Structure of Bills of Material

Bills of Material are the core of all manufacturing systems; without them you are just like children trying to replicate their grandmother's un-written recipes (" a pinch of salt, stir for a while, etc.). Accurate material bills allow you to replicate products, know your true cost and plan production. To be effective they must include labor as well a material and waste (material yield) must be tied to labor operations.

The diagram illustrates a bill of material for product A. Product A is made of assembly B, components C and D, and material E. Assembly B is made from components F, G, and H (as well as other assemblies or products). Note that a component can be made from another component (item D), or a component can be made from raw material (item C and H).

Purchased parts are normally identified as materials (items E, F, and G) but can be any product, assembly or component that depending on workload you choose to buy-out or manufacture. (SIM*plicity automatically processes these buy-out items including pricing based on the selected "options and features".)

Concepts and Terminology:

· Product — An item sold directly to customers (products are listed in the Company catalog).

· Assembly - A part that is made of two or more other parts and associated labor. The parts, in turn, may be other assemblies, components, materials or products.

· Component - A part that is made on the shop floor (also defined as material on which labor has been performed). Some companies use the terms Assemblies and Components interchangeably in their discussions of Bills of Material structure. Defining them separately is preferable.

· Material - The type and size of raw material from which a part is made, such as 3/4x48x120 particle board or 6-inch brass railing, or a purchased part. Material is always purchased.

· Routing (or Traveler) - A document that lists the operations required to make a part, including the work center or work cell where each operation is performed.

· Labor operation - A description of the work to be performed at a machine or work cell in the manufacture of a part.

· Static (fixed) bill - A bill of material for a part that is normally made from the same components, labor and raw materials; Typically, you would create a static bill of material for standard assemblies, components, and engineer-to-order customer orders.

· Dynamic (parametric) bill - A bill of material for a product or part for which size, color, laminate, and other options can be selected. Your choice of size or option can effect lower level components and labor as well as control the selection and/or exclusion of operations and components

· Build - A task you perform (if you have supervisor privileges) to update the dynamic bill of material files after you create a new dynamic bill.

· Single level bill of material - A bill of material that lists the materials, parts and labor required to make another part.

· Multilevel bill of material - A bill of material that lists the components, assemblies, and materials required to make a part, the components, assemblies, and materials required to make each component and assembly of the part, and so forth. A multilevel bill of material shows every part and raw material required to make an item, from purchased raw materials through finished assembly or product.

· Indented bill of material - A multilevel bill of material in outline format, which identifies the components of the parent at one level, the components of the components at the next level, and so forth. Synonym multilevel bill of material.

· Work center - A group of work cells or a work area that performs a specific type of work, such as assembly or kiln drying.

· Work cell - A group of machines or a work area at which a specific function is performed. For example, the Assembly work center could includes the Assemble/Pack, Table Assemble/Pack, and Chair Assemble/Pack work cells.

· Equipment (machine) - An individual machine or item of equipment at a specified location in the manufacturing facility.

Features that help your company	Examples from SIMplicity*	Discussion and Features
Customer Orders
	Order Entry Overview	<<< Please read this introductory overview first.
	Customer Details: shipping information, history, etc.	The utmost in options and feature controls. Automatic pricing with more than 400 variables (size, color, add-on's etc.) Simple to set-up and easy to use. More than an "Order Configurator": these variables interact with dynamic (parametric) bills of materials to create complete manufacturing documentation.
	Item Details	Options to enter and display product information.
	Order Entry Tools	Because we automatically transfer all pricing variables and "engineering limits" to Order Entry, SIM*plicity eliminates the typical delay for orders to first go to Engineering and Pricing prior to Order Entry.
	Batch Order Entry	Input Customer Order details directly from Excel.
	Order-Project Costing	Display actual costs during Order Entry or during "material takeoff" -Quotations.
	Order Progress (status)	Graphics display with real-time visibility of all in-process orders.
	Product Entry Instructions	Guidance to the operator in entering complex items .
	New Product Entry	Add new customers and products on the fly.
	Zip and Postal Code Tutorial	Factors in entering address data for uniformity and to ensure automatic freight calculation
	Sales Discounts and Commissions	Information on entering discounts and sales commissions.
	SPEED-UP	Tips to increase order entry productivity.
	Invoice Details - Setting Variables Order Entry Display Variables	Variables for printing (and exporting to accounting software) invoices Order Entry variables for display and printing
	Deposits and Payments	Record and display deposits and partial payments
MRP2/ERP Planning and Shop Floor Control	Advance Plan	Customer and factory (internal) orders create inventory and labor demand for specific days. SIM*plicity schedules individual machines within each work station/cell and generates material requisitions.
	Workstation Control	Planners can control and balance workload at every machine.
	Production Planner/Scheduler	Shifting production (date or workcenter) automatically updates all related processes. Graphics displays with drill-down" information effectively links Planning to Shop Floor Control.
	MRP2/ERP Tutorial	Workstation Control allows supervisors to fine tune schedules and report production.
Purchasing and Inventory Control	Requisition/Purchasing	New orders automatically updates long-term material plans. Shop floor control module interacts with purchasing to automatically flag needs that won't be met and adjusts schedules accordingly. Buy-out items are purchased as soon as customer order is processed - including automatic pricing of options and features.
	Inventory Details	Knowing the materials "on hand" and what they cost is not enough! SIM*plicity calculates the exact date needed, where it should be stored and details of its physical characteristics.
	Vendor Information	Access complete contact information on vendors and their employees.
	Purchasing Messages Inventory Adjustments	Adding Standard and Text Messages to an individual item Requisition or to an entire Purchase Order Tools to record and adjust physical invnetories.
Accounting and Cost Control	Product Cost Summary Options & Features Overview Order/Project Costing	Know the true cost of every item that you build! Automatically calculate the cost of "work -in-process" inventory. Instantly estimate the complete cost of every Order and Quotation. Change an option or feature and the cost is automatically updated! Please also read ABC Cost Control
Product Engineering	Bill of Material Flow Chart Dynamic Bills of Material Static Bill Display Glossary	Bills of Materials are the core of true manufacturing systems. They link together customer orders, manufacturing instructions with material and labor requirements. Dynamic (parametric) Bills of Material are used for entire families of products eliminating the need at most companies for 90% of individual Bills of Material. However, Static (Conventional) Bills of Material are still valuable and our system incorporates them with a full range of Options and Features
Plan and Perform	Project Takeoff Project and/or Product Estimate	Estimate and control complex projects.
Sales Management	Sales by Customer and Product Line Marketing Program Formats	Cost of Goods Sold report for every order. Volume and margin reports for each sales rep. For each customer select default discount programs, special product discounts and choose from multiple selling companies (OEM, etc.)
SUPPORT	Getting Started FAQ's - SIM*plicity Support Why Systems Fail Favorite Story	Training, customization and 24/7 real-time support by the developers of this software. A commitment to excellence - today, tomorrow and for the past 30 years.