MAKE | Supply Chain Analytics
BOM optimization and cost efficiency
Manufacturing Cost Analysis examines and optimizes expenses associated with production, focusing on the Bill of Materials (BOM).
The aim is to reduce costs while maintaining or enhancing product quality.
Identifying opportunities to reduce direct and indirect costs associated with the BOM.
Optimizing use of materials and resources to minimize waste.
Streamlining manufacturing processes for greater efficiency and cost savings.
"BOM Explosion refers to the extensive list of raw materials required to manufacture, design and fix a product or service."
Design-focused bill of materials from engineering perspective
Production-focused bill of materials for manufacturing
Using graphs for BOM querying can transform EBOM into MBOM efficiently.
| Data Type | Description |
|---|---|
| Bill of Materials | Detailed list of raw materials, components, and assemblies |
| Supplier Invoices | Actual costs paid for materials and components |
| Labor Records | Labor hours and rates for production |
| Manufacturing Overhead | Utilities, depreciation, factory overhead |
| Market Pricing | Current market prices for benchmarking |
Allocate overhead to products based on actual resource consumption
Understand how volume/material costs affect total cost
Identify the "vital few" cost drivers (80/20 rule)
Understand complex relationships between cost factors
Direct costs attributable to production
Revenue minus COGS as % of revenue
Returns on materials used in production
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