What is a bill of materials?
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.
BOMs also include the instructions for procuring and using the materials. A BOM is sometimes referred to as a product structure, assembly component list or production recipe (in process manufacturing industries).
For example, if a bicycle manufacturer wants to build 1,000 bicycles, the bill of materials will consist of all the individual parts needed to build the bicycle. The list would include the seats, frames, brakes, handlebars, wheels, tires, chains, pedals and cranksets, as well as the quantities of each component and their cost. BOMs can be created using physical products or a software-as-a-service bill of materials product.
What are the advantages of using a BOM?
A BOM makes the manufacturing process accurate and efficient. It lays out a detailed plan that can be easily followed.
A well-defined BOM helps companies with the following aspects of the production process:
- plan purchases of raw materials;
- track and plan material requirements;
- estimate material costs;
- manage inventory;
- stay alert to materials shortages, expediting charges and planned and unplanned downtime;
- control budget;
- stay on schedule;
- maintain records;
- reduce waste;
- identify the cause of a product failure;
- replace faulty components fast;
- find vulnerabilities in software components; and
- improve supply chain security.
BOMs help ensure third-party contract manufacturers are using efficient and accurate when production methods.
BOMs are also useful for companies that run lean production and continuous improvement-based processes. One goal of lean manufacturing is to minimize waste. The upfront blueprint that a BOM provides helps avoid wasteful production errors.
A BOM typically has a hierarchical structure with the finished end product at the top. It includes product codes, part descriptions, quantities, costs and additional specifications.
Among the most common methods of representing a BOM are single-level BOMs and multilevel ones.
Single-level bill of materials
This is a simple list with each assembly or subassembly needed for a product shown once, with the corresponding quantity required for each product. This is an easy BOM to develop. However, this type of BOM is unsuitable for complex products because it does not specify the relationship between parent and child parts and between assemblies and subassemblies. If a new product fails, a single-level BOM makes it difficult to determine which part needs to be replaced or repaired.
Multilevel bill of materials
This BOM approach requires 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. And the product structure shows the relationship between the parent and child product, as well as assemblies and subassemblies.
A BOM is the foundation of production planning systems. The information it provides includes the basic data for business processes, such as manufacturing resource planning, product costing, material provision for production and plant maintenance.
The BOM combines all the information that goes into building a final product. As a result, it is used in departments other than manufacturing, such as engineering, design, sales, material management and plant management.
Types of bills of materials
The three main types of BOMs are the following:
- Manufacturing. A manufacturing bill of materials (MBOM) includes a comprehensive list of all the items and subassemblies required to make a manufactured, shippable finished product. An MBOM also includes information about the parts that require processing prior to assembly and explains how various components in a product relate to one another. The information in the manufacturing BOM is 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.
- Engineering. An engineering bill of materials (EBOM) defines assemblies and parts designed by the engineering department. The engineering BOM shows the component structure from a functional perspective and consists of a mechanical or technical drawing of a product. Engineers using computer-aided design or electronic design automation tools typically create the design. It is common to have more than one EBOM for a product as the design is revised.
- Sales. A sales bill of materials (SBOM) defines the details of the product prior to assembly in the sales stage. In an SBOM, the list of finished products and the components required to develop it appear separately in the sales order document. The finished product is managed as a sales item rather than an inventory item.
Each type of BOM will vary in 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 lists every material that goes into manufacturing a product.
Other types of BOMs include the following:
- Configurable BOMs are used in industries with multiple options and highly configurable products. Configurable BOMs are designed to meet unique customer specifications and identify the building materials, labeling and packaging materials. Examples of configurable products are PCs, cars and data center hardware or software.
- Production BOM is another name for the first half of the MBOM. It is a structured list of all components and subassemblies used in the production of a parent item. It is also the basis of a production order.
- Assembly BOM is the name for what's included in the second half of the MBOM. They list the parent as a sales item rather than an inventory item.
- A template BOM provides a standardized list of components for items that are regularly serviced. The components represent the subcomponents of the object being serviced. This type can be used to track which subcomponents have been serviced or replaced.
- Software BOMs list the components of a piece of software, which may consist of a mix of commercial and open source products. SBOMs enable developers to ensure disparate software components work together, are up to date and protected from vulnerabilities.
What's needed to create an effective BOM?
An effective BOM includes the following 11 core components:
- Levels. A bill of materials often contains several levels. The BOM level number explains where the part fits into the BOM hierarchy.
- Part name. A record of a part name helps manufacturers identify parts and provides information about them.
- Part number. Part numbers are used as shorthand to refer to and identify parts. An intelligent or significant part number denotes some information about the part. An insignificant or nonintelligent part number is an arbitrary number assigned to a part. For example, a screw might have an intelligent part number of HSC0424OP. The H means hardware, the S stands for machine screw, the C0424 refers to the length of the screw, and OP refers to the screw's head style. The same screw in an arbitrary numbering system may use the serial number 000383487349, which has no additional meaning beyond identifying the screw.
- Manufacturer name. Listing the manufacturer's name helps identify a part.
- Part phase. This indicates where each part is in the product lifecycle. For example, a new part would be in the unreleased or in-design phase. A revision level is sometimes included in the part phase to indicate the version or revision of the part.
- Alternate parts. This tells the reader whether a part can be swapped for another one if the original part is unavailable.
- Priority analysis. This defines which parts are critical and helps users prioritize purchasing. For example, components with higher monetary values and longer lead times might get priority.
- Description. This provides details of each part and helps the reader distinguish among similar parts by color and dimensions.
- Quantity. This indicates the number of components needed. A unit of measurement should be defined for each part type.
- Procurement specification. The procurement specification describes how parts are purchased and made. The designations P, M and C are often used -- they stand for purchased, modified and custom.
- Comments and notes. This is a place to document unexpected changes and take notes as the project takes shape. Notes may include images and diagrams of a part or assembly.
Creating an effective bill of materials is part of sound supply chain management. Supply chain management is a core component of ERP and MRP. Learn more about enterprise resource planning and key features of ERP systems with this complete guide.