Whether one of your machines has broken down and you need a replacement part, or you’re completing a manufacturer’s order and you need the right components, before those raw materials hit your production line, your procurement team needs to carry out a little shopping. Sourcing the right number and type of component parts is an essential part of your manufacturing business, we all know that heading to the grocery store without a list is a bad idea, and the same logic applies to the procurement process of your OEM enterprise.
A BOM is essentially a comprehensive shopping list, put together by your purchasing team, that contains an extensive shopping list of the parts and components needed to assemble a final product. While most BOMs explain where to purchase these parts, more OEMs than ever before are utilizing this BOM tool to source their components and streamline their procurement process. Of course in terms of sourcing the right components for your production line it’s easy to see why a BOM is so important, but your Bill of Materials also plays a vital role in other areas of your OEM, let’s take a closer look at these below.
It Keeps Your Manufacturing Process Accurate
Accuracy during the manufacturing process isn’t only applicable on the production line, it begins with your BOM. An accurate Bill of Materials ensures that your assembly line runs smoothly and isn’t impeded by mistakes, incorrect components or quantities. By moving to a digitized, online-based BOM tool, you’ll have the ability to prevent these debilitating mistakes from occurring and ensure that your final products are put together in the specified time frame with the right components.
It Keeps Costs Under Control
Sourcing components and electrical parts is one of the biggest drains on your financial resources. Without a BOM, you’re at risk of overspending on your monthly component budget, as a lack of clarity of parts and quantities can be a huge headache for your procurement team and your production line. Without your BOM, you’re at risk of ordering the wrong parts, the wrong quantities or having additional orders made due to a lack of clarity and communication across your departments.
Keeps Your Inventory Organised
As an OEM, storing surplus inventory leads to an excessive loss of revenue, not forgetting that the quality of these components or electronic parts will deplete over time, diminishing their initial value. Alternatively, a shortage of inventory and specific parts means you’re more likely to turn orders away or fail to meet the standards expected by your clientele. A BOM keeps your inventory organized and accurate, ensuring your business is able to meet the demands of your clients and your manufacturing partners.
Departments Are Working as One
Interdepartmental communication can prove to be a real headache, especially when that lack of unity leads to additional component orders, duplicate instructions and double the revenue loss. A BOM tool that can be shared across all departments, keeps the lines of communication open, helping your departments to work as one. This sense of unity also means a better working environment for your staff, improving productivity and employee retention.
Who knew that a BOM was such an important tool for your business? Consider updating your approach and head online to utilize a BOM tool.