Bill of Materials (BOM) Creation

By Annapoorna


Updated on: Apr 5th, 2022


4 min read

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A product is made up of various components and materials. However, it is important to have the right balance and blend of materials to produce a viable product. A Bill of Materials (BOM) is one such document that contains the list of items such as documents, drawings, parts, and items necessary to design or engineer a product.

Steps to create a Bill of Materials (BOM)

Raw materials, components, assemblies, and all other items involved in the makeup of a product form part of the list that makes up the Bill of Materials. The steps involved are as follows:-

(1) Answer the critical questions

Certain questions need to be answered before the BOM is built.

  • What are we building?

It is important to have the design to create a successful BOM. Although the design may change over time, a general idea of what parts will constitute the end product will be necessary to build an effective BOM.

  • How will the BOM be managed?

The BOM will constantly be updated and revised as and when needed. Before this, a system needs to be established to manage and update the BOM. The system must also identify the difference in the various versions of the BOM.

  • Who is allowed to access and use it?

Access to the BOM must be given to a select few personnel only. Various people in the organisation will likely use the BOM for different purposes. However, it is important to identify these parameters to ensure the effectiveness of the document.

  • What information can we include in it?

Essential information such as the name and number of the parts, the quantity and unit of measure, etc., have to form part of the comprehensive list that makes up the BOM. 

  • How should we organise the BOM?

The information displayed in the document must be presented to differentiate between the parent and child parts. The various levels of assemblies and sub-assemblies must be depicted in a clear, structured manner that is easy to follow.

  • What programmes shall we use for the BOM?

Businesses commonly use Excel as a default application for the BOM. However, as the business grows and the processes become more complex, it would make more sense to opt for an advanced programme designed for BOMs.

(2) Document creation

Once the questions are answered, creating the BOM on a spreadsheet commences. The file must be named appropriately to identify the document with ease.

(3) Document organisation

Deciding and filtering the access controls to authorised personnel is the next step. Since BOM is an ongoing process, the organisation of the BOM document will carry on all through the process consistently.

(4) Column and row filling

The columns will contain headers for the various categories such as the parts, quantity, assemblies, unit of measurement, etc. The rows will be filled in with the information corresponding to the columns. It is vital that this information is accurate and filled up consistently.

(5) Regular updates

Since BOM is an ongoing process, updating this document is also continuous. A record of the changes has to be maintained. Each document version may be saved with a different filename for identification purposes.

Tips for creating an effective Bill of Materials (BOM)

The following elements will ensure the creation of an effective BOM:-

  • BOM level

This helps the user understand the elements of the BOM based on their ranking. The ranking determines the place of the element in the BOM hierarchy.

  • BOM notes

Additional information is essential to the understanding of the elements of the BOM.

  • Part number

Identifying the parts becomes relatively easy and saves time when each part is assigned a unique part number.

  • Part name

Similar to the part number, the part name is a unique name given to a particular part that makes the identification process smooth.

  • Description

A detailed explanation or additional information regarding a particular part or material of the BOM helps the user understand what role that particular material plays in the product build.

  • Phase

The phase is where the product is in its life cycle. For instance, a part that is in the process of being completed may be identified with an “in production” phase tag.

  • Quantity

Quantity refers to the number of such parts required to be used in the product buildup.

  • Unit of measure

Inches, feet, kgs, tonnes, etc., are the various units of measure used. They function as quantity identifiers.

  • Procurement type

This tells the document user whether that particular material is manufactured in-house or purchased from a vendor.

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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