BOM stands for Bill of Material. This is the minimum quantity of all Raw Materials required separately for producing unit quantity of the product. BOM helps planning department in Raw Material procurement

How BOM helps in Planning

• Sales department has future Sale Orders to be manufactured
• Planning division has minimum quantity required for producing the products.
• Inventory stock has details about available stock required for manufacturing the product
• Purchase department has information about orders of required material in pipe line.
• Planning department collects data from Sales and purchase departments
• Planning department collects data for stage wise wastage from production departments and calculate net impact on production for those Raw Materials
• Planning department calculate total Raw material required as

Requirement = BOM quantity – Inventory quantity – Pipeline quantity – Quantity pending for stocking + waste quantity

What BOM contains

• Finish Good Name and Party Code
• List of Items required to produce the Finish Good that contains
• Item Code
• Item Name
• Unit of Measurement
• Quantity required
• Drawing No (If any)
• Catalogue no (if any)
• Supplier Code (If specific)
• Weight (If any)
• Rating (If any) – Electrical / Electronic material like Capacitor , Induction coil, register, fan etc
• Current
• Voltage
• AC / DC
• RPM
• Dimensions (if any)
• Length
• Width
• Height

If effective material planning is being done based on BOM and related analysis, organizations can save a very decent amount of fund that can be used in segments.