Bill of Materials (BOM) Explained

By Annapoorna


Updated on: Apr 5th, 2022


7 min read

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Bill of Materials (BOM) is an important source of information for manufacturing concerns. It is also known in different names such as assembly component list, production recipe or product structure. This article deep dives into the meaning and contents of the bill of materials and how to create one.

Meaning of bill of materials and relevance

The Bill of Materials (BOM) refers to a comprehensive list of items, parts, assemblies and materials used or consumed to produce or manufacture a particular finished product. A BOM mentions the name, description, cost, and quantity of each material required. It also provides the instructions to use the specific parts and materials and the instructions for the procurement of these materials. Therefore, in short, it is referred to as a recipe to manufacture a particular product.

It also includes documents, drawings, subassemblies and intermediate assemblies. It is usually presented in a hierarchical format. The highest level represents the finished product, and the bottom shows all individual parts and materials. 

The display can be either implosion or explosion kinds, depending on the manufacturer’s requirement. The explosion view of BOM displays the highest level of the product, such as the finished product itself and then breaks it into parts and components. Whereas the implosion view displays the inverse of an explosion view. It begins with the individual parts and connects to the final product or assembly.

A BOM is relevant at the beginning stage of product manufacturing to ensure the efficiency of the production process. It gives an idea about the availability of raw materials and assemblies to finish a product. 

Who uses bill of materials or BOM?

All manufacturers producing goods and belonging to any industry begin their manufacturing by making the bill of materials (BOM) for that particular product. The engineering department makes an engineering bill of materials (EBOMS), whereas the product team relies on the manufacturing bill of materials (MBOMS).

Accordingly, the following teams use a BOM-

  • Material procurement team for sourcing materials.
  • Manufacturing and production team or department, including contract manufacturing partners,  design, engineering and mechanical teams.
  • Assembly team or department.
  • Operations team.

Contents and format of bill of materials or BOM

The Bill of Materials (BOM) contains the details about the particular product’s engineering, design, document management, manufacturing, purchasing, contract manufacturers, etc. There could be certain custom information based on the product. Such information may include mechanical or hardware-related, electrical (e.g., ICs, PCBAs), or software-related information. More commonly, the following is the list of particulars in a typical Bill of Materials (BOM)-

  • BOM Level that signifies level identification number depicting each part or assembly to fit in the hierarchy of the BOM for quick understanding of the BOM structure.
  • Part Number assigned to each part or assembly for reference and identification.
  • Part Name, which records a unique name for each part or assembly.
  • Phase records the stage that every part and product is along its lifecycle. 
  • The description provides a detailed description of each part to distinguish between similar parts and recognise specific parts more conveniently.
  • Quantity records the quantum of parts for each assembly or subassembly.
  • Unit of Measurement categorises the measurement in which a part is used or purchased. For example, inches and feet.
  • Procurement Type documents how to purchase each part along with its off-the-shelf or made-to-specification.
  • Reference Designators are used in the case of printed circuit board assemblies (PCBAs) to explain where the part fits on the board in the BOM.
  • BOM Notes captures other important notes for everyone’s understanding and clarity about the BOM and product. For example, a list of alternate suppliers.

A single-level structure of BOM depicts the assembly and subassembly once or at one level with the required quantity. Whereas a multi-level structure of BOM depicts a further indented view of parent and child parts or assemblies needed to build the product along with the quantities.

For example, below are the two varieties of BOM of an office chair.

bill of material (BOM)
bill of material (BOM)

Indented bill of materials (BOM)

ItemPart numberQuantity
Office chair123-45671
-Back cushion65201
-Seat cushion89471
-Chair frame12451
--Base unit1245-21

Types of Bill of Materials (BOM)

There are several classifications of bills of materials. However, the two most critical and popular BOMs used for purchasing and supply chain management are the Engineering Bill of Materials (EBOM) and the Manufacturing Bill of Materials (MBOM).

The use of BOM varies based on the project under consideration and the requirements of the enterprises. The types of BOMs used in the manufacturing industry include the following:

  • Assembly BOM
  • Configurable BOM
  • Engineering BOM
  • Manufacturing BOM
  • Sales BOM
  • Service BOM
  • Template BOM

How to ensure an effective bill of materials or BOM management?

A high level of accuracy is expected for a BOM. A custom manufacturer must mention all possible details in the BOM to ensure efficiency in the production process. Therefore, creating the bill of materials is one of the steps in the product development process.

A final bill of materials is created after several iterations and involves several teams. While the spreadsheet is one of the modes to create a BOM, using an ERP system is the best solution for effective BOM management. Spreadsheets are prone to human errors, and version or revision tracking among various teams in the organisation becomes difficult. Whereas a future-proof cloud-based system ensures the availability of the latest version to the entire organisation. 

Using an ERP system also has multiple advantages due to integrating teams and collaborating for faster processing. It enables centralised control of the entire product record and ensures delivery of a superior quality product. It allows easy procurement of parts and other teams to plan well ahead of time. Hence, an ERP system is the best possible solution for effective and efficient BOM management.

BOM requires continuous monitoring throughout the lifecycle. Hence, it requires frequent reviews and revisions to deliver a quality result.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more


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