What is a Bill of Materials (BOM)?
A bill of materials (
) is a structured list of the raw materials, components, subassemblies, intermediates, quantities, and other items required to manufacture, assemble, maintain, or repair a finished product. It works like a recipe for manufacturing: it tells procurement, engineering, production, and quality teams what exactly is needed, in what amounts, and sometimes how items relate to each other.
Core elements of a BOM
– Item/Part number: unique identifier for each component.
– Description: short text describing the item.
– Quantity per assembly: units of that part needed to make one finished unit.
– Unit of measure: pieces, meters, kilograms, etc.
– Reference designator/location: where the part is used (common in electronics).
– Procurement type: purchased vs. manufactured in-house.
– BOM level or hierarchy: indicates the position in an assembly breakdown (level 0 = finished product).
– Revision/version: BOM change control identifier.
– Notes/specifications: material grade, supplier info, alternate parts, lead times, etc.
Types of BOMs (common classifications)
– Engineering BOM (EBOM): structured from a design/engineering view; emphasizes functional relationships and specifications.
– Manufacturing BOM (MBOM): tailored for production; includes packaging, kitting, consumables, and factory-specific routing.
– Sales BOM: bundles sold as a single unit but fulfilled as separate parts.
– Service/Spare-parts BOM: parts and assemblies needed for maintenance and repairs.
– Single-level vs. multi-level BOM: single-level lists components directly under one assembly; multi-level shows subassemblies decomposed recursively.
How BOMs are used (practical processes)
– Procurement: calculate purchase quantities and place supplier orders.
– Costing: roll up component costs to estimate product cost.
– Production planning: generate material requirements planning (MRP) forecasts and shop orders.
– Quality & compliance: trace materials for regulatory or warranty purposes.
– Change control: manage design revisions and communicate impacts across departments.
Worked numeric example: basic cost roll-up
Assumptions:
– Finished product P requires: 2× Component A, 3× Component B, and 1× Subassembly C.
– Component A unit cost = $4.00; Component B unit cost = $1.50.
– Subassembly C is itself built from 5× Part D at $0.80 each (no further levels).
– Manufacturing scrap/waste allowance = 5% on purchased components.
– Direct assembly labor = 0.25 hours per finished unit at $20/hour.
– Factory overhead applied as 30% of direct labor and material cost.
Step 1 — component material costs (per finished unit)
– A: 2 × $4.00 = $8.00
– B: 3 × $1.50 = $4.50
– D in subassembly C: 5 × $0.80 = $4.00 → subassembly C material = $4.00 (assume no additional processing cost)
Subtotal material = $8.00 + $4.50 + $4.00 = $16.50
Step 2 — add scrap allowance (5%)
– Scrap adjustment = $16.50 × 0.05 = $0.825
Material with scrap = $16.50 + $0.825 = $17.325
Step 3 — labor cost
– Direct labor = 0.25 hr × $20/hr = $5.00
Step 4 — overhead
– Base for overhead = material with scrap + direct labor = $17.325 + $5.00 = $22.325
– Overhead = 30% × $22.325 = $6.6975
Step 5 — total unit cost
– Total cost = material with scrap + direct labor + overhead = $17.325 + $5.00 + $6.6975 = $29.0225 ≈ $29.02
Formulas (summary)
– Material subtotal = Σ (quantity_i × unit_cost_i)
– Material with scrap = Material subtotal × (1 + scrap_rate)
– Direct labor = labor_hours_per_unit × labor_rate
– Overhead = overhead_rate × (Material with scrap + Direct labor)
– Total unit cost = Material with scrap + Direct labor + Overhead
BOM best-practice checklist (for teams)
– Use unique, persistent part numbers and consistent naming conventions.
– Maintain single source of truth (an ERP, PDM, or PLM system) to avoid parallel BOMs.
– Enforce change control: record who changed what, why, and effective date.
– Include alternates and approved vendors where appropriate.
– Capture units of measure and conversion factors explicitly.
– Link drawings, CAD models, and test specifications to BOM items.
– Periodically review for obsolete parts or preferred-parts consolidation.
– Train cross-functional stakeholders on BOM interpretation.
Software and integration
– Many organizations manage BOMs inside ERP (enterprise resource planning) systems (e.g., SAP, Oracle) or product lifecycle management (PLM) and product data management (PDM) tools.
– Key integrations: CAD/PLM ↔ BOM to transfer engineering changes; BOM ↔ ERP/MRP for procurement and production; supplier portals for lead-time and pricing updates.
– Controls to seek in software: revision history, permissions, BOM comparison/diff tools, and multi-site BOM capability.
Common pitfalls and how to avoid them
– Fragmented BOM sources: centralize data to prevent mis-picks and production delays.
– Missing non-part items: include consumables, adhesives, labels, and packaging if they affect production or cost.
– Ignoring lead times: record supplier lead times and lot sizes to feed MRP correctly.
– Poor revision discipline: tie BOM changes to ECOs (engineering change orders) and communicate broadly.
When to use single-level vs. multi-level BOMs
– Single-level (flattened) is useful for simple procure-to-assemble workflows or when doing quick cost estimates.
– Multi-level is essential when subassemblies are manufactured and stocked or when detailed routing and work centers are required.
Traceability and regulatory considerations
– For regulated industries (medical devices, aerospace, food), BOMs must support traceability to batches, lot numbers, and raw material certificates.
– Maintain records for recalls, audits, and conformity declarations.
Quick action plan to create or clean up a BOM (step-by-step)
1. Inventory: compile all parts, drawings, and supplier data.
2.