ABSTRACT
Bills of material are typically initiated in engineering and are the foundation of the quoted price to customer. At this point in time, they represent a prediction of what the actual resource consumption—and cost—will be for the project or part. Keeping bills of material accurate requires an effective feedback loop to adjust resource data based on actual experience. Turn off detailed variance reporting and daily accumulation of transactions into variance accounts. Allocate the amount of time would have spent each month in analyzing variances to continuous improvement projects. Even accounting activities have white space and there are lots of opportunities in the office. Each level of a bill of material is an opportunity for work in process. The first level bill has an output, which becomes an input to another process or level. A work order will generate for the quantity needed at the next step in the process.
