Section 2 BOM)

. Glossary
1. Bom (Bill of Material)

A bill of materials describes the components of a finished product, including the raw materials or semi-finished products, and the combination process between them. For example, finished product A is composed of two raw materials B and one semi-finished product C, while semi-finished product C is composed of two raw materials D and three raw materials E.
According to its composition, A is the mother of B and C, B and C are the child of a, and C is the mother of D and E, D and E are child parts of C.
If there is no parent component on top of a, a can be called the finished product. C is a self-made or outsourced semi-finished product. B, D, and E are the purchased parts. The purchased parts cannot be the parent parts.
The upper and lower relations of a to B, C, or C to D and E are called Single Order. For the entire structure, the upper and lower levels are called multi-level or full-level.
2. Consumption Rate and output rate

For the parent component, the relationship between the loss rate and the output rate is as follows: the output rate = (1-the loss rate) × 100%.
For example, X in Unit 1 is composed of Y in Unit 2 and Z in Unit 3. If the loss rate of X is 2%, the loss rate of Y and Z is 5% and 3% respectively. If we need 100 units of X now, it is enough to produce 100 units of x (1-0.02) = 102.04 units. To produce 102.04 units of X, we need to invest:
Y: 214.28 unit = 102.04 × (1 + 0.05) × 2
Z: 315.30 unit = 102.04x(1 + 0.03) x 3
3. Batch Structure

In the conventional mode, the item list is based on one parent component, and the consumption relationship of each sub-component is established. As shown in:
1 unit G is composed of 2.03 units H and 1.005 units K. In many industries, if a list is set up in units of 1 mother piece, the usage of its sub-pieces may take many decimal places to express, which is often difficult, the batch structure solves this problem. For example, if the batch size of the G structure is set to 100, the H usage should be 203 when the structure is created, and the K usage is 100.5.
Example: Suppose we want to manufacture 50 units of G, then how many quantities of H and K should be required?
50
H demand = 00000000* 203 = 101.5
100
50
K demand = limit x 100.5 = 50.25
100
4. Virtual parts
Virtual ware assistance:
(1) As a shared item, the material list is easier to maintain, reducing the amount of data or the computer operating time.
(2) used as the planned materials number for prediction and planning.
(3) As a transitional material in the process, only for display, do not enter the warehouse, do not report the amount of work.
For example, for a product, there are many sub-parts in the shared part. You can combine the sub-parts in the shared part into a virtual part and compile the code of the output product. You only need to create a bill of materials first, virtual parts can be used for such products, and different parts of the material can be attached and defined one by one. Example:

X is a virtual part, that is, the sharing part of A_1, A2, and A3.
5. feature or optional parts
When features or options are included in the Child parts of each item:
(1) create virtual parts for production and sales planning
The child parts of the product are divided into the main components and other types of accessories, each with a variety of different child parts specifications. Only when receiving a ticket (beforehand) Can we know the correct combination. The preparation time is longer than the actual delivery time. We must predict the requirements of the main components and accessories, procurement, manufacturing, and outsourced processing can meet the customer's requirements.
This need can be solved by means of coexistence of virtual parts, feature parts, and selected parts. When planning the sub-parts demand, you can calculate the supply plan of various characteristic parts and selected parts based on virtual parts in the production/Sales schedule (MPS) and material demand (MRP) planning. Use virtual parts to define appropriate combinations of main materials, feature parts, and selected parts for sales prediction. For example, if

X is a virtual component, a1, a2 is the main component, A1, A2, A3, B1, B2 is the feature component or the selected component, the actual delivery of the product for a variety of combinations, such:

The amount of materials used for each sub-component of the virtual component is calculated based on the ratio of previous production experience, and the appropriate future use value is predicted for the planning of the main components and accessories.
As long as there is a demand for sales prediction X, the sales department can calculate the supply plan of each material. After receiving the ticket, we will provide suggestions such as the promised quantity, procurement, outsourcing, and self-control according to the actual supply conditions at that time.
(2) Set products for sale order
When different materials are prepared for a product with the same item number based on the customer's sales order, the materials must be specified after receiving the order, and manufactured based on the specified content and amount. For example, if it is defined in the bill of materials table

A is the product, B, c is the main material, A1, A2, A3 is the characteristic component (must be used, there are a variety of optional, must choose one); B1, B2 is the selected component (available, optional ). There are multiple combinations of actual delivery products, such:

When receiving a ticket, enter the demand and time of a according to each sales order. In the sales order management system, specify the actual content and amount of materials required by each sales order. You can also automatically generate a locked production order and generate a production order table based on the specified materials and quantity. When MRP and MPs are automatically planned, the supply plan is planned based on the materials specified in the sales order to ensure that the materials are correct.
2. Independent and dependent demands
For example, there is a bill of materials:
A

B (1) C (1)
D (2)
Product A is composed of one B and one C, and product B is made of two D. B has 50 Inventories and D has 20 inventories. Q: How many raw materials D should be purchased when product A receives 80 orders?
(1) traditional solution:
Because a uses 2 D, 80 A instances are produced, and D 80x2-20 = 140 instances are required. Is the result correct? If there is no semi-finished product inventory B, it is correct.
(2) modern solutions:
80 A must be made B 80x1-50 = 30;
30 B needs to purchase d 30x2-20 = 40.
(3) Traditional solutions waste 100 more than modern ones!
In 1965, Professor orlicky suggested two types of requirements in the manufacturing industry: Independent requirement and dependent requirement ).
Independent demand refers to the demand for finished products or components that are irrelevant to the requirements of other materials in the company's inventory. This independent requirement is characterized by the customer's ordering of finished products, intermediaries or service parts, such as product A in the above bill of materials.
Dependency requirement refers to any requirement of the item directly determined by the schedule for producing a parent or other accompanying item. Dependency requirements are typically raw materials, purchased or self-made parts, and self-made sub-assembly parts, accessories, and accessories, such as the items B, C, and D in the above material list.
In fact, it is not difficult to find that most of the materials in the factory are dependent, that is, the demand for materials can be calculated by the demand for products. When the market demand of products changes, the inventory of all unused materials is "zero", which is truly "safe", and the quantity of required materials is, it should be calculated based on the product demand and product material list layer by layer, otherwise the phenomenon of excessive inventory is extremely difficult to avoid.
The concept of dependency demand leads to the practice of listing materials in production management practices to deal with the "dynamic" relationship of each item in quantity; according to the customer's order or forecast demand (I .e. independent demand), the method of calculating the net demand of each item by the material list layer by layer has formed the most basic MRP skill.
Iii. Purpose of the bill of materials
1. cost Calculation: if the procurement cost of each purchased item and the labor cost of each finished product are summarized layer by layer according to the BOM structure, that is, the "direct manufacturing cost" of finished products and their semi-finished products can be obtained. If the manufacturing cost is included in the layer-by-layer calculation, the "Total manufacturing cost" of finished products can be obtained 」, we call this cost number "rolled-up cost )」.
The stacked cost is similar to the standard cost and mainly used for internal management. For example, we can use it to simulate:
(1) Impact of material changes (design changes) on product costs;
(2) Impact of changes in labor costs on product costs;
(3) Impact of non-renewal on product costs;
(4) the standard cost of new products should be used as a reference for formulating prices.
2. Basis for material demand planning (MRP) expansion.
3. basis for receiving and distributing materials from production orders and outsourcing orders: during the review of production orders or outsourcing orders, the computer system can automatically generate picking or distributing Details through the product BOM to save operation time, at the same time, avoid errors that may occur easily in manual jobs.
4. maintenance Management: If the correspondence between the production equipment and its parts used for maintenance is established in BOM mode, the parent component (where-use) is checked by the sub-component) "function, or the" anti-tracing (pegging) "function, allows you to query the devices used for maintenance at any time, however, it is easier to establish an appropriate stock of spare parts.
5. planning BOM: some products have features or options, for example, how much hard disk to use when purchasing a computer, whether to use a optical drive, a mouse, and a color display... Is the choice of product "Features" or "optional" for customers to choose when purchasing. We can establish feature parts and selected parts in the product BOM to form a "planning BOM" for the sales department to receive orders, configure the product structure as required to simplify and accelerate the planning of the supply.
Iv. Key Points of BOM Management
1. Accuracy of the bill of materials
When inputting a material list, you should first batch the parent parts, and then establish the basic usage and loss rate of each sub-parts. If any errors or changes are found, it should be modified as soon as possible. A correct material list can be used as a basis for production orders and outsourced materials. Otherwise, many material sending errors may occur, causing serious consequences. Especially before and after the design change, special attention should be paid to reviewing the materials used in various production orders and the booking content of outsourced materials to avoid errors.
The material list of each item is incorrect, which is a common phenomenon in most enterprises. This will cause the supply content and quantity not meeting the requirements, and the planning of MRP and MPs will be incorrect, the loss is huge. Printing and checking should be made at any time to ensure the correctness of the materials list.
2. design changes to the bill of materials
During the design change, the changes to the material list should be completed before the new production orders and outsourcing orders (according to the new bill of materials) are reviewed, so as to avoid bringing out the original materials. If incorrect materials are provided during the design change period, the materials in the production order and outsourced materials should be modified.
The validity period function can help you manage the material replacement process. You can set the validity period (expiration date) for the original sub-parts, for example, until, and set the validity period for the new sub-parts, for example, from 2002/07/01. From, new sub-parts are used as the standard for sales orders, production orders, outsourcing orders, purchase orders, MRP, MPs, and so on.
Before the atomic parts are used up, you can modify the exclusive special materials for each production order and outsourcing order to adjust the usage and make full use of the appropriate sales order.
3. Design of the bill of materials
The materials list contains the materials content, processing sequence, and quantity. Semi-finished products in all processes, as long as they are:
(1) will enter the warehouse and the quantity needs to be checked regularly;
(2) count the quantity in the system or sell it to the customer (the foreign merchant or supplier purchased is also the customer );
(3) The codes of materials to be outsourced for external processing and to be imported into and out of the factory should be prepared, and the materials should be: the cost should be calculated, materials should be prepared based on the sales order or Production Plan (production order, outsourcing), and the demand should be predicted. The MRP and MPs of each item included in the material list plan the demand based on each time point, and supply the demand exactly at the time to ensure that the customer's sales order can be delivered on time, without overstocked inventory. Materials not included in the material list should be less important, easy to purchase, and low unit price materials.
5. system functions and operation procedures of the bill of materials
The following uses the ufida erp system as an example to describe the basic functions and operation processes of the material list module.
1. system functions of the bill of materials
When a bill of materials is set up for the first time, the quantity and loss rate of all its sub-parts can be set up in batches based on the structure of the parent parts.
When a bill of materials is created, the validity period of the item can be set based on the sub-item, which serves as the basis for the selection of production orders and outsourced materials. It also serves as the basis for the expansion of MRP and MPs. All invalid (expired or not expired) Sub-parts are not considered.
The copy function of the bill of materials is provided. When similar finished item lists are created, data input time can be saved.
The whole batch replacement and whole batch deletion operations of Full-structure materials are provided to facilitate quick changes to the list of all materials.
Users can choose to establish the output rate of finished products or the loss rate of component materials based on actual needs. Either of them can be selected.
Multi-order or single-order mode is provided. query or report based on the material list of the parent component.
Provides multi-order or single-order methods to trace and query, or report, based on the parent part's material list of the Child part.
You can make a summary query and report on the bill of materials. That is, the materials used for the same materials of each class are added, and the content and quantity of all materials are displayed.
Calculate the cost of each parent component based on the Loss Rate and usage of the material list.
Automatically detects the created bill of materials for logical errors. As a child, it becomes a parent.
Check whether all the component items in the material list are in the basic materials.
You can set up the structure batch of the parent component. The amount of child parts input in the material list is based on the reference quantity of one unit parent component or one hundred thousand units parent component, the usage of the child is calculated based on the reference volume.
Bom representation: Single-order, multi-order, order-column, and summary.
2. Operation Process of the bill of materials