What Is a Bill of Materials (BOM)?

A BOM is a structured, comprehensive list of the materials, components and parts required to
manufacture or repair a product, as well as the quantities in which the materials are needed
and their names, descriptions and costs.

A BOM also includes instructions for procuring and using these materials. Because of the
breadth and depth of the data it captures, a BOM can act as a central record of the materials,
components and processes used to build a product.

Key Takeaways

 A bill of materials (BOM) is a structured list identifying all materials and components
required to construct a product, as well as the instructions for procuring and using the
materials.

 A BOM helps organizations plan purchases of materials, estimate costs, plan for and
control inventory and minimize production delays and waste.

 An accurate, complete BOM helps identify the cause of a product failure and work
quickly to replace the faulty parts, materials and components.

 BOMs come in a range of forms and types. They can be single- or multi-level. Some of
the most common types are engineering, manufacturing and sales BOMs.

Bill of Materials Explained

A BOM is essentially a blueprint for manufacturing a product. It encompasses the materials,

components and steps required to create the item.

Most BOMs are structured in a hierarchy. At the top is the completed product, next are
subassemblies and below those are the components and materials that go into making the
product. This includes details like part names, numbers, descriptions and the quantities
needed.

While the concept of a BOM is straightforward, creating and managing bills of materials can
become complicated, especially for products composed of hundreds or thousands of parts.
For instance, if it becomes necessary to change one component because a supplier can’t
meet its delivery deadlines, this change needs to be replicated throughout the BOM
wherever that component is used. Some basic parts, like adhesives, may be used in multiple
areas.

Why Use a BOM?

BOMs facilitate efficient and accurate manufacturing. By identifying and pricing all the
materials and components needed to make a product — before production begins — an
organization can determine whether it has everything it needs to move forward with minimal
risk of delays. This reduces the likelihood of both shortages and overages of materials or
components. By helping ensure the right parts and materials are available at the right time
and in the right quantities, BOMs help manufacturers remain within budget and on schedule.

Companies that work with contract manufacturers and provide the manufacturer with a BOM
can be more confident the final product will meet their specifications.

Conversely, proceeding without a BOM increases the likelihood of costly and time-consuming
mistakes. These include shortages or overages in materials, production downtime while the
materials are assembled and additional expediting charges to make up for earlier delays.

Similarly, different areas within a company can be primary users of different types of BOMs.
For instance, engineering and/or design typically uses an engineering BOM. Manufacturing
generally uses manufacturing BOMs.

10 Key Elements of a Bill of Materials (BOM)

What is included in a bill of materials? Most BOMs include the following elements: BOM
level; the part number, name, description and quantity; cost; and the unit of measure. While
the bill of materials includes components and parts, it doesn’t include labor.

1. BOM level
This is a unique number showing where each part or assembly fits within the BOM
hierarchy. Consider a BOM for a vehicle. Each major component, like the engine,
doors and drivetrain, would be a level. They’d be further broken into components and
materials, like the pistons and crankshaft that are part of the engine. The pistons and
crankshaft would themselves each be a level and then broken into their component
parts. An example would be the piston rings that are part of the pistons.

2. Part number
This unique number identifies a material or component, enabling anyone involved in
the production process to identify it quickly. Part numbers can be intelligent — that is,
they include some description of the part. For instance, an intelligent number for wire
might be "WIRE-001."

Intelligent numbers can make it easier to identify each part. However, they require the
person developing the numbering scheme to know each part in some detail before
assigning numbers.

Non-intelligent part numbers include no descriptions. They’re generally easier to

generate and likely to remain accurate for longer periods.

For most organizations, either numbering system can work. The key is to be
consistent.

3. Part name
The part name also is a unique identifier for each part or assembly. Like the part
number, it helps users to identify the part quickly.

4. Phase
The phase indicates the lifecycle stage for each part. Examples include “in production”
or “in design.”
5. Description
Also unique to each part or component, the description provides more detail than the
part name or number. Descriptions are helpful when it’s necessary to distinguish
between parts that appear similar. For instance, “screws” could include both 1/2- and
5/8-inch machine screws.

6. Quantity
The quantity indicates how many of each part will be used in an assembly or sub-
assembly. An example would be two piston rings per piston cylinder.

7. Unit measure
This designates in what unit of measure a part will be procured and/or used.
Specifying the measure helps ensure the right quantities are ordered. For parts that
are complete, like gaskets, the unit measure likely will be “each.”

For some parts or components, it makes more sense to use a unit of measure. For
instance, wiring and lumber generally are purchased by the foot. Small, inexpensive
parts that are difficult to count, like nails or screws, may be purchased by weight or by
the box.

8. Procurement type
This indicates how the part or component is obtained. Choices typically include
purchasing the part, producing it internally or having it manufactured by
subcontractors.

9. Reference designator
The reference designator comes into play when products contain printed circuit-board
assemblies. The reference designator identifies the location of each part within the
circuit board assembly.

10. BOM notes

The notes section offers a chance to include other information useful to anyone
referring to the BOM. It might consist of a list of alternate suppliers or the
specifications that a material, like an adhesive, must meet.
Bill of Materials (BOM) Displays

Bills of materials generally are presented in one of two ways:

Explosion Display
In an explosion display, the BOM starts with the highest level of the product — say, computer
motherboard — at the top. It then breaks the product down into components and parts that
become increasingly more granular.

Implosion Display
An implosion display is the inverse of an explosion display. It starts with individual parts and
links them to form the major product or assembly.

Advantages & Value of a BOM

Why is a bill of materials important? By providing a single record of the materials,

components and assemblies that go into the product, a bill of materials ensures these items
are in-house when needed and at the quantities required during production. This minimizes
inventory inaccuracies and production delays, both of which cost time and money.

Bills of materials also ensure uniformity. When each production run follows the same BOM,
the products themselves remain consistent. This helps ensure they meet customer
expectations and is critical when products need to meet safety or other standards.

The information contained within BOMs also is key when it becomes necessary to track
product failures. With this document, it’s possible to identify the parts, materials and
components used and zero in on potential sources of failures. Manually preparing and
managing BOMs can quickly become unwieldy and error prone. Software, such as a supply
chain and inventory management solution, can help automate the development process.

The Two BOM Structures

BOMs may be structured in one of the following two ways:

 1. Single-level Bill of Materials
In a single-level BOM, each part that will make up the product or asset is shown once,
along with the quantity needed. It’s similar to a shopping list.

While single-level BOMs are easy to create, they don’t show the relationships between
the assemblies, subassemblies and components used to construct a product. If a
product fails, it may be difficult to determine precisely which component needs to be
repaired or replaced.

For instance, assume a BOM for a vehicle is constructed in a single-level format. It

later becomes clear that the door handle on the vehicle is faulty. The single-level BOM
won’t distinguish between the parts that went into the handle and those used in other
vehicle parts. For this reason, single-level BOMs typically are used with simpler
assemblies.

2. Multi-level Bill of Materials

In contrast to the single-level bill of materials, a multi-level BOM shows the
relationship (sometimes called parent-child) between components, sub-assemblies
and assemblies. It often does this by indenting the materials and/or subassemblies
that make up the higher-level part or assembly. For this reason, multi-level BOMs
sometimes are referred to as indented BOMs.

A sub-assembly may, in turn, comprise multiple components. When changes are

made to the assembly (or parent), they flow to the subassembly (or child). Because
they show these relationships, most complex products use multi-level BOMs. Bill
plate

Download our free bill of materials template to plan purchases of materials, estimate costs,

Types of Bills of Materials

Both single- and multi-level BOMs may be created for use at various stages of the product
development lifecycle. The primary types include engineering, sales and manufacturing
BOMs.
Each focuses on different information.

Engineering Bill of Materials (EBOM)

An engineering BOM is developed while a product is being designed and defines a finished
product’s original design. It includes the items, parts, components and subassemblies as
designated by engineering. It generally consists of a technical drawing of the product.

Engineering BOMs, as their name indicates, typically are developed by engineers. They often
use computer-aided design (CAD) software or similar systems to create the BOM.

Sales Bill of Materials (SBOM)

A sales BOM lists the products and components required to develop a product as ordered by
the customer. It’s developed from the sales order and includes both the finished product and
components, as they appear in the sales record.

Manufacturing Bill of Materials (MBOM)

A manufacturing BOM is used during production. It identifies the parts and assemblies
needed to produce a shippable product, including packaging, and accounts for waste and
items consumed in the production process.

An MBOM identifies the groups of parts needed at each stage of the production process and
provides information on the processing required by various parts before assembly. This helps
determine when materials must be purchased and when various manufacturing processes
need to begin to meet scheduled delivery dates.

For a new product, an MBOM may last for a set period, such as several weeks. Then, if it
becomes clear the product requires changes, the MBOM can be updated or a new one may
be generated.

Information in the MBOM typically is shared with several systems, including the enterprise
resource planning (ERP) system and material requirement planning (MRP) systems.

Configurable Bill of Materials

This BOM is used for finished products that are configured and designed to meet
specifications requested by a customer. It identifies the materials and components, including
any labeling or packaging requirements, needed to manufacture the product to the
customer’s requirements.

Production Bill of Materials

A production BOM acts as the foundation for a production order and includes the
components and assemblies that make up a product. As production proceeds, the
components are converted to finished products.

Assembly Bill of Materials

Like a sales BOM, an assembly BOM lists the parent item as a sales product rather than an
inventory item. An assembly BOM also lists sub-assemblies (or children).

Template Bill of Materials

Template BOMs offer flexibility, as they can be used for either production or sales BOMs.
These also include parent and child components.

How to Create BOMs in 7 Steps

Depending upon the industry, designers or engineers as well as purchasing, scheduling, and
planning workers will want to review them to ensure accuracy — an accurate BOM serves as
a roadmap for finished goods and frees up resources to spend on the actual production
process. Several steps are involved in creating an accurate, useful bill of materials, among
them:

1. Determine what data to include.

For instance, will the BOM include consumables, like glue or wire? While this may
seem unnecessary, including these within the BOM from the beginning helps ensure
these materials are available when needed.

2. Centralize control of the BOM.

In many organizations, different departments or functions use different information
systems. For the BOM to remain accurate and up-to-date, it will need to assemble
information from all these systems into a single record.
3. Determine who will be able to change the BOM.
To minimize the risk of mistakes, the number of editors should be limited.

4. Decide how to track revisions to the BOM.

Many BOMs are revised on a continuous basis. For the BOM to continue to provide
value and remain accurate, all changes need to be tracked. Ensure all changes can
be connected back to the authors.

5. Choose the BOM presentation.

Such as single- or multi-level, that makes sense for the product.

6. Begin listing.
The materials, components and parts that will make up the product. This list will grow
and change over time.

7. Continue to add to and refine the list.

Tracking all changes.