Want Manufacturing Excellence? Pull back the curtain, it’s the data!
The Scarecrow needed a brain. The Tin Man needed a heart. The Cowardly Lion needed courage. And the Wizard? He turned out to be smoke and a microphone.
In manufacturing, the equivalent trio is BOMs, routings, and cost standards. Not the headline on the transformation initiative. Not the feature that sells the system. But the thing that determines whether the operation runs, or whether the people running it spend their days as flying monkeys, compensating. And when a new system, a new module, or a new AI pilot pulls back the curtain, these three things are almost always what are lurking.
BOMs: Running Without a Brain
A Bill of Material contains part numbers and quantities. It also works in conjunction with something just as consequential: consumption logic. Together this is what the system uses to relieve inventory when a production is declared. If quantities are wrong, if scrap and yield factors reflect generic assumptions rather than production capability, the system pulls the wrong amounts from the wrong locations. System inventory positions quietly drift from actual counts until either someone does a physical count, or a material shortage halts production, and everyone is (not) surprised.
Good BOMs are purposefully inclusive and exclusive, and that distinction matters. Not every material that touches a product belongs on the BOM in the same way.
Tertiary and protective packaging, things like dunnage, void fill, and shrink wrap, ships with the product but is not consumed in the build itself. Sometimes tying them to individual work orders is a lot of bookkeeping for zero costing benefit. Many operations manage them through vendor-managed inventory arrangements, replenishment triggers, or purchasing contracts, keeping them outside MRP entirely.
Wear parts, things like tooling, dies, and blades, present a different challenge. Because wear parts are consumed across many assemblies rather than in a traceable quantity per unit produced, some operations assign a usage rate and run them through MRP. Others manage them through maintenance and MRO channels outside the BOM. The wrong choice creates either phantom material requirements or invisible cost. Consumables like cutting fluids, abrasives, or cleaning agents are similarly coded apart from direct components because they are consumed but not traced to a specific build.
Phantoms, assemblies that exist for planning purposes but are never built as a discrete unit, require specific BOM structure so the system explodes requirements correctly without generating phantom work orders. Co-products and by-products from process manufacturing steps need to be recognized for what they are so the system handles costs and inventory treatment correctly.
As a CAD drawing transforms into ERP data, every item on the BOM should be there or absent for a reason and have an appropriate configuration. Fudging those classifications creates material management complexity that compounds.
Routings: The Courage to Set a Valid Standard
Routings define the sequence of operations, the work centers, the labor pools, the setup and run times. They sound like technical documents when they are, in fact, a collaboration.
The design engineer knows what the product needs. The operations team (or manufacturing engineer if your organization has one) knows what the floor can do: which work center runs this geometry, which labor pool has the certification, what sequence makes sense given how the shop is laid out, how the last product routed this way performed. When that conversation does not happen, or when a routing gets copy-pasted from a similar part without any dialogue, the gap between the routing and the floor starts on day one.
It takes some courage and a lot of effort to establish a routing that achieves a prescribed target margin based on observations rather than defaulting to financial gymnastics. The pressure usually pushes standards to be tight. But I’ve even seen the other way, where a production manager had a hedge buried in an often-used routing step. Either direction corrupts the signal. And if establishing a valid routing takes courage, then keeping it current takes resolve, including after every engineering change to the product or process.
When a routing represents reality, it drives more than performance measurement. Setup times and run rates feed scheduling and capacity planning. Work center definitions determine equipment loading. Sequenced operations determine material flow. Production requirements drive labor management. A routing that only fills the required field at item creation is cheap data furniture.
Standards: The Operational Heart of Continuous Improvement (CI)
Cost and labor standards are where the scorecard gets built. Get them wrong and every downstream measurement is measuring the wrong thing. Efficiency measurement, variance analysis, quoting accuracy, and capacity planning, all reading from a crooked ruler.
Weak standards reduce variance analysis to unactionable noise. If the baseline was wrong, the deviation from it tells you nothing and the investigation wastes everyone’s time. When standards are built from real conditions and maintained as processes evolve, they become the engine for root cause analysis, corrective action, and CI.
Variance from standard identifies what is worth investigating. A meaningful variance triggers the question: what changed? Below, what’s wrong? Above, is there something here worth replicating? Those questions, answered consistently, are what a CI discipline looks like embedded in operations.
What Lands in the Warehouse
Bad BOMs and routings are a warehouse problem too, and the effects are often more localized than expected. When consumption logic pulls from the wrong storage location, total plant inventory can look fine while a specific location is wrong. System (mis)directed picks force material handlers to be workaround experts & exception reporters instead of fork truck drivers. Have you ever tried to decode their handwritten notes on some crumbled-up scrap paper? That verification adds time to every transaction and teaches everyone on the floor the same lesson: the system cannot be relied on.
At the planning level, inaccurate consumption logic drives over-purchasing. Good material sits aging in storage, destined to expire before it ever gets used. Excess raw material and WIP accumulate because the system cannot reconcile what was issued against what was built. The Material Review Board says, “Build it out. At least that gives us a shot at selling it.” Storage fills with finished goods. Flow gets disrupted by the inventory mountain. What started as a data definition decision during item setup shows up on the floor as congestion, carrying cost, and a cycle count that confirms what everyone already suspected.
Behind the Curtain
BOMs, routings, and standards are called the basics because they have always been required for manufacturing. Getting them right takes cross-functional discipline, process ownership, and a commitment to keeping them current. This way when the next initiative arrives, there is something real behind the curtain to build on.
—Bob Swidarski, St. Onge Company
Appendix – Wizard of Oz Concepts
Scarecrow, no brain — BOMs without consumption logic. Running the operation without real intelligence encoded.
Tin Man, no heart — Standards treated as accounting artifacts with no operational pulse. No CI engine behind them.
Cowardly Lion, no courage — Routings built aspirationally because nobody had the nerve to measure and record what actually happens, or to update the standard when it was wrong.
The Wizard — The ERP or new system that looks impressive until go-live pulls back the curtain and exposes what was never really in there.
Flying monkeys — The planners, buyers, and supervisors running manual workarounds to compensate for what the system can’t do.
