Accuracy is a must in manufacturing and production processes. A well-developed Bill of Materials (BOM) can make the difference between success and failure for you because it shows all the raw materials and components that are required to assemble the final products. NetSuite ERP has an effective BOM management solution. If you master the features of the NetSuite Bill of Materials, it will allow you to simplify production, improve inventory control, and provide insights about your manufacturing process.
What Is a Bill of Materials (BOM)?
A bill of materials (BOM) is an organized, comprehensive list of all the materials, components, and other parts needed to manufacture or fix something, along with the quantities required, the names of items, and their costs. It also includes ways to obtain these materials. Because of the breadth and depth of data in its content, a BOM holds all records regarding materials, assemblies, or sub-assemblies employed in developing a product.
The completion of the bill of materials represents an important stage in the production process. The accuracy of the BOM record is crucial for various manufacturing supply chain processes, including production planning, material requirement planning, and inventory planning. The bill contains parts/items/assemblies/etc. that are needed to build one unit/product.
A bill of materials includes instructions for obtaining and using the materials. Because of its breadth and depth of information can be used as a central record of the materials, components, and procedures required to make a product.
You can enable the NetSuite Advanced Bill of Materials by following these steps:
- Go to Setup > Company > Enable Features.
- Click the Inventory & Items subtab.
- In the Inventory section, check the Advanced Bill of Materials box.
- In the warning box, click OK.
- Click Save.
Display of NetSuite Bill of Materials
Explosion Display
In an explosion display, the BOM begins at the top with the highest product level, such as a computer motherboard. The product is then broken down into increasingly granular components and parts.
Implosion Display
An implosion display is the opposite of an explosion display. It begins with distinct elements and connects them to generate a larger product or assembly.
Why Use NetSuite Bill of Materials?
BOMs enable more efficient and accurate manufacturing. Before production begins, an organization can verify whether it has all the ingredients and components needed to manufacture a product and move on with little chance of delays. This decreases the likelihood of material or component shortages and overages. BOMs assist manufacturers in staying within budget and on schedule by ensuring that the proper parts and materials are available at the right time and in the correct amounts.
Companies that deal with contract manufacturers and provide them with a BOM can be more confident that the finished product will meet their requirements. In contrast, proceeding without a BOM raises the possibility of costly and time-consuming mistakes. These include material shortages or overages, downtime during assembly, and additional expediting charges to compensate for earlier delays.
What are the Features of the NetSuite Bill of Materials?
Real-time Data & Analytics
NetSuite Bill of Materials (BOM) provides real-time data and analytics, enabling you to make decisions nearly quickly. It allows producers to obtain real-time information on inventory levels, manufacturing status, and material requirements, reducing delays and mistakes.
Centralized BOM Creation & Management
NetSuite is a centralized platform for developing and managing your products’ BOMs. You can specify the exact quantities of raw materials, components, and subassemblies needed for each finished product. This centralized solution provides uniformity and reduces errors when employing distributed spreadsheets or manual processes.
Customization & Flexibility
NetSuite’s Bill of Materials (BOM) is highly adaptable and flexible. It enables manufacturers to modify the BOM to their requirements to handle numerous product configurations, which is critical for firms that require regular BOM modifications owing to changing product designs or market demands.
Multi-level BOM Support
Complex products may include numerous tiers of components. The BOM functionality in NetSuite handles these complexities seamlessly. You can develop multi-level BOMs, which allow subassemblies from one BOM to be used as components in another. This stacked structure creates a comprehensive image of the entire production hierarchy, making detecting possible bottlenecks or cost-cutting opportunities easier.
Revision & Version Control
BOMs must grow alongside product designs. NetSuite’s revision and version control tools enable you to track BOM changes. You can build fresh revisions of a BOM while keeping track of prior versions. This functionality allows for easy rollbacks if necessary and guarantees that everyone participating in the production process works with the most recent information.
Component Inquiry & Cost Roll-ups
NetSuite enables rapid and efficient questions about any component on a BOM. You can easily determine the required amount, lead time, and current inventory levels. Real-time access to information allows for more educated purchase and production scheduling decisions. Furthermore, NetSuite enables you to combine component costs to get a clear image of the entire production cost associated with each finished product. This cost transparency enables better pricing strategies and identifies areas for potential cost savings.
Integration with Manufacturing Routings
NetSuite effortlessly integrates BOMs and manufacturing routings. A manufacturing routing specifies the stages and processes required to assemble a product. This connection ensures that BOM components are available at all stages of the manufacturing process, reducing delays and optimizing production flow.
Industry-specific BOM Functionalities
NetSuite understands that different sectors may have unique BOM requirements. To meet these distinct requirements, the platform includes industry-specific features. Manufacturers of configurable items, for example, can use features such as phantom bills to represent alternative product configurations without describing exact components.
What are the Two Structures of NetSuite BOM?
Single-level BOM
In a single-level BOM, each component comprising the product or asset is displayed once, along with the quantity required. It is similar to a shopping list. Single-level BOMs are simple to prepare but do not depict the links between the assemblies, subassemblies, and components utilized to build a product. When a product malfunctions, it might be challenging to determine which component needs repair or replacement.
For example, suppose a vehicle’s BOM is created in a single-level format. It later becomes evident that the vehicle’s door handle is defective. The single-level BOM makes no distinction between items used in the handle and those used in other vehicle parts. For this reason, single-level BOMs are employed for simpler assemblies.
Multi-level BOM
In contrast to a single-level bill of materials, a multi-level BOM depicts the relationship (also known as parent-child) between components, sub-assemblies, and assemblies. It often accomplishes this by indenting the materials and/or subassemblies that comprise the higher-level part or assembly. Multi-level BOMs are also known as indented BOMs.
A sub-assembly may contain numerous components. Changes made to the assembly (or parent) are carried over to the subassembly (or child). Most complicated products employ multi-level BOMs to demonstrate these relationships.
What is NetSuite Bill of Material Service Items?
A bill of materials is a design for manufacturing a product or assembly component. It comprises all ingredients, components, and methods used to manufacture the product in a single BOM. The bulk of BOMs are arranged in a hierarchy. The finished product is at the top, followed by subassemblies, and finally, the components and materials used to manufacture the product. This includes information such as part names, numbers, and descriptions. While the concept of a BOM is straightforward, creating and tracking bills of materials, particularly for new BOMs with component products that require several components, can be complex.
NetSuite BOM increases production efficiency and precision. By identifying and pricing all of the materials and components needed to make a product, an organization can determine whether it has all it needs to proceed with little risk of delay. This reduces the likelihood of material or component shortages or oversupply. Companies who work with contract manufacturers and provide them with a bill of materials generated by NetSuite might be more confident that the finished product will meet their requirements.
How to Create and Use BOMs
Depending on the industry, designers or engineers, as well as purchasing, scheduling, and planning personnel, will want to check them to verify correctness – an accurate BOM serves as a road map for finished items, freeing up resources to focus on the actual production process. Creating an accurate and valuable bill of materials involves several procedures, including:
Fill Data to Include
For example, will the BOM include consumables such as glue or wire? While it may appear redundant, having these items in the BOM from the start ensures they are available when needed.
Centralize Control of BOM
In many organizations, various departments or roles employ distinct information systems. To remain accurate and up to date, the BOM will need to compile data from all of these systems into a single record.
Determine Editors of BOM
The number of editors should be minimized to reduce the likelihood of errors.
Determine Revision Tracking of BOM
Many BOMs are constantly updated. All modifications must be logged for the BOM to continue to provide value and be correct. Ensure that all changes can be traced back to the authors.
Choose BOM Presentation
Choose a single or multi-level structure, whichever suits the product.
Start Listing
The materials, components, and parts that will comprise the final product. This list will expand and evolve over time.
Refine List
Keep track of all changes.
The Benefits of BOMs
With so many moving pieces, manufacturing businesses require all the assistance they can get. Keeping track of many components, from subassemblies to costs, can be difficult. NetSuite’s BOM module provides extensive support for manufacturing processes, allowing manufacturers to spend all their efforts creating and maintaining goods. Here’s a closer look at how it simplifies things:
Accuracy & Efficiency
Implementing NetSuite Bill of Materials (BOM) increases the accuracy and efficiency of your production processes. By automating BOM management, NetSuite lowers the chance of human error while maintaining quality standards and meeting production schedules.
Cost Reduction & Better Management
NetSuite Bill of Materials (BOM) also lowers production costs. Thorough information on material usage and manufacturing costs makes it easier to detect inefficiencies and waste areas, resulting in significant savings.
Better Collaboration
Implementing the NetSuite Bill of Materials (BOM) promotes cross-departmental collaboration. Departments such as procurement, production, and finance may quickly access and share data to assure alignment, resulting in a more unified manufacturing process.
Key Takeaways
- NetSuite Bill of Materials (BOM) is critical in manufacturing to ensure production accuracy, material requirement planning, and inventory management.
- The BOM is a primary record required for product manufacturing that demonstrates the depth of data captured.
- NetSuite’s robust manufacturing module helps you establish manufacturing workflows for compliance with ERP deployment best practices.
- NetSuite Quality Management improves product quality by minimizing manual labor. Alignment with ERP deployment best practices leads to increased efficiency.
- Financial Management in NetSuite enhances accounting, costing, and payment management, critical components of a successful ERP system.
- NetSuite’s Production Control improves work order management and product quality.
- NetSuite’s Order Management module streamlines order processing while incorporating ERP implementation best practices for a more streamlined operation.
- Accurate and automated BOMs in NetSuite lessen the risk of delays and material shortages, demonstrating effective ERP implementation tactics.
If you want to maximize the chances of success of your company’s NetSuite implementation, consider bringing us on board to support your in-house team. Be confident because we have the expertise and experience for NetSuite integration with many clients.
You can contact us and check out our resources at Folio3.
