Companies that do this, are heavy on supervisory staff that work unproductively manually tracking cost in spreadsheets or have a silo piece of software to track their cost but no intelligence and efficiency of material planning, staff scheduling, cost of production and work in progress on a financial level.

We see this all too often when businesses have grown and their entry level software has not been able to keep up with the level of complexity associated with the growth of the business, resulting in profit leakages and costly decisions.

Whether you are a small business mixing a few ingredients together and bottling the finished item or building small to large bespoke jobs with a larger workforce and sophisticated machinery like CNC (Computerised Numerical Control) machine. Modern ERP manufacturing systems should support multiple types of environments, whether that’s make-to-stock, make-to-order, engineer-to-order, configure-to-order, project centric, job shop, batch, and repetitive.

Whether you are manufacturing widgets or custom made to order, you need the flexibility to have Bill of Material (BOM) items or a product builder to custom build the BOM. 

BOM is a record in the system that list of raw materials, components, and assemblies to construct, manufacture or repair a product or service. 

BOM are critical in the routing process of the manufacture. Typical features are;

  • Directly connect materials, work instructions, and overhead costs to an operation.
  • Lists the components required to produce an item as well as any subassemblies and their components. Provides both an engineering and costed view of the entire product structure.
  • Maintain a complete revision history of your BOM/Routing. This allows you to save and view multiple revisions, both past and future, as well as the reason for the revision.
  • Allows for multiple costing methods; average, standard and actual. Other costing capabilities include the ability to add tooling costs and overhead costs; both fixed and variable.
  • For planning and execution activities you can enter the date the material will become available for use and assign a date the material will no longer] be available for use.
  • Provide detailed work instructions that describes the specific work that needs to be performed at each operation. Through the steps and standard note capability, you can document the entire process.
  • Allows user to enter phantom items into the BOM. These items show up on the BOM, but disappear when the Production Order is created. Changes to phantom items, such as components or quantities when made at the BOM level are carried throughout the system.
  • Flexible cost roll can be utilised for a single level BOM or multi-level BOM, by Item, or Site. Costs of the lower level items will “roll” into the costs of the higher-level items. In a standard cost operation, costs will update the Pending Standard Cost for each item in Inventory.
  • Ability to support multiple sites and have different or alternate BOM/Routing for each different site.
  • For custom orders, a feature commonly known as the product configurator allows products to be configured in multiple ways on quotes, sales orders and/or production orders. JAMS Product Configurator greatly reduces the number of bills of material/routing for a finished part based on a variety of features, options, dimensions, and functions.

The common features with a product configurator are; 

  • An item can be configured using predetermined features and options. The results of the configuration can carry forward to a production order.
  • The system provides for multiple dimensional calculations and formulas in order to calculate the material requirements for the specific components for the configuration.
  • The system provides for multiple dimensional calculations and formulas in order to calculate the material requirements for the specific components for the configuration.
  • Based upon the features and/or options chosen, the system has multiple price roll up capabilities to determine the actual unit price for that specific configured item.
  • Easily look up a customer’s previous configuration to create the order or make adjustments from the prior configuration.
  • Providing the user an easy way to create a new configured order by simply copying or modifying an existing configured order or quote.
  • Providing the user an easy way to create a new configured order by simply copying or modifying an existing configured order or quote.

In short, if you are looking for a solution to better control your bill of materials, look for a turn-key system that offers a complete manufacturing automation system from managing sales orders, purchase and forecasting, inventory, warehousing, production, shipping, fulfillment, and accounting from a single, integrated solution.

To know more about how an ERP system can help your manufacturing business, get in touch with us today for a demonstration.

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