6.

13 - The Bill of Materials [BOM]

Overview
The Bill of Materials [BOM] is one of the most important information resources in a manufacturing company. In its most basic form it
is simply a list of parts that go into making an end product. Complex products have more than one level in their BOM’s. The levels
represent that products are made from assemblies, sub assemblies, configuration modules, parts and raw materials. It is more than
a list of parts – it is a model that represents a very valuable real world object – the product – which is the source of company profit.

The importance of the product Bill of Material

In a modern manufacturing company most of the activity is driven from the product or part (item) and the components that are used
to make it. The Bill of Materials is used to:-

• Calculate the cost of a product

• Schedule component items for manufacture or assembly
• Order parts and raw materials from suppliers
• Layout the manufacturing and assembly operations in the factory.
• Produce the product service manuals and parts lists.
• Tell sales what products are available for customers.

World class manufacturer’s say that BOM accuracy must be 98% or better to enable them to conduct their business competitively.

Bill of Material Responsibilities

Work on creating the BOM begins with the product’s conceptual design when the engineer lays out the product’s main functions.
S/he will then develop solutions for each of the product’s functional characteristics each requiring either standard or specially
designed parts to fulfil the function.
When the engineers have put together the complete product definition, including manufacturing information, assembly operations
and process sequences the BOM is released for manufacture. When the product is shipped to the customer a form of the BOM is
available to him so the product can be supported throughout its service life.
The BOM is a dynamic representation of the product that defines how it is made and what is needed to support it in use. Therefore
most of a company’s departments contribute to, or make significant use of, the BOM in one form or another.
It is the responsibility of engineers to ensure that the definition of the product retains the level of accuracy appropriate to the
product and industry at all times. This is usually done via the BOM management modules of MRP or PLM software.

How the BOM is Represented in Software

To represent products in computer software two main information sources are required – the item (or parts) master file and the
BOM structure file. The item master file (or table) describes the individual items and the BOM file (or table) describes how the items
relate to one another to form the end product.
An example BOM structure is shown:-
The company has 2 end products A and K each made up of assemblies, sub-assemblies and parts.
The products are represented in the BOM software as shown below:-
A bill of materials system has a number of presentation view options that are useful to users. Components, by default, are
presented in part number sequence. By entering numbers in the Prefix field the components will be presented in prefix sequence –
this could be used to hold the balloon number, item number or find number from a drawing. The suffix can be used to hold a
reference designator as used on electronic assemblies for components – R1, R2, R3 etc. It can also be used for separate instances
of the same mechanical part.
3D CAD systems use a more complex form of the BOM which essentially holds the same part information with the addition of a
mathematical orientation matrix for each component in 3D space.

How product changes are handled

New parts are added to the Item Master table and changes are made to the BOM structure table under change management
controls that specify when the new parts are to be phased in and the old parts phased out. See guides 2.04 and 6.14.

BOM – The Cost of Non-Conformance

Bill of material problems are difficult to diagnose. When BOM’s are not accurate, it’s hard to make or buy the right items in the right
quantities at the right time. The effects translate into big problems for any company:-
Missed customer deliveries – You cannot service your customer if you cannot make and deliver the product.
Too Much Inventory – The fear that the only way to keep the production running is stockpiling materials, which means cash sitting
in the stores.
Inefficient Production – When the wrong items, or the wrong number of items, are delivered to the shop floor, production
stumbles and falters.
The Cost of doing business is too high – Extra money is being spent for unnecessary inventory; expeditors dashing about trying
to overcome shortages and get product out of the door; increased costs of maintaining both engineering and manufacturing bills.
Not the best way to do business!
Lack of teamwork and communication – Who wants to work hard for the team when some of the other team members are
idiots? They can’t even deliver the right material to run the equipment…!
Frustration and poor morale – People basically want to do a good job. They want to meet their targets, and they want their
company to be successful. Nothing is more frustrating than NOT having the right items to do the job. It doesn’t take many
frustrations like that to sour morale at a basically good company
Wasted resources – In business we have are five critical resources – people, materials, money, capacity, and the constraint of
time. These are all limited, so you have to use them carefully. Wasting capacity or wasting time is the same as wasting money.
You’ve squandered a portion of your shareholders assets.

BOM Quality Assurance

One of the basic steps toward making good use of company resources is careful structuring of the Bill of Material. A suggested bill
of materials policy for manufacturing excellence:-

• All end items, subassemblies and manufactured components must be identified with a part number and must have a
corresponding bill of material. For accurate costing, include raw materials & consumables.
• Bills of materials must be entered into the system within five working days of a part numbers assignment.
• All changes to bills of material must be documented via the engineering change policy
• Bill of material changes and additions will be audited as per the BOM administrator’s job description
• Bill of material accuracy must be maintained at 98% or better.
• Bill of material accuracy is to be audited by the tracking of unscheduled issues and receipts, random sampling of single
levels of bills of material, reviewing stores pick lists and by disassembling by Quality Assurance.

6.14 - When to Change a Part Number

In this guide, the word “part” is used, in its most general sense to mean any item, product, sub-assembly, component or raw
material.

The Problem
For identification and control purposes, any part that is ever stocked, shipped and /or scheduled needs to have a unique part
number. When making modifications to a part specification, engineers often do not know whether or not to assign a new part
number. Opinions differ not only in engineering but also in other departments of the company. The problem is compounded in some
companies where the part number is used for two separate functions:

• a) to identify the parts and

• b) to identify the drawings of the parts

Discussion
Since 1812, when rifles were first assembled from standardised parts, everyone has become increasingly familiar with the ability to
repair a product by replacing the faulty component with a component taken from a similar product. Part standardisation was an
important step in the progress of manufacturing. This familiarity has led to the popular belief that the replaced and the replacement
components are identical. This misunderstanding is not at all helpful when trying to solve the problem of if or when to change a part
number. For example:
“One part number must not identify two or more items that differ from each other, if ever so slightly”
Statements such as this show a fundamental lack of appreciation of the design process. When designing a part, a good engineer
will allow manufacturing as much flexibility as possible to produce a satisfactory part at minimum cost. The specification will
normally take the form of limits, within which manufacturing must operate, outside of which the engineer:

• a) is confident that the part will cease to physically interchangeable or

• b) estimates that the performance of the part will be inadequate

The specification limits needed to satisfy (b) are normally “tighter” than those needed to satisfy (a) e.g. two springs of similar
outside diameter and length are physically interchangeable but, if the wire diameter or material is different, only one may give the
desired performance. Just as no two people identical, no two parts ever made are identical. There are always slight differences,
within limits.
Other suggestions for solving the problem also put emphasis on the differences between parts:
“If the form, fit or function of a part is changed, it must have a new identifier a new part number”.
It is implied that differences in form, fit or function are distinct. In fact they tend not to be. Once the engineer has decided what type
of change the modification in question is, he is still left wondering whether the change of form, or fit, or function is significant
enough to justify allocating a new part number. For example, a 10% increase to the clearance between a shaft and a bearing is a
change of “fit”, but would not normally justify a new part number.

A Solution
It is proposed that the key to solving the problem is to analyse the similarities between parts, not the differences. Two parts
identified by the same part number must be sufficiently similar to:

• a) be physically interchangeable in the product AND

• b) both give adequate performance in all present and foreseeable applications.

The important point is that the performance of both the parts is adequate; they will never be the same. There will always be
differences. In a nutshell they should only have the same part number if they can be mixed in the stores (i.e. in the same stock bin).

What is Physical Inter-changeability?

It is important that both the replaced and replacement parts are interchangeable in all applications, if they are to be identified by the
same part number. A part that replaces another for only some, or can be used in more applications should not be considered as
interchangeable. The two parts must be identified by different part numbers. Physical inter-changeability is wholly determined by
the specified dimensions.

What is adequate Performance?

Adequate performance can be measured (or at least an opinion established) by either direct or indirect tests:-
 1) Direct Tests: a) ease or efficiency of operation of part in service or on endurance test rig.
b) life of part in service, or on endurance test rig.

2) Indirect Tests: a) Tensile Strength of part

b) Material Quality of part
c) other standard tests e.g. as specified by various standards bodies

Any of the tests can be carried out by the company, by any customer or any other body (usually at the company’s or customers’
request). Given the number of permutations of test and testers there obviously will be a wide range of opinion regarding what
performance is adequate for a particular part.
This is the reason that traditional (rigid) decision rules for changing part numbers do not work. It must be acknowledged that in
extreme cases, it is sometimes necessary to change a part because a particular customer firmly holds an unjustified opinion of the
performance of that part. If this is done, it will be necessary to schedule the new part for that customer and it is therefore essential
that the part number is also changed.

Replaced & Replacement Parts

Examples of
Engineering Changes
and Part Number
Decisions
Type of Change Physically Company Customer Same
Interchangeable Opinion: Both Opinion: Both Part
OK OK No

1) Inconsequential drawing error Yes Yes Yes Yes

corrected

2) Part original limits tighter than Yes Yes Yes Yes

necessary to give adequate
performance, therefore relaxed

3) Part performance adequate but Yes Yes Yes Yes

part changed to reduce cost of
manufacture

4) Part performance considered Yes Yes ??? NO

adequate by company, but it is
expected that at least one customer
will not agree. (i.e. Decision to
change because of risk of complaint)

5) Opinion differs within company Yes ??? Yes No

regarding performance change
required, but eventually decision is
made to change part.
 6) As consequence of customer Yes Yes No No
complaint, it is agreed to change the
part.

7) If anybody considers part Case Yes Yes No No

performance inadequate in 1
any test and change is
authorised
Case Yes No Yes No
2

Case Yes No No No
3

8) Part NOT physically No Yes or NO Yes or No

interchangeable in all present and No
foreseeable applications

Examples 4, 5 and 6 deliberately highlight some awkward situations where the engineer needs advice. In such circumstances, it is
the reason for the change – not the technicalities of the change – that determines whether or not to assign a new part number. It is
the responsibility of the Engineering Change co-ordinator to advise the engineer on this.
If it is decided to assign a new number to a part, it must then be decided whether or not to assign a new number to its parent. The
criteria for deciding this are exactly the same, at all levels in the Bill of Material structure.
Any change to the specification of a part has to be recorded on the drawing and therefore the drawing number should be changed.
This is normally achieved by adding a revision letter to the drawing identification. However if:
 • a) the change relates to inter-changeability or performance (as described above) and
• b) the part number and drawing number are the same

then it is necessary to change the whole number on the drawing. Any temptation not to change the part number as prescribed,
because of the inconvenience of changing the number on the drawing, must be resisted.

Handling Part and Drawing Number Changes

In manual systems each change is handled on a case by case basis, as described above (the information in this paper is from a
company procedure from the 1950’s and 60’s), with a number of work-arounds, being employed as expedience demands. (Nothing
new under the sun!)
The next table is presented to indicate some of the part numbering, issue, revision and document controls that must be formalised
(or NOT) when implementing computerised PLM systems.

All Applications

Development of a
Peg
Eng Change Standardize on Achieve Reduce M/C
Reason one peg adequate tool set up
performance time

Adequate Yes NO Yes Yes

performance?

Drawing(s)

Part Number W 12344 12345 12345 12345

Systems
X 12344-003 12345-000 12345-001 12345-002

Y 12344-003 12345-000 12346-000 12346-001

Z 122441 12345 12346 12346

 Drawing Same
Number as part
System No

Differs
from
part No

With computerised Product Life-cycle Management (PLM) change management must be formally controlled, but not to tightly, or
some of the reasons for implementing PLM will not be achieved. Of particular concern, are document control, configuration
management, traceability and product liability issues. Without proper attention the PLM installation benefits will fall far short of the
desired results.

6.15 - Materials Selection

Material Selection is a crucial step in the Product Design process. The materials selected to fulfil a required product performance characteristic
drives manufacturing process costs and consequently product costs. The scale of the task in selecting an appropriate material grows daily as
researchers add more new materials to the already huge choices available. There are somewhere in excess of 40,000 metallic substances to select
from. If we broaden the range to non-metals we have a total choice in excess of 100,000 materials. Once a material has been selected the
processing choices are limited to only those applicable to that material. For the cost conscious the viable options diminish even more. Engineers
rarely get the opportunity to send men in rockets to the moon with a 10 year time constraint and no cost constraints. Mostly they have
challenging Target Costs and significant time constraints.
Given that processing may also change the functional characteristics of a material (e.g. forging versus machining) the engineer must consider
materials, processing and desired performance in a simultaneous iterative process as shown below:-
Material characteristics offer a very wide range of possible solutions to design problems. Using materials in various combinations allows the
designer a virtually limitless field of creative opportunities to satisfy customer demands. Just a brief look at broad characteristics shows what
scope there is.

Broad Characteristics of the major materials groups

Metals Polymers Ceramics

Strong Weak Strong

Stiff Compliant Stiff

Tough Durable Brittle

Electrically Conductive Insulating Insulating

High thermal Conductivity Sensitive Low thermal conductivity

Adapted from “Engineering Design: A Materials and Processing Approach” - see ref. 017

Material Selection Process

Clearly material selection is not a trivial process. The impediments to getting it right are:-

• Lack of broad knowledge of various materials

• Materials Data Accuracy Problems
 • A lack of clear goals (e.g. no Product Design Specification [PDS] see guide 6.23)
• The design engineer is called upon to specify or select materials under two main conditions:-
o For new parts or components in combination with other new parts.
o Materials to replace existing parts or components where the current performance is inadequate.
• In either case the designer must follow a problem solving process such as:-
o Determine the material requirements
o Screen Possible candidate materials
o Selection of a range of possible candidate materials
o Develop design solution(s) based on the confirmed capabilities of the materials.

To do this manually requires many hours of research. Therefore a computer based approach is called for. This can be as simple as using a
database or spreadsheet tables similar to this one below:-

Table 1 – Bar Stock

Item Material Cost/kg Cost/m3

1.01 Mild Steel (Black Bar) 1.00 10.00

1.02 Mild Steel (Bright Bar) 1.25 12.90

1.03 Case Hardened Steel 1.38 14.30

1.04 Cast Iron 2.75 18.60

 1.05 Carbon Steel 2.25 21.40

1.06 Manganese Steel 2.50 24.30

1.07 Aluminium 8.50 35.70

1.08 Nickel-Chrome Steel 4.63 42.90

1.09 Brass 6.63 72.90

1.10 Stainless Steel 9.63 102.10

1.11 Phosphor Bronze 16.00 124.30

1.12 Gun Metal 17.88 140.00

The above table plots the relative cost of materials using mass and volume. Other charts and tables could be used to plot any material
characteristic against another depending on the problem needing to be solved. Alternatively we can use more sophisticated approaches that
present properties in a graphical form like an “Ashby Chart” below showing density against Young’s Modulus:-
Whatever approach is taken it can speed the process of arriving at candidate materials for the engineer to make his final selection weighing all
the relevant factors in the process.
Material Selection in the Product Design Process
Material selection takes place at component level in the Product Structure.
As the design team iterates the design the actual material, shape and processing requirements of the components remain in a state of flux until
the team decide enough has been done to satisfy the Product Design Specification and the target cost. It is then “frozen”, approved and released
for manufacture.
The design team use tools that enable them to make many trade-offs to arrive at the final selection.
Many CAD and FEA systems have materials databases that can be adapted, populated or developed for this purpose. Some standalone systems
are available to do this in reverse – they provide the data and selection methodology and the data is made available to design and design analysis
tools. Material comparison charts and tables make useful reference data as input to Value Analysis or Value Engineering studies or projects. See
guide 6.22.

6.16 - Process Selection

Selecting the right process and optimising the design to that process involves a series of design decisions that have a direct impact
on product quality and cost. These decisions, in turn, affect the market viability of the end product to which the components belong.
A manufacturing process selection strategy is shown below:-

• Obtain an estimate on the annual production quantities required

• Choose a material type that satisfies the PDS
• Select a range of possible candidate processes
• Validate each possible process against technical and cost factors thus:-
o Understand the broad process group and its variations
o Consider material / process compatibility
o Assess conformance of the component design concepts with design rules
o Compare tolerance and surface finish requirements with the process capabilities
• Consider the targeted process cost and obtain estimates for alternative processing methods
• Review the selected manufacturing process against the business requirements

Many researchers have prepared process descriptions and parameters and cross-referenced them against the materials available.
This is the subject of intense research so that more rapid cost estimates can be obtained along with the process selection. Some
software products are available that directly produce list of candidate processes as a direct result of analysing the geometric shape
in the CAD model. These software products are being developed using content from CAPP or CAPPES software products as the
basis. Some have been developed from DFMA / DFA software and some are being developed by the CAD software vendors.
In any case they use a means to cross reference the materials to the process similar to the next table. The numbers in the matrix
indicate the maximum annual volume expressed as 10X where X is from the matrix.

Materials è Ferrous Non-ferrous Alloys Non-Metals

ê Processes

1.01 – Sand Casting 7 7 3 7 7 7 7 3 3 3 7 3 2

1.02 – Shell Moulding 6 4 4 4 6 6 4

1.03 – Gravity Die Casting 6 4 4 6 6 5 5 5 4

1.04 – Pressure Die Casting 5 6 6 6 6 6

1.05 – Centrifugal Casting 4 4 4 4 4 4 4 2

1.06 – Investment Casting 4 7 7 7 7 7 4 7 3 7 7

1.07 – Ceramic Mould Casting 4 4 4 4 3 3 3 3 3 4

1.08 – Plaster Mould Casting 4 4 4 4 4 4

1.09 – Squeeze Casting 6 6 6 6

2.01 – Injection Moulding 6 6 5

2.02 – Reaction Injection 4 4

2.03 – Compression Moulding 5 6 5

2.04 – Transfer Moulding 6

2.05 – Vacuum Forming 5 2

2.06 – Blow Moulding 6

2.07 – Rotational Moulding 4

2.08 – Contact Moulding 3

2.09 – Continuous Extrusion 6 6

3.01 – Closed Die Forging 6 5 5 6 6 6 5 5

3.02 – Rolling 6 6 6 6 6 6 6

3.03 – Drawing 6 6 6 6 6 6 6 6 6

3.04 – Cold Forming 6 5 5 6 6 6 6 6 6 5 5

3.05 – Cold Heading 6 5 5 6 6 5 6 5 5 6

3.06 – Swaging 7 7 7 7 7 7 7 7 7

3.07 – Super-plastic Forming 4 6 4 4 6

3.08 – Sheet Metal Shearing 7 7 7 7 7 7 7 7

3.09 – Sheet Metal Forming 7 7 7 7 7 7 7 7

3.10 – Spinning 4 2 4 4 4 4 4 4 4 4 4

3.11 – Power Metallurgy 6 5 5 5 6 5 5 5 6

3.12 – Continuous Extrusion 6 5 5 6 6 6 5 5 5 5 5 5

4M – Machining – Manual 3 3 3 3 3 3 3 3 3 3 3 3

4A – Machining – Automatic 6 6 6 6 6 6 6 6 6 6 6 6

5.01 – EDM 3 3 3 3 2 3 3 3

5.02 – ECM 4 5 5 4 4 5 5 4

5.03 – EBM 3 4 4 4 4 4 4 4 4

5.04 – Laser Beam Machining 3 4 4 4 4 4 4 4 4

5.05 – Chemical Machining 5 4 4 7 5 4 4 3 3 5 5 7 4

5.06 – Ultrasonic Machining 2 3 2 2 3 3

5.07 – Abrasive Jet Machining 3 3 3 3 3

 Chart adapted from “Process Selection: From Design to Manufacture” by Swift & Booker

The previous chart is by no means exhaustive – it serves to illustrate what the main factors are. There are many sub-factors to
selecting a process to match a material selection. Some are shown below:-

• Cost of manufacture
• Geometric Shape
• Actual Material Specification
• Tolerances / Surface Finish
• Tooling, Jigs and Fixtures
• Gauges
• Available Equipment (in-house or in the Supply Chain)
• Delivery Date

Process Selection in a Strategic Context

As the design team considers materials and processing alternatives as possible solutions to design problems they need access to
the kind of information shown in the previous table. The example table in this guide could serve as a starting point. It is biased
towards the metals and metals processing. With the increase in the use of non-metals similar data collection and collation efforts
should be made for that group of materials. The objective is to get a rapid turnaround on the relative costs of ALL candidate
processes. This enables:-

• The generation of alternative and cost effective design ideas that facilitates the matching of available manufacturing
processes to those ideas
• Using that data in the roll-up of component and assembly costs to measure design performance against Target Costs
and Target Weights.

Some firm’s competitive advantage comes from the ability to “design” new materials and processes and do not want that expertise
to become public. They may use a generic materials and process selection system or method and add their own data to the system
to make that knowledge available within the company.
The output from computerised material and process selection systems can be presented as shown in the following diagrams to
enable designers to make rapid trade-off decisions. The costs in this table are relative.

Component Design Mat’l Annual Process Relative Cost

Qty Merits

Low 1,000,000 Machining High waste

Carbon
Steel
Low-med prod
3.9
rates

Poor strength

Cold Low waste

Forming
Plug Body Very high prod
1.0
rates

High strength

Bronze 50,000 Machining High waste

Low-med prod
2.2
rates

Non-Porous

Powder Low waste

Metal
Sintering
High prod
1.0
rates

Porous part
Plain Bearing

Alum 5,000 Spinning High Labour

Alloy Cost
1.8
Low Prod
rates

Low
detail/accuracy

Deep Low Labour

Drawing Costs
1.0
High prod
rates

High
Cover
detail/accuracy
 Med 100,000 Closed Long lead
Carbon Die times
Steel Forging 1.3
High tooling &
equipment
costs

Sand Short lead

Casting times
1.0
Low tooling &
equipment
Con rod costs

Low 5,000 Machining High waste

Carbon
Steel
Low-med prod
2.6
rates

Poor strength

Cold Low waste

Extrusion
Very high prod
1.0
rates

High strength
 Spur Gear

A supplementary display giving instant feedback to the CAD designer on the cost of design ideas as the design is iterated also
speeds process selection (see diagram below).
6.17 - Part Classification and Group Technology

Manufacturing managers know that information or data that cannot be accessed is virtually useless. A company’s intellectual
property is contained in the products and parts it has created to solve particular design problems. According to one source, “Up to
80% of the work done in an engineering department is identical or very similar to work done previously” (from research by Arthur D
Little). Unfortunately this investment is not always managed effectively. One of the most satisfying tasks to reduce design and
manufacturing costs is to implement a part cataloguing and retrieval system enabling previous design work and parts to be re-used.

Classification Systems Requirements

It is important to realise that the classification system has to satisfy at least two major user requirements:-

• —Designer Engineers – need to find things by their functional attributes

• Manufacturing Engineers – need to find the processing routes used to make those things

To illustrate the issues see the diagram below:-

 Flat
Flanges

Deep
Flanges

Impellers

The design engineer will search for flanges or impellers and the manufacturing engineer will pull all those items into a single class
because they have similar manufacturing routes and can be made in the same manufacturing cell.
Classification – Definitions
Dictionary Definition: A system to arrange things in order.
Applied to industry, “A classification system must be able to organize data relating to the relevant component element(s) of a
business in a logical and systematic hierarchy, whereby like things are brought together by virtue of their similarities, and
then separated by their essential differences.” – Joseph Gombinski – Brisch Birn & Co.
To illustrate consider this simple functional classification using MRP or PLM item master records:-

Part Number Primary Description (or Main Noun) Secondary Description (attributes)

1234-01 Bolt Hex M 5 x 25mm

1234-02 Bolt Hex M 5 x 30mm

1236-01 Screw Hex M 5 x 20mm

1237-03 Nut Hex M 5

16547 Gear Pump 40 Liters / min @ 10 bar

16438 Gear Pump 100 Liters / min @ 5 bar

7465-02 Bar Square 5mm x 5mm

This approach, in the absence of a formal classification system, is a good place to start. Selecting and sorting on either description
enables the fairly quick location of previously designed parts. Displayed with a thumbnail image of the part it can be powerful in its
own right. It also lays the groundwork for formal classification systems implementation. The primary description would be used on
external documents only (e.g. maintenance and service manuals so as NOT to give away any IP) whereas the secondary would be
used internally for search, retrieval and recognition purposes. Some of that information can be used to populate a manufacturing
process coding system or functional coding system.

Structure, Order and Similarity Management Brings Benefits

Below are benefits reported by companies using group technology (GT)

• 52% Report reduction in new part design

• 10% Report reduction in # of new drawings thru standardization
• 30% Report reduction in new drawings
• 60% Report reduction in Industrial (or Manufacturing) Engineers time
• 20% Report reduction in floor space
• 45% Report reduced scrap
• 80% Report reduced production and quality costs
• 69% Report reduced set-up time (cost)
• 70% Report reduced throughput time (even more report better predictability of delivery)
• 82% Report reduced numbers of overdue orders
• 42% Report reduced raw-materials inventory
• 62% Report reduced Work In Progress
• 60% Report reduced finished goods inventory
• 33% Report increased employee output/time unit (productivity improvement)

Uncontrolled New Design Costs Time and Money

When a new part number is created it sets in motion a chain of events and work activity that costs huge amounts of cash. The chart
below illustrates:-
Life-cycle Step People Documents and Data

1 – Concept Research Design Engineers Layouts & Schemes

2 – Physical Design Detail Designers 3D CAD, FE, FEA, & 2D Data

3 – Prototype Build Development Engineers Test Reports / test data

4 – Part Sign-off Various Release Documents

5 – Process & Routing Manufacturing Engineers Process Sheets

6 – Tooling Design Tool Designers Tool & Gauge Drawings

7 – Make Tools & Jigs Tool Makers Tool Stores records

8 – Work Study Industrial Engineers Time Standards

9 – Production Control Production Controllers Stores Space Allocation

10 – Cost Accounting Accountants Materials & Prod Cost Data

11 – Data Processing Data Entry Clerks Various Computer Records

Adapted from: “Improving Productivity by Part Classification & Coding” – W F Hyde

About 20% of the cost is in the first 4 steps. In the 1990’s the average cost for the full cycle was calculated to be about £10,000.
Applying a simple inflation factor would give a current cost. Alternatively, an Activity Based Costing approach based on a Flow
Chart model of the above steps should also produce new part introduction cost for a specific company. See guide 8.03 for more
information. A rough-cut number could be calculated by taking the annual cost for R&D and dividing it by the number of new parts
issued each year.

Considerations when Designing a Classification Structure

• External parts and raw materials management
o Use of standard classification systems (e.g. DIN 4000)
▪ Functional characteristics
o Equivalent supplier part numbers cross-referenced to company numbers
o Supplier & vendor management
• In-house parts design management
o Form/shape classification + functional
▪ In-house scheme—company/industry specific
o Group technology for process and routing
▪ Cell design and factory layout
• Sales or customer product features management
o Features & options management (input to Product Configurators)
▪ In-house scheme—company/industry specific
o Controlled product variety
o Design (or configuration) module management

A Shape Based Classification System used to Estimate Costs

Click here for more information on a shape based classification system :-
Shape help for Cost Estimator Tool
One of the key factors to remember when designing a coding and retrieval system is to separate the coding or class numbers from
the part identification numbers. Part identification numbers need to be unique. Coding numbers could be the same for similar parts
depending on the depth of the coding system. Sadly we still see “experts” advocating meaningful part numbering schemes.
The second purpose of classification is to enable manufacturing engineers to design factories and processes to handle the
component designs. They need a compatible way of classifying parts and the machines or processes on which they are
manufactured be made. The Opitz classification and coding system uses this approach. See below:-
Search and retrieval depends on knowing the “Codes” and is usually not intuitive enough for the design engineer. Some work has
been done on retrieval by classification of the 2D or 3D shape of items in a CAD database. Other research work has been done on
expanding the coding systems to cover “Functional Codes” by extending the numeric coding systems to include functional
characteristics derived from the descriptive names given to parts.

Benefits of Part Classification and Coding

 • Defines standard parts and libraries
• Supports access to information in user terminology
• Improves ability to offer product variety
• Provides better reuse of designs and parts
• Reduces design time
• Reduces inventory and scrap/re-work throughout the supply chain for:
o Raw materials
o Finished goods
o Spare parts

6.19 - Rank Order Clustering (ROC) Analysis - Parts

In Modular Function Deployment (MFD) the aim is to design from scratch functional and physical modules (see guide 6.18).
However, we may have products that are going to be in production for many years to come and we need to do what we can to
manage the current situation efficiently. Rank Order Clustering can used to find common parts for the products we have now. The
process is similar to that described in guide 5.35 for finding common processes. This time we have assemblies A, B, C, D, & E.

A B C D E Totals
Assemblies

↓ Parts Binary Dec.

1 1 1 1 10110 22

2 1 1 01011 9

3 1 1 1 10110 22
 4 1 1 1 10110 22

5 1 00001 1

6 1 1 1 1 1 11111 31

7 1 1 01001 9

8 1 1 10010 18

9 1 1 1 10110 22

10 1 1 1 10110 22

11 1 1 01001 9

12 1 1 1 10110 22

13 1 1 01001 9

14 1 1 01001 9

Binary Total

Decimal

We can quickly see that parts 1, 3, 4, 9, 10, & 12 have the same binary score indicating they are common to some of the
assemblies (A, C, & D).
The next stage is to re-order the parts according to their binary totals thus:-

A B C D E Totals
Assemblies

↓ Parts Binary Dec.

6 1 1 1 1 1 11111 31

1 1 1 1 10110 22

3 1 1 1 10110 22

4 1 1 1 10110 22

9 1 1 1 10110 22

10 1 1 1 10110 22

12 1 1 1 10110 22

8 1 1 10010 18

2 1 1 01011 9

7 1 1 01001 9

11 1 1 01001 9
 13 1 1 01001 9

14 1 1 01001 9

5 1 00001 1

Binary Total

Decimal 16320 8254 16256 16320 8255

Sort the columns by their totals and we get the result on the next chart. We have part groups (brown, green and yellow) highlighted
as shown.
Notice that ALL the assemblies contain part 6. This is a common part. The brown group is common to assemblies A C & D and the
green group is common to assemblies B & E.

A D C E B Totals
Assemblies

↓ Parts Binary Dec.

6 1 1 1 1 1 11111 31

1 1 1 1 10110 22

3 1 1 1 10110 22

4 1 1 1 10110 22
 9 1 1 1 10110 22

10 1 1 1 10110 22

12 1 1 1 10110 22

8 1 1 10010 18

2 1 1 1011 9

7 1 1 1001 9

11 1 1 1001 9

13 1 1 1001 9

14 1 1 1001 9

5 1 1 1

Binary Total

Decimal 16320 16320 16256 8255 8254

Part 8 is common to A & D. Part 5 is unique to assembly E. After sorting, the binary and decimal values for the rows actually
change their values, but it does not affect the results. By using text concatenation and binary to decimal conversion add-ins in Excel
it is possible to manipulate some fairly large matrices in this manner. For information on how to manage common part groups in
similar assemblies to assist with part rationalisation and modular design see guide 6.20.
BOM Efficiency Improvements
The product structure for the original arrangement would be:-
Assembly A – 1, 3, 4, 6, 8, 9, 10, 12
Assembly B – 2, 6, 7, 11, 12, 13, 14
Assembly C – 1, 3, 4, 9, 10, 12
Assembly D – 1, 3, 4, 6, 8, 9, 10, 12
Assembly E – 2, 5, 6, 7, 11, 12, 13, 14
Assembly A and D are identical – this is not an unusual finding where little, or no, attention has been paid to modularisation. So of
the total of 37 structure records by modularisation we can eliminate assembly A or D all together. If we create sub assemblies
green and brown, we get the following:-
Sub-assembly (or phantom) Brown – 1, 3, 4, 9, 10, 12
Sub-assembly (or phantom) Green – 2, 7, 11, 13, 14
The original assemblies now look like this:-
Assembly A – Brown, 6, 8
Assembly C – Brown, 6
Assembly E – Green, 6, 5
Assembly B – Green, 6
The total product structures have been reduced to 21 from 37 – almost a 50% reduction. This affects computer processing time to
generate requirements and BOM displays etc. Assembly kitting is easier and the BOM maintenance time is reduced and
engineering change is much easier to manage.
Some BOM systems have a reporting capability called a matrix BOM. This is similar to ROC method described here. The user
schedules the report with the part numbers of the assemblies s/he wishes to compare and the number of levels the bill should be
exploded too. A matrix report is generated with components down the page and assemblies across the page. However, it is up to
the user to do the clustering to determine what the natural option groups could be. The matrix report could be imported into a
spreadsheet tool for clustering.
The next guide, modularising the BOM (guide 6.20), shows what else can be done to improve the BOM structure.

6.20 - Modularising the BOM

Benefits of Modularisation
Customers are demanding rapid delivery of products configured for their requirements – otherwise known as mass customisation.
An example of this is the personal and laptop computer market. A customer can go on-line and configure his machine and take
delivery within a few days. This is achieved by design of the product, the manufacturing process and the option and selection
mechanisms in the bill of materials. It gives the customer the feeling of choice and enables the manufacturer to standardise the
product design and the manufacturing process.

Modularising the Bill of Materials

We may have just started designing or re-design our products using the methods described in guide 6.18 but how do we find what
the opportunities are for our current products? How can we simplify what we have now? We introduced the use of rank order
clustering in guide 6.19 to assist with this. In this guide we will discuss modularisation and the use of options and variants to enable
configure to order or engineer to order to manage multiple end item or products without complex BOM’s.
Modularising the BOM means grouping parts in a product by the options they are sensitive to. For instance an electrical device to
be sold globally might have two transformer options – 220 volt and 110 volt. The end product would be sensitive to the voltage
option. The designers, in the meantime might be set the target of designing one universal transformer that does not cost more than
the administration cost of managing the two fixed voltage transformers. Let’s leave to designers to beaver away while we see what
we can do in the meantime. By creating bills for each option we have the advantage of fewer BOM’s, less management and
maintenance issues. Order entry is significantly simplified also. That can now be the point of configuration. Thus:-
 Order Entry Form Options Check Box

Super Electrical Device Voltage 110

220

Colour Pink

Blue

So the BOM would look something like this:-

We have one end item to manage using modularisation. The crucial items that affect the customers choices are isolated and can be
managed in their own right both from and engineering configuration control view point and from a product planning and scheduling
view point. If we had one end item for each possible configuration we would have a total of 4 end items for just two voltage options
and two colour options. Expand the colour options to 3 and we would have six end items and so on. Using modularisation we just
add one more colour module – red for instance – and that’s it.

Steps to modularizing the Bill of Materials

1. Identify the product family groups.
2. Identify the options.
3. Determine the option sensitivity
4. Create the master bill of materials
5. Create the planning bill(s)
6. Create the end item bill(s)

To demonstrate the process we are going to use the ubiquitous example of the Sure Fire Lawn Mower. You may notice that Sure
Fire Ltd have now gone metric but still have not modularised their bills of materials which are shown below:-
1 – Identify the Product or Family group(s)
For the Sure Fire Lawn Mower this is easy. We have the family of lawn mowers of which there are 8 permutations – four 450mm
cut mowers and four 550mm cut mowers. Of course, with only eight end products it is a relatively trivial matter to manage each end
product bill of material. However, it does serve to illustrate the modularisation concept.

2 – Identify the options

The options the customer can select are:-
Options Cut Width 450 450 450 450 550 550 550 550

Engine Type 4 4 2 2 4 4 2 2

Starter Type A M A M A M A M

Item Part Description Qty 101- 101- 101- 101- 102- 102- 102- 102- Binary
No 1 2 3 4 1 2 3 4

1 H123 Handle 1 1 1 1 1 1 1 1 1 11111111

2 B542 Housing 1 1 1 1 1 11110000

(450mm
Cut)

3 B606 Housing 1 1 1 1 1 00001111

(550mm
Cut)

4 W890 Wheel 4 1 1 1 1 1 1 1 1 11111111

5 B765 Blade 1 1 1 1 1 11110000

(450mm
Cut)

6 B987 Blade 1 1 1 1 1 00001111

(550mm
Cut)

7 M440 Silencer 1 1 1 1 1 1 1 1 1 11111111

8 S105 Switch 1 1 1 1 1 1 1 1 1 11111111
(on/off)

9 T880 Throttle 1 1 1 1 1 1 1 1 1 11111111

10 E220 Engine (4 1 1 1 1 1 11001100

Stroke)

11 E240 Engine (2 1 1 1 1 1 00110011

stroke)

12 A150 Shaft 1 1 1 11000000

13 A250 Shaft 1 1 1 00110000

14 A350 Shaft 1 1 1 00001100

15 A450 Shaft 1 1 1 00000011

16 X310 Starter – 1 1 1 1 1 10101010

Auto

17 X410 Starter – 1 1 1 1 1 01010101

Manual
Options Cut Width 450 450 450 450 550 550 550 550

Engine Type 4 4 2 2 4 4 2 2

Starter Type A M A M A M A M

Item Part Description Qty 101- 101- 101- 101- 102- 102- 102- 102- Binary
No 1 2 3 4 1 2 3 4

1 H123 Handle 1 1 1 1 1 1 1 1 1 11111111

4 W890 Wheel 4 1 1 1 1 1 1 1 1 11111111

7 M440 Silencer 1 1 1 1 1 1 1 1 1 11111111

8 S105 Switch 1 1 1 1 1 1 1 1 1 11111111

(on/off)

9 T880 Throttle 1 1 1 1 1 1 1 1 1 11111111

2 B542 Housing 1 1 1 1 1 11110000

(450mm
Cut)

5 B765 Blade 1 1 1 1 1 11110000

(450mm
Cut)

10 E220 Engine (4 1 1 1 1 1 11001100

Stroke)

12 A150 Shaft 1 1 1 11000000

 16 X310 Starter – 1 1 1 1 1 10101010
Auto

17 X410 Starter – 1 1 1 1 1 01010101

Manual

11 E240 Engine (2 1 1 1 1 1 00110011

stroke)

13 A250 Shaft 1 1 1 00110000

3 B606 Housing 1 1 1 1 1 00001111

(550mm
Cut)

6 B987 Blade 1 1 1 1 1 00001111

(550mm
cut)

14 A350 Shaft 1 1 1 00001100

15 A450 Shaft 1 1 1 00000011

• 450mm or 550mm cut

• 2 stroke or 4 stroke engine
• Manual or Automatic Starter

That’s 6 in all.
3 – Determine the option sensitivity
Using ROC analysis introduced in guide 6.19 we can determine option sensitivity.
Sorting by the binary numbers we get the following:-
The common parts group (green) immediately comes to the top when we sort by descending order. The housing and blade parts
are clustered together (yellow). The engine and shafts are also grouped (blue). By looking for the patterns we can quickly see what
the option sensitivity is for the product family. The housing and the blade are sensitive to the cut width. Obviously the engine is
sensitive to the 2 stroke or 4 stroke options. Shaft selection is sensitive to engine and cut width option. We have a total of four
shafts and only two engines and two blades. This makes things more complicated than they need be. There are a number of ways
to resolve this:-

1. Get engineering to reduce the number of shafts. One shaft would be wonderful. Two would be acceptable.
2. Review the manufacturing process. Is there commonality at the raw materials and processing level perhaps enabling the
items to be part finished and then the variation added when the actual order arrived?
3. Maybe nothing can be done – the shafts have to be the way they are. If that’s the case then each shaft will have to be
forecast according to the percentage of options it is used on. It could be handled by over-planning the shafts which is
better than building mowers to stock – just in case!

4 – Create the Master Bill

Now the parts are identified by option we can group them accordingly in the bill of materials. Instead of 5 common parts to schedule
by creating a “bag of bits,” as it were, for them we need only schedule one number. So our common parts group, C100 say, looks
like this:-
C100 is coded as a phantom item which means it is ignored by the MRP system for scheduling purposes. The master bill can now
be created using these "bags of bits" as the options. The net result is shown below:-
At order entry time we create the unique bill for the order by selecting the options the customer has requested.

5 – Create the Planning Bill

Depending upon the bill of material software capabilities we will either have to create a separate planning bill or indicate on the
various phantoms in the master bill we have created the ratios of the options mix for planning and scheduling purposes.

6 – Creating the End Item Bill of Material

Creating a unique bill for each order can be done in a couple of ways:-

• Create a Works Order with each of the required phantom numbers as a line item on the order. This might mean the
creating and maintaining of an options selection guide for each product family.
• Use a configuration tool to allow order entry by selecting the options only. The configuration tool then puts the correct
parts on the order.

Because of the complexity of some products most users choose to use the second method utilising some kind of computerisation
that allows for the management of options that are dependant on other options, for instance, the selection of the right shaft, in the
Sure Fire Lawn Mower.

Engineering and Design Notes

It looks like the shaft varies with the blade size and engine type and the mounting varies at each end of the shaft. Probably the
engine end cannot be altered as it is bought in as a complete assembly. However, it looks like just two of the shafts could be used –
one for the 2 stroke engine and one for the 4 stroke engine with a common mounting for the blades. This could mean a new part for
a 450mm blade with the same shaft mounting as the 550mm blade. If engineering confirm this then we could use the new 450mm
blade and drop two of the shafts (A150 and A250) from the bill. Without engineering input this is just speculation. If presented in the
right way to the designers they will usually rise to a challenge like this.
Modularisation exposes design, manufacturing, scheduling problems and variation issues for discussion and resolution. All
members of the company can share in their resolution. It makes BOM management and maintenance easier, for example,
rationalising the shafts and blades as suggested above, means changing the blade in one place instead of four.