Category Archives: Manufacturing

Phantom Bill of Material

A phantom BOM is a BOM used for non-stocked subassemblies. In Microsoft Dynamics NAV, a phantom BOM is a production BOM that is chosen on a production BOM line.

A phantom BOM represents a group of items that are put together immediately before being used in production. Instead of listing each of the items needed in the production BOM lines, users can choose the phantom BOM.  Phantom BOMs allow the MRP process to account for the components without having to create an Item card or a separate production order for the subassembly.  The time required for assembling a phantom BOM is considered to be zero or is accounted for in the master item’s routing.  Using phantom BOMs can also simplify the creation or review of production BOMs by listing the phantom BOM instead of each component.  Deciding whether a subassembly will be set up as a phantom BOM or an item is a matter of opinion, and the decision is usually made by the engineers or production managers.


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English: configurate technological structure o...


The Association for Operations Management defines a BOM as “a listing of all the sub-assemblies, intermediates, parts, and raw materials that go into making the parent assembly showing the quantities of each required to make an assembly”.

The BOM shows all the parts required to make one of the item.  Each part or an item has only one part number.  A specific number is unique to one part and is not assigned to any other part.  A part is defined by its form, fit, or function.  If any of these change then it is not the same part and it must have a different part number.

The BOM shows the components that go into making the parent.  It does not show the steps or process used to make the parent or the components.  That information is recorded in a Routing File.

Structure of BOM

Structure of BOM refers to the overall design for the arrangement of bills of material files.  There can be several formats, or ways, to present the bill.  Some of the important formats for bills are Product Tree and Parent Component Relationship.

Multilevel Bills

Multilevel Bills are formed as logical groupings of parts into subassemblies based on the way the product is assembled.  Each of these forms a logical group of components and parts and, in turn, has its own BOM.

One convention with multilevel BOM is that the last items on the tree are all purchased items.  Generally, a BOM is not complete until all branches of the product structure tree end in a purchased part.

Multiple Bill

A multiple bill is used when companies usually make more than one product, and the same components are often used in several products.  This is particularly true with families of products.  They are similar except the tops are different.

Single Level Bills

A single level bill of material contains only the parent and its immediate components, which is why it is called a single-level bill.

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Posted by on October 8, 2012 in ERP, Manufacturing


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WASTE in Manufacturing

Stop Waste Go Production - NARA - 533881

Stop Waste Go Production

The ideal product is one that meets or exceeds customer expectations, makes the best use of material, and can be manufactured with a minimum of waste.  As well as satisfying the customer, the product’s design determines both the basic manufacturing processes that have to be used and the cost and quality of the product.  The product should be designed so it can be made by the most productive process with the smallest number of operations, motions, and parts and included all of the features that are important to the customer.

Waste Caused in Manufacturing

The following seven important sources of waste in manufacturing have been identified.  The first relate to the manufacturing system and the last three to the operation and management of the systems”

  1. The Process:  The best process is the one that has the capability to consistently make the product with an absolute minimum of scrap, in the quantities needed, and with the least cost added.  Waste, or cost, is added to the process if the wrong type or size or machine is used, if the process is not being operated correctly, or if the wrong tools and fixtures are used.
  2. Method:  Waste is added it the methods of performing tasks by the operators cause wasted movements, time, or effort.  Activities that do not add value to the product should be eliminated.  Searching for tools, walking, or unnecessary motions are all examples of waste.
  3. Movement:  Moving and storing components adds cost but not value.  For example, goods received may be stored and then issued to production.  This requires labor to put away, find, and deliver to production.  Records must be kept in a storage system maintained.  Poorly planned layouts may make it necessary to move products over long distances, thus increasing the movement cost and possibly storage and record-keeping costs.
  4. Product Defects:  Defects interrupt the smooth flow of work.  If the scrap is not identified, the next workstation receiving it will waste time trying to use the defective parts or waiting for good material.  Schedules must be adjusted.  If the next step is the customer, then the cost may be even higher.  Sorting out or reworking defects are also waste.
  5. Waiting Time:  There are two kinds of waiting time: that of the operator and that of material.  If the operator has no productive work to do or there are delays in getting material or instructions, there will be waste.  Ideally, material passes from one work center to the next and is processed without waiting in queue.
  6. Overproduction:  Overproduction is producing products beyond those needed for immediate use.  When this occurs, raw material and labor are consumed for parts not needed, resulting in unnecessary inventories.  Considering the cost of carrying inventory, this can be very expensive.  Overproduction causes extra handling of material, extra planning and control effort, and quality problems.  Because of the extra inventory and work-in-progress, overproduction adds confusion, tends to bury problems in inventory, and often leads to producing components that are not needed instead of those that are.  Overproduction in not necessary as long as market demand is met.  Machines and operators do not always need to be fully utilized.
  7. Inventory:  Inventory costs money to carry, and excess inventory adds extra costs to the product.  However, there are other costs in carrying excess inventory.

To remain competitive, a manufacturing organization must produce better products at lower cost while responding quickly to the marketplace.

Courtsey:  Inventory Management Book from Pearson press

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Posted by on October 2, 2012 in ERP, Manufacturing