Essay on Bill of materials

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In Search of the Perfect
Bill of Materials (BoM)

NEMI

a white paper by

the NEMI Perfect BoM Team
March 2002

Connect with and Strengthen Your Supply Chain

Table of Contents
Executive Summary ..............................................................................3
Problem Statement ................................................................................4
Supporting Data ....................................................................................8
Cost to the Industry .......................................................................10
Solution Statement ..............................................................................12
Education.......................................................................................15
Recommendations ...............................................................................17
Glossary of Terms ...............................................................................18
References ...........................................................................................19
Appendices..........................................................................................20
A: Participating Companies
B: Recommended Framework
C: Sample PDX File

White paper: The Perfect BoM

Page 2 of 25

Executive Summary
OEMs turn to outsourcing to gain manufacturing efficiencies, but the efficiencies (and accompanying cost savings) they hope to achieve can be elusive. Some of the greatest obstacles are problems associated with bills of materials (BoMs). Supply chain interactions are seriously hindered by the lack of a standard data format for BoMs, unacceptably high error rates and a lack of technology and tools to validate BoMs. The problems are pervasive, and the consequences, far-reaching. The cycles required to clarify or correct data can directly affect time-to-market and time-to-volume. In 2001, the National Electronics Manufacturing Initiative (NEMI) organized a team of industry leaders (see Appendix A) to investigate and define the issues surrounding BoMs. This team is recommending a solution that calls for industry to adopt a common format with standardized contents — the “Perfect BoM" — to ensure that data is consistent, correct and complete, and that errors are resolved before exchanges are made among business partners. The team has identified the Product Data eXchange (PDX) specifications, developed by NEMI’s Virtual Factory
Information Interchange Project, as the foundation for the Perfect BoM. These specifications provide an industry-standard approach to exchanging BoM and change order information and will be used to define data structure. In addition, the team has developed a recommended list of data to define standard BoM content.
Implementation of the Perfect BoM will require a higher level of industry awareness and a commitment to standard solutions. The NEMI team’s action plan calls for an education effort to raise awareness of problems and proposed solutions in an effort to encourage rapid acceptance and implementation.
This paper discusses the problems and challenges that exist with today’s BoMs, and outlines
NEMI’s recommended solutions for creating and implementing the Perfect BoM.

White paper: The Perfect BoM

Page 3 of 25

Problem Statement
The bill of materials (BoM) is, in its simplest form, a list of parts or components required to build a product. It provides the manufacturer’s part number (MPN) and the quantity needed of each component. At its most complex, the BoM is a multi-level document that provides build data for multiple sub-assemblies (products within products) and includes — for each item — part number, approved manufacturers list (AML), mechanical characteristics and a whole range of component descriptors. It may also include attached reference files, such as part specifications,
CAD files and schematics.
Originally used internally within a company, the BoM served as a means of tracking product changes and
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