![]() Accurate forecasts and orderingĪutomated bill of materials forecasting will ensure that every component in the BOM has a forecast that takes into account the BOM’s demand, and any autonomous demand, ensuring accurate and up-to-date forecasts at all times. With BOM planning and forecasting automatically carried out by EazyStock, inventory management teams will be able to optimise their stock levels, whilst still ensuring they can achieve even the most challenging fulfilment targets. The benefits of automated BOM inventory management The forecasting screen below shows how items can have both independent and BOM dependent forecasts which are aggregated into a single forecast, ready for reordering parameters to be dynamically adjusted by the system. expected service levels (stock availability target).how many of each item is needed in the BOM.Items are clearly identifiable as finished assemblies, sub-assemblies or components.īy clicking on a finished assembly you can quickly see items that make-up the BOM and a wealth of data about each one, including: With demand forecasts in place, EazyStock will then automatically adjust ordering parameters such as safety stock levels, reorder points and order quantities for every item within the BOM. Luckily, inventory optimisation tools, such as EazyStock, have the functionality to help.īy connecting EazyStock to your ERP or MRP, it can calculate the demand forecasts for every item in a BOM, exploding them down from the finished item to the smallest nut and bolt. To overcome the complications of manually calculating bill of materials’ forecasts, stock management teams can digitalize this process. Then there are components that may require assembly with others to form a sub-assembly before they can be used within the final product.įinally, if you add the complications of seasonality and demand trends to the mix, suddenly a simple forecasting project becomes a complex nightmare. Other items may be used in more than one final product and, therefore, be members of more than one BOM. As we’ve already mentioned, some items may have demand that is BOM-dependent, whilst others could have both BOM-dependent and independent demand. Whilst mapping out a BOM can be fairly simple to do, BOM forecasting can be a very time-consuming and challenging task. This means inventory management teams find themselves using spreadsheets to create and manage their bill of materials forecasting. Whilst some MRPs and enterprise resource planning (ERP) systems have simple BOM capabilities, very few have BOM forecasting functionality.Įven the most sophisticated systems will rely on demand forecasts to be uploaded manually to then trigger reorder point calculations in the planning BOMs. BOM forecasting and planning with spreadsheets An example here could be when stationery items are sold in a writing set, but also sold on their own. This is when items are also used or sold independently of the finished good. Sometimes the demand forecasts for BOM components are made up of the BOM-dependent forecast and an independent forecast. An example of a BOM-dependent forecast would be for the components that make up a biro or fountain pen. Without a demand for the finished item, they would have no demand of their own. Sometimes the forecasts for BOM components are totally dependent upon the finished item, because they are only used in the making of the final good. If you know the demand of a finished product, then it’s possible to explode out the forecasting requirements for all other components within its BOM. Forecasting for bill of materials inventoryĪ BOM structures items in a hierarchy with the finished product at the top and ‘child parts’ below it. ![]() This prevents delays to production, servicing and sales fulfilment. ![]() In all cases, the BOM structure describes the connection between the finished item and the components required to build, assemble or repair it.īOMs are extremely important for inventory management teams as they allow them to forecast and order the correct quantities of each component required to make-up the final product. When finished goods are built from a set of components, a Bill of Materials (BOM) is extremely useful for inventory management purposes. A bill of materials is most often associated with production planning in manufacturing, being used in manufacturing software, such as materials resource planning systems (MRPs).īOMs are also very useful when multiple components are used in the assembly of final items for sale, or for servicing equipment and machinery.
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