Paradigms for Bills of Material
What's new with bills of material? A lot of exciting things have been happening
with the bill of material structuring process. Many old paradigms have
been replaced and new ones created. Take a look at three examples ...
For decades, the bill of material was considered an engineering document.
But many departments and functional areas in the business use the bill
of material everyday. For example, planning functions use bills as a bridge
to link manufacturing schedules to individual material or part needs. Cost
accounting uses bills to calculate product costs. The plant floor uses
bills to determine what to pull to make the product. The list of bill of
material users or "internal customers" goes on and on. Who is affected
when the bill changes? Usually everyone! The old paradigm was often to
make the change in engineering and toss the new, revised bill over the
wall and leave everyone to fend for themselves!
thus the name Engineering Change Notice (ECN). In effect, engineering notified
everyone else the change had already been made! As a result, many departments
were forced to keep their own bill of material files -- a costly duplicate
effort. The new paradigm is to create a process where the impact on the
business is considered before the change is made. In fact, in some
cases the change may be so significant it may be determined to not make
the bill change.
from any functional area can ask to be informed before the change is made.
Among the considerations to go ahead with the change are safety of the
product, potential obsolete inventory, impact on current customer delivery
schedules, cost to make the change, tooling availability and many more.
Individuals are notified via email of the pending change and are given
a drop dead to respond to a bill of material administrator. Once all input
and impact of the change are considered, the disposition of old material
is determined and the timing of the change, the Bill of Material Change
Notice (BMCN) is distributed. As a result, the change is made with minimal
negative impact and cost.
Release vs. Launch Phase
The term "engineering release" is obsolete and should be replaced. The
old paradigm was for engineering to design a new product and during this
time the rest of the organization did not want to be bothered until it
was ready. In fact, manufacturing often would not act until the design
was finalized, even if engineering let them have a peek at what was coming.
Once engineering completed their work, an "engineering release," including
bills of material, was tossed over the wall to the other functional areas
to begin their work to produce, sell, plan and service the new product.
This approach created several problems, including long lead times to get
new products into customers' hands and costly redesigns and recalls!
revolutionary process was developed to make new product development faster
and more efficient. We call it MAP (Market Aimed Products). MAP incorporates
the concepts of concurrent engineering and much more. MAP is a series of
five phases and four go/no go gates. The fourth phase is the design phase.
During this phase the business processes to manufacture, market, sell,
distribute, train, plan and many more activities are concurrently designed
while the product is being designed. Documentation such as bills of material,
QC specs, drawings, etc are also created and used to build prototypes and
initial production run units.
the development team, consisting of more than engineering people, determines
the product and businesses processes are ready, the new product moves seamlessly
into the Launch Phase. During the Launch phase, the new product is made
available to the marketplace. The bills of material are already created
and tested by everyone who will use them prior to launch. Notice the entire
organization is involved, including manufacturing, as the product is designed.
The product is not designed in a vacuum and tossed over the wall or "released"
by engineering. The product and bills of material evolved concurrently
and were used in all functional areas.
is More ... Really!
How should we structure the bills? This is an often asked question. My
answer, "Flat." Permit me to make a general statement......"any bill of
material with more than 3 levels is probably overstructured". Of course,
their are always a few exceptions. However, if your bills have more than
3 levels, you probably have identified an opportunity to simplify the bill
structures and reduce maintenance costs. However, just removing levels
in the bills is not likely the first step.
has become an essential competitive weapon. This means very short lead
times. JIT or Lean manufacturing concepts are effectively used to strip
the lead times of unnecessary elements. As we look at manufacturing processes,
we often see a lot of wait or queue time that cause long lead times. In
many cases, levels in the bills of material were created to keep track
of this material and it sat and waited. As the manufacturing process is
"leaned," the material flows, not sits, and the need for the bill of material
level disappears. But the manufacturing process has to be changed in this
case before the bill can change.
essential rule: "The bill of material should reflect, not dictate, the
manufacturing process." Fix the process and simpler, shallow bills of material