bill of materials (BOM)

A bill of materials (BOM) is a comprehensive inventory of the raw materials, assemblies, subassemblies, parts and components, as well as the quantities of each, needed to manufacture a product.

In a nutshell, it is the complete list of all the items that are required to build a product. A BOM is sometimes also referred to as a product structure, assembly component list or production recipe (in process manufacturing industries).

Take, for example, a bicycle manufacturer that wants to build 1,000 bicycles. A bill of materials for a bicycle will include all the parts that make up the bicycle such as seats, frames, brakes, handlebars, wheels, tires, chains, pedals and cranksets, including the quantities required of each component and their cost.

A well-defined BOM helps companies:

  • Plan purchases of raw materials
  • Estimate material costs
  • Gain inventory control
  • Track and plan material requirements
  • Maintain accurate records
  • Ensure supply robustness and reduce waste

BOM structure

Typically, a BOM is hierarchical in nature, with the finished product at the top. It includes product codes, part descriptions, quantities, costs and additional specifications.

Single-level bill of materials

Among the most common methods of representing a BOM are the following:

  • Single-level bill of materials, which is a relatively simple list for a product. In this type, each assembly or subassembly is shown only once, with the corresponding quantity required of each to make the product. Though easy to develop, this type of BOM is unsuitable for complex products because it does not specify the relationship between parent and child parts or between assemblies and subassemblies. If the product fails, a single-level BOM makes it difficult to determine which part needs to be replaced or repaired.
  • Multilevel bill of materials, which takes more work to create but offers greater details and specificity on the parent and child parts in the product. In a multilevel BOM, the total material required is shown. Additionally, the product structure is indented to show the relationship between the parent and child product, as well as assemblies and subassemblies.
Multilevel bill of materials

A BOM serves as the foundation of production planning systems, and the information in it provides the basic data for other business processes, such as manufacturing resource planning, product costing, material provision for production and plant maintenance.

Since the BOM combines all possible information that goes into building a final product, it finds wide use in departments beyond manufacturing, such as engineering, design, sales, material management and plant management.

Types of bills of materials

There are three main types of BOMs to be aware of:

Manufacturing bill of materials. A manufacturing BOM (MBOM) includes a structured list of all the items or subassemblies required to make a manufactured, shippable finished product. An MBOM, in addition to the information on individual parts, also includes information on the parts that require processing prior to assembly and explains how various components relate to one another in a product. The information in the MBOM is then shared with all the integrated business systems involved in ordering and building the product, including enterprise resource planning (ERP), material requirements planning (MRP) and, in some cases, a manufacturing execution system (MES).

Engineering bill of materials. An engineering BOM (EBOM) defines assemblies or parts as designed by the engineering department. Showing the component structure from a functional perspective, an EBOM, for example, will consist of a mechanical or technical drawing of a product. An EBOM is typically developed by engineers using computer-aided design (CAD) or electronic design automation (EDA) tools, and it is common to have more than one EBOM for a product as the design undergoes a series of revisions.

Sales bill of materials. A sales BOM (SBOM) defines a product in the sales stage, meaning details of the product prior to assembly. In an SBOM, the list of finished products and the components required to develop it appear separately in the sales order document. Here, the finished product is managed as a sales item instead of an inventory item.

It's important to note that each type of BOM will involve a different structure and level of detail. For example, an EBOM may list parts related to a specific function of the product, such as chips for a circuit board. An MBOM, by definition, lists every material that goes into manufacturing a product.

Creating a BOM in SAP

SAP offers well-known functionality to create various BOMs. Legacy users have been able to use BOMs created through SAP R/3 and ERP Central Component, and SAP HANA continues that functionality.

For example, SAP S/4HANA allows companies to create advanced versions of BOMs for complex assemblies and speed up time to market through specification of work center details within a BOM.

This was last updated in April 2018

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