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How to understand the concept and importance, many novices are not very clear about this, in order to help you solve this problem, the following small series will explain in detail for everyone, people who have this need can learn, I hope you can gain something.

Bill of Material (BOM) is a detailed record of all the lower-level materials and related attributes used by an item, that is, the subordinate relationship between the parent and all the children, the unit consumption and other attributes. In some systems it is called a list of materials or a recipe list. In order to calculate the quantity and time of material requirement correctly in ERP system, there must be an accurate and complete product structure table to reflect the quantity and subordinate relationship of production products and their components. Among all the data, the bill of materials has the largest influence surface, and the accuracy requirements for it are also quite high.

BOM Concept and Importance

BOM is an indispensable document for receiving customer orders, selecting assembly, calculating cumulative lead time, preparing production and purchase plans, supporting material picking, tracking logistics, tracing tasks, calculating costs and changing cost design. The above work involves sales, planning, production, supply, cost, design and process departments of the enterprise. Therefore, there is also this saying, BOM is not only a technical document, but also a management document, is the link between contact and communication departments, all departments of the enterprise must use BOM.

Bill of materials fully reflects data sharing and integration. It is the framework that constitutes ERP system. It must be highly accurate and appropriate."

Therefore, in order to make ERP run well, enterprises must have a sound and mature mechanism to maintain BOM establishment and change. From another point of view, good management of BOM changes is more important than BOM filing management, because it is a dynamic management.

The basic characteristics of ERP are: arranging material supply and production planning according to demand and forecast, proposing what is needed, when and how much is needed. ERP method management objects are mainly related to the manufacturing needs of the material, so the basic content of the product database should be included in the main file (Item) and product structure list (BOM). According to the master production plan and BOM, the gross demand for all levels of materials can be calculated, and the dynamic net demand for materials can be calculated by considering the existing inventory and the in-process quantity, which generates the material requirement plan ERP according to the production schedule requirements. ERP is only a kind of instruction plan, in order to ensure the realization of ERP, we need to consider the implementation and control of the plan, so it develops into manufacturing resource planning ERP, in which the important content is workshop operation planning and control.

Therefore, BOM is the basis for ERP system operation, and the breadth and depth of ERP implementation depends on the coverage and data content of BOM. The establishment of BOM, especially the timely entry of new product BOM, becomes the bottleneck restricting the successful operation of ERP.

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