03.06.2024

Are You Using BOM or ABOM For Your Ecofee Reports?

When preparing your ecofee reports for Packaging and Printed Paper (PPP) in Canada, understanding the difference between a Bill of Materials (BOM) and an Average Bill of Materials (ABOM) is crucial. These two methodologies are fundamental in managing Extended Producer Responsibility (EPR) programs and can have a significant impact on the ecofees to be paid. Do you know the differences and advantages of each approach?

Let's take a closer look at each model to help you decide which methodology suits your business best.

Accurate and Detailed Approach with the Bill of Materials (BOM)

The BOM is a detailed list of all components and materials required to manufacture a product, including its packaging. This list includes various information, including the materials used and their weights.

Advantages of BOM in Ecofees Reports

1. Precise Identification of Materials: The BOM allows companies to compile a comprehensive and detailed list of all materials used in their products, making it easier to identify materials subject to EPR programs. By centralizing information on materials, the BOM enables companies to precisely track those used in their products and can also help reduce costs associated with materials, such as those related to eco-design packaging.

2. Exact Ecofees: By providing comprehensive documentation of materials used, the BOM helps companies ensure the accuracy of quantities reported against regulatory ecofees requirements and ensures they pay the exact amounts to the agencies. This is also an optimal methodology for manufacturers who maintain a detailed record of materials used in the manufacturing of their products.

However, you will need to have all the information at hand! This methodology will require a lot of preparation and classification time if you have many goods and varying packaging.

Simplified Execution of Average Bill of Materials (ABOM)

The ABOM is a simpler version of the BOM in a context where your company has numerous products (SKUs) with similar packaging. It is possible to average them to group them into the same report group. For example, the same product, but sold in three different formats. It would be possible to obtain sample weights in each report group and apply an average of these weights over the entire group, which must be adjusted based on the quantity of product sales (weighted average).

Speed: The Advantage of ABOM

The ABOM saves a lot of time during your reporting process. By grouping similar SKUs, you avoid having to list, weigh, and classify everything individually. However, you could end up paying much larger sums than you owe. Indeed, we have observed with some of our clients that they overestimated the reported quantities and thus paid too much in ecofees. An adjustment to be fairer and more representative of their products on the market has allowed them to make significant savings. We invite you to read our Case Study on the matter.

Conclusion

Is your company using BOM or ABOM for its ecofees reports? As we have just identified, each methodology comes with its advantages and disadvantages. The ease of execution of ABOM is certainly appealing, especially for large retailers responsible for several hundred – and even thousands – of different SKUs.

Another option is available to you: entrust everything to Evnia. Indeed, we offer a turnkey service for managing your ecofees reports and can analyze which of the methodologies is most advantageous for your business.

If you have any doubts about your compliance, feel free to contact us.