A Bill of Materials also known as a BOM is a complex statement of information about products in manufacturing. As a manufacturer or a distributor working for a small ecommerce business, BOMs provide organization for sales and product documentation. You need to know how to read and understand the Bill of Materials information, to ensure everything is included in your sales information. This will help you improve sales by creating data that can be compiled for useful reports and analyses about your small ecommerce business. Read additional insight on the benefit of Bill of Materials and the different types of BOMs.
Importance of Bill of Materials
The primary benefit of the Bill of Materials is to provide documentation for products in an orderly fashion. Once you have defined the terms and keywords for data to be included for each product in your BOMs, you can use these in ERP and MRP software. Automating the product complexity for your ecommerce business will help you tremendously with speeding up sales and payment processes.
As a result, your business will grow with best practices toward product management. You also benefit from improved communications across departments with a Bill of Materials. Everyone has easier access to information to help them do their job more efficiently. Data can be accessed from wherever you are with internet connectivity, which also ensures everyone on the team will be able to update product processes on the spot. You are also able to automate invoicing and sales data, saving employees time and energy on manual data entry for each product manufactured.
The primary benefit of Bill of Materials is reducing the costs of manufacturing. No more missing information and messing up complete shipments. Instead, have updates completed at the time they are coordinated so the assembly and manufacturing processes remain up-to-date. This eliminates runs of products with misinformation and saves companies thousands of dollars every day. A Bill of Materials also protects ecommerce business owners and their investments when it comes time to fill out financial data. All of the information needed is compiled in a readily accessible format and reported accordingly thanks to the automation of the back-office systems.
Bill of Materials Basics
When you are working with a Bill of Materials, or setting up a new BOM for your product inventory, there are some things you need to know. Start with identifying what makes an effective Bill of Materials for beginners who have never used a BOM. Include these elements:
- Be highly detailed and specific to users who will access the Bill of Materials. Provide everything these individuals will need for their use.
- Develop an ongoing digital folder including all documents, files, images, links, and other information to be in every Bill of Materials.
- Utilize macros and templates along with spreadsheets to help you organize all the data.
- Include documents like lists and memos regarding assemblies, formulations, components, patents, photos, price sheets, and other information for products in the Bill of Materials.
- Set up the BOM to guide the construction or manufacturing of each product in your manufacturing catalogs.
The easiest and most efficient way to establish and maintain Bill of Materials listings is through BOM software. This solution allows your company to handle everything digitally and often includes tools for expediting information. You also benefit from increased security and ongoing product service, allowing you to further improve your business practices.
Types of Bill of Materials
In general, you will have more than one type of Bill of Materials for a single ecommerce operation. The Bill of Materials can be created for two different types of operations as well, including:
- Single-level BOMs
- Multi-level BOMs
A single-level or high-level Bill of Materials is used for products with minimal supplies or resources, such as flip-flop sandals. The information provided should only be applied as a guide for assembly or manufacturing products. A multi-level BOM is more advanced and covers sub-levels for a single product. Each level of the BOM serves as a parent item in which a child-level item is an offspring or offshoot of the main BOM. Here you have more detailed product information covering the cost, work process, and lead times.
Other types of Bill of Materials include:
- Engineering Bill of Materials
- Manufacturing Bill of Materials
- Configurable Bill of Materials
An engineering Bill of Materials provides information about manufacturing a new and finished product. Also called an EBOM, this information serves the needs of engineers with products including jet propulsion and other motion-activated mechanisms. A manufacturing BOM is the most common type that we see and covers processes involved in the making of a product from start to finish.
The last one, a configurable Bill of Materials, is also referred to as BOM with parameters or Matrix BOM. This type of BOM is used for bulk manufacturing or for core products for companies. If you are an ecommerce business with a standard product that your company assembles and re-labels for private brands, a Matrix BOM would best serve your needs.
Choosing Our Manufacturing BOM Products
As you gear up toward smarter ecommerce practices, consider our Bill of Materials software. We want to be able to help you improve online merchant efficiencies through better product management. Start with our Bill of Materials for manufacturing to see how we can solve your business dilemmas.
At Ordoro, the use of a Bill of Materials acts as a workflow management tool for even the most complex fulfillment workflows. We have been working for more than a decade at solving small business concerns regarding automation and inventory management. See how we can use order processing workflow with our manufacturing BOM software today!
With our manufacturing workflow, you will be able to increase gains on your inventory through BOMs and MOs. Find out what else Ordoro has in store for your sales and product management software. Contact Ordoro to request information on how to create a Bill of Materials or manufacturing order (MO) for your ecommerce business.
