Raw materials play an essential role in manufacturing industries. Therefore, the Bill Of Material is vital to have proper inventory and for an uninterrupted production cycle.

In this article, you will get complete and well-researched information about BOM.

Bill Of Materials

What is Bill of Materials?

A bill of materials primarily consists of all the lists of raw materials, parts, components, assemblies, sub-assemblies, and all other items required to manufacture, repair, or reconstruct an item.

The number of materials needed, the time to be consumed, even the necessary amount of labor in each subpart to be arranged accordingly are available in a Bill of materials (BOM).

The Bill of materials definition generally says it is like a communication card between the planning and designing units and the manufacturing unit. Hence, it might also be a production recipe if required.

Multiple-level Bill of materials is when providing more essential details and information compared to single-level BOMs.  

Single Level Bill Of Materials
Multi-Level Bill Of Materials

Bill of materials Example

While building a racing bike, the builder will need an assortment of various tools required to make the bike from scratch.

Items like wheels, brakes, seat, handles, a pulley, a chain, plenty of small nuts, and screws, along with various other things.

A BOM for building a racing bike would also contain the quantities required for each of the items.

Based on the type of Bill of materials, it might also contain the steps to build up the bike and the labor and time consumed by each stage.

The BOM is like the basic blueprint to build, rebuild, or repair any item or product of interest. All the workers involved in the manufacturing and post-production processes must also be aware of the manufacturing BOM. It connects the various units required for the final product to be ready.

In this case, the final product is the racing bike. The bike preparation completes when assembling all parts of the bike and the seat, handles, and brakes.

Even one item missing might stop the product from being viable, such as the cycle here might not work without the chain, might not even start without the wheels, and might not stop without the brakes.

It is essential to know how to make a bill of materials to create the structure for any manufacturing unit.

How does the Bill of Materials help?

It is used in businesses mainly functions as the roadmap to the functioning of a finished product.

  • Plans the purchasing with the help of automation.
  • Keeps a tab on the total purchases of all the materials required sequentially, helping a cost-effective plan to materialize.
  • Maintains proper records and plans materials requirements.
  • It also helps in keeping a tab on inventory control, thus preventing and reducing waste.
  • Bills of materials designed for any product pave a path ahead and also allow scope for rising productivity and yield, thus resulting in more profit.

Key terms associated with Bill of Materials

Key terms of BOM

The inventory of terms related to the Bills of materials is an essential aspect of the management of BOMs. Therefore, it is necessary to understand this correctly.

BOM Children 

Children’s BOMs are more accurately known as assemblies, sub-assemblies, and parts or levels of BOM hierarchy. These subparts are mostly raw material requirements for a final finished product.

BOM Parents

Parent BOM or the central element in a hierarchical BOM, is the component that is present at the top.

Mentioned product descriptions and price for the parent from which branching of raw materials has been generated to give a hierarchical structure.

Phantom BOM

An item that is physically built but not stocked or creates into an inventory simply because it is an intermediate step and gets absorbed in some other process is known as a Phantom item.

Such BOMs are easily accounted for because only a demand for the following product justifies the existence of a phantom item.

Pseudo BOM

A Pseudo BOM generally refers to a more flexible form of the Bills of materials. As a result, mostly related and interchangeable groups with common attributes can be readjusted more suitably.

Planning BOM

A Planning BOM is also no different from the regular BOMs. It mostly comprises a summary of the items requires to produce a final thing.

It also plans on unforeseen demands that might arise over time.

Types of Bill of Materials

Types of BOM

There are various types of Bills of Materials used in manufacturing units, depending on the nature of the finished product.

A BOM is hierarchical, with the finished goods on the top along with print codes and manufacturing dates.

The following line consists of broad aspects of raw materials required. Separate BOMs have different designs and structures.

Manufacturing Bill of Materials

A manufacturing BOM is the most common type of BOM for a manufacturing company as it makes the functioning of a manufacturing unit smoother and more coordinated.

A manufacturing BOM or an mBOM displays all the assemblies and sub-assemblies of parts required to manufacture a final finished product.

A manufacturing unit works with other integrated units required to function several processing events required even before the manufacturing is done.

Hence, a reliable road map with all the information is provided along with the quantities. These quantities make it easier to order all the parts.

This also makes it easier to achieve a cost-effective strategy by negotiating the best possible price from the vendor.

Engineering BOM (eBOM)

An engineering BOM or eBOM is prepared during the design phase of any product.

A computer-based design is ready, along with detailed descriptions of products and parts required under their relationship with the final product, as depicted in the drawing.

A company can have more than one engineering BOM as there might be different angles to a product. 

For example, there might be a safety and maintenance angle to a product, and productivity and yield might be considered another angle.

When a BOM design is prepared by Electronic Design Automation (EDA) tools, all the prospective ideas regarding the product’s functioning need to be considered.

Questions like how does it function? How does it cope with malfunctions? How to make a cost-effective design? Need to be answered.

Service BOM

A service BOM consists of lists of items required by a service person for installing, repairing, or restocking products.

The service BOM consists of the information needed by the technician for performing their services.

These services could be at the site of business or the place of manufacturing. In addition, the company maintains Service BOM and is essential for the proper functioning of the product.

Sales BOM

A sales BOM comprises items that have been put upon sale. Items that are for selling, as well as stock, are listed within a Sales BOM with adequate product descriptions alongside every item.

Both the finished product and every part are required to have the final product functioning properly. In the case of a Sales Bill of materials, the critical fact is that all items listed here are not inventory, unlike the other Bill of materials.

Production Bill of materials

A production BOM is similar to a Sales BOM because it also consists of items along with their product descriptions and prices.

The items listed here are assemblies and sub-assemblies that ultimately will be converted into a finished product after the production process.

Single level bill of materials

This is the most simple and least complicated type of BOM. The Children or assemblies and materials required in the processing are only up to one level.

All the parts listed under the parent are required to produce the final product. Most small to medium businesses work with single-level BOMs.

Typically all the components needed are listed here as a broad category. However, it can add more levels based on the increasing complexity of the product design.

Multi-level BOM

A multi-level BOM is put to use in a more complicated product design where more parts and sub-assemblies are required. In this case, more than one level of children is listed under the final product.

It gives results to a more detailed and well-structured product design with specific descriptions for every aspect of the product.

The standard Bill of materials SAP system allows the use of individual and specific BOMs in an area.

How to create bill of materials?

The first step to creating a valid Bill of materials is the knowledge of your business inside out. Finding out all there is essential. Next, you must ask questions like, what am I manufacturing? How will I manage my BOM?

What are the components to be considered while creating a bill of materials?

The components to be considered while creating a bill of materials are BOM level, BOM notes, description, part number, part name, measurement unit, quantity, procurement type, phase, and requirement of BOM.

Components to be considered while creating BOM

BOM level

This is a ranking given to each part or assembly within the broader BOM. It makes it easier to refer to each component and allows them to be taken into consideration accordingly.

BOM notes

BOM notes are any information other than the required data.


Refers to the information about each material requirement along with the final product to be designed. It is comprehensive and informative.

It helps you distinguish between similar-looking parts and have an idea about each one’s functioning.

Part number

It is a number created for each item or assembly to identify items easily and quickly.

Part name

It is an easily identifiable unique name for each part to refer to each item separately.


It indicates the stage of each part in its production cycle.

Measurement Unit

It is a measuring unit of the items like inches, feet, ounces, drops, kgs, etc. It helps to track the correct quantities delivered to production.


It is the required amount of items for the ease of planning and maintaining the inventory levels.

Type of procurement

It is a document that tells how each part is purchased. It helps to increase efficiency in the manufacturing and procurement process.

The requirement for BOM

The idea of creating the BOM must be clear. Whether it is still in the planning phase, designing phase, manufacturing, or production phase, the goal to be fulfilled by the BOM eventually determines its course.

Software to be used

Most of the enterprise resource planning (ERP) solutions are available with BOM functionalities. In most of the modern cloud ERP solutions, it is a default functionality.

Maintaining an effortless BOM account is not as easy as it sounds. First, it makes choosing the right BOM software to create the seamless Bill of material you require.

Most companies use traditional software like Excel, but with the increased use of technology and complicated projects, specially designed BOMs are now available.

New technology is to develop advanced software with real-time monitoring capabilities along with other deeper functionalities.

Full functionalities with highly sensitive inventory tracking and smart status tags make modern-day Bill of Materials software unique. 

The Bill of materials software for small businesses can be specifically designed for your business or can be bought in a generalized form from the market entirely based on your requirements.

Managing your labor and other manual resources becomes seamlessly smooth. Moreover, it draws a lot of pressure from the system and provides scope for other opportunities, thus increasing productivity and performance. 

Bill of materials software free can be easily downloaded from the internet or used for a trial period to see if it suits your requirements.

You can later switch over to detail BOMs designed explicitly for your business. Many of the open-source ERP solutions have BOM functionalities in them.

Future of Bill of materials

With the advent of technologies, future generations will soon take over modern technologies due to more effective communications, flexibility, and scope for specificity.

The vision of OpenBOM is the beginning of real-time data collaboration and high-level data management.

The concept of OpenBom might give rise to a 24/7 global collaboration and synchronization, along with a hypersensitized network handling the significant workforce multiplied by many folds.

With OpenBOMs, a global initiative will be in sight, with instant data sharing, different teams, people, and groups accessing data from separate locations.

These new systems will give rise to a prospective future in data AI or Artificial Intelligence. Therefore, upgrading oneself with the changing technology is essential to stay relevant and in competition.


BOM or Bill of materials is a necessary part of your manufacturing procedure that cannot be left out whatsoever.

It is vital to consider all the information you can manage to figure out how to control the process and utilize the data.

Developing an efficient and seamless BOM is the stepping stone for a more detailed and valuable manufacturing process.


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