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Bill of Materials: Definition, Functions, Examples

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Most people have assembled something on their own, whether it was a bookcase, a bicycle, a gas grill, or a homemade computer. When they do, they often rely on an assembly manual showing all the parts that make up the item and how to use them. But what about a company making millions of items, perhaps mass-produced in different stages at dozens of facilities? In addition to making a finished product, that company also has to be concerned with finding enough resources, streamlining the product timeline, and controlling operating expenses. Given the complexity of the manufacturing process, a company needs a much deeper assembly manual — something like a product list, supply chain description, detailed item breakdown, and manufacturing process document all in one. This document is the bill of materials.

What is a Bill of Materials?

A bill of materials (BOM) is a list of all of the elements a manufacturer needs to make a product. It includes the raw materials, individual components, and procedures involved in production. Furthermore, a standard BOM is organized from the top down. The top part displays the finished product. Beneath it is a list of the subassemblies and below those are the individual parts needed to build each subassembly out. 

The part listing includes the item name, part number, description, and quantity needed to complete the component. 

Why Are BOMs Important?

The BOM is crucial because it establishes a standard for making a given product the same way every time. It lays out every item and step in explicit detail. Moreover, BOMs help manufacturers confirm that they have enough inventory of every part they need and that the assembly system can run as smoothly as possible.

When a company uses a contractor to build a product, the BOM it supplies helps to assure that the final item will be made exactly to their blueprints. 

Benefits of Bill of Materials

A BOM helps manufacturers and their contractors in several ways:

Purchasing Components

The BOM outlines the specific quantity of each part required to make the item, along with the steps for assembly. This ensures that the manufacturer receives the number of parts they need at the time they need them.

Cost Calculation

A good BOM is essential for accounting for the total production costs for an item. If the costs are properly tabulated, there’s a much better chance the producer can maximize profits and margins, potentially saving on taxes and overruns.

Inventory Control

With a detailed BOM in hand, a manufacturer can oversee their inventory to ensure they have all of the parts they need on hand. Ultimately, this can also limit inventory surplus and holding costs.

Production Improvement

A BOM outlines every step in the manufacturing process for an item. Continued use of BOMs can help to streamline workflow and show where improvement is needed.

Waste Cutback

A thorough, detailed BOM measures every incident and any waste generation. This makes it much easier to limit and control waste on a large scale.

Bill of Materials Example

To illustrate how to use a BOM, let’s make one up from a very basic example: a chair.

At the top of the BOM, you would simply put “chair.” Under that header, you might enter “back,” “seat,” “seat cushion,” and “legs.”

Each part is then broken down into the subcomponents that form it. For example, to make the seat cushion, you’ll need individual subcomponents like foam, fabric, binding materials, staples, and thread.

You’ll then need to enter information about each subcomponent. What specific brand and serial number of the foam will you use? How much of it? Where will you get it from? Are there any important things to know about it, like the presence of hazardous materials or delivery timelines?

That’s a simple example. More complex products, like semiconductors or automobiles, obviously have different bills of materials definitions, with deeper and longer entries that account for every manufacturing step. 

Types of Bills of Materials

There are many phases in the product development cycle. For maximum efficiency, manufacturers may choose to build different kinds of BOMs according to specific developmental stages they use.


An engineering bill of materials (EBOM) corresponds to the design stage of the product. The EBOM, which is usually drawn up by engineers, includes every item, part, and subassembly routine involved in the process. EBOMs come with a drawing of the final product, usually generated by computer-aided design (CAD) software.


The manufacturing bill of materials (MBOM) is used for the mass production of the item. It displays every part and process necessary for building a deliverable product, making allowances for packaging, item consumption, and waste production. It breaks down every stage in the manufacturing process, naming which parts will be needed for each phase.


The biggest difference between MBOMs and EBOMs is the scope of each. The EBOM is a bit more aspirational, as it relates to designing and building the product at an engineering level. It includes information on standards and design specs for the product and doesn’t necessarily get too far into the weeds of mass production.

Moreover, the MBOM, on the other hand, does just that. It goes into the smallest detail of every part, subcomponent, and assembly part needed to make multiple replications of the item, down to the tiniest screw. 

The MBOM is a deep document that describes how all of the components of a product interconnect and how much each item costs, as well as when and how they are used. 

Key Elements of Good Bills of Materials

A solid BOM displays the following information about every object used in the manufacturing of an item.

BOM Level

Entries on the BOM are arranged hierarchically: item, part, component, subcomponent, down to the tiniest detail. Each entry, therefore, includes an indicator of the level it represents, usually expressed as a decimal number (1, 1.1, 1.2, 1.3, etc.)

Part Number

Every part has an identifying number, often a manufacturer’s serial number, which allows manufacturers to find it easily. The part number must be unique for each part for easy recognition.

Part Name

Along with the number of the part, listing its name helps identify what it is.


The description goes into more detail about each material used in manufacturing. It defines specific traits, structure, and function of the part, primarily to distinguish it from other parts that may seem similar.


The BOM should explain what stage of the design or manufacturing process each part is used in.

Procurement Type

How is the part acquired — is it bought from an outside vendor or produced in-house? Each line item on the BOM should explain how the manufacturer gets it.


The BOM indicates how many of the parts are needed for the product — this helps to manage purchasing.

Unit of Measure

The BOM must clearly describe how each item is measured — by size, weight, height, or width. It then must name the unit of measurement: pound, ounce, inch, feet, meter, kilometer, and so forth.

BOM Notes

Finally, the BOM should include supplemental information that will be helpful to those using each part, like instructions or warnings. 

Key Questions to Answer When Creating a BOM

The bill of materials should serve as a catch-all reference for any matters or issues about the manufacturing process. When completing a BOM, use these questions as a kind of checklist to make sure it’s complete and correct.

Are There Mass-Quantity Consumables that Need to Be Itemized?

Everyday items that are necessary for manufacturing are sometimes overlooked in a BOM, including paper, glue, labels, binding tools and agents, and so forth. These items must be treated like any other part in the BOM — meaning they need to be listed on it as well.

Are There Files that Must Be Attached to Your BOM?

CAD illustrations, spreadsheets, documentation, and subassembly directions are supplemental pieces of information that can be helpful in understanding each item. If applicable, attach these files in the proper place for each BOM-level item.

Who Will Use the BOM?

Think about all of the individuals on the development and supply chains who are likely to use the BOM. The bill should include information that all these parties will be looking for, detailed for every stage in the process.

How Will You Track BOM Revisions?

Like most other institutional documentation, a BOM will probably be drawn up in several drafts. Have a system in place to track all of the changes throughout the development of the BOM, and make sure each draft has its own version number. 

How to Make BOMs Quickly and Effectively

There are two ways to approach BOMs. One is single-level, which is simply a list of each part or component, along with how many of each is needed. 

However, single-level BOMs may only be helpful for purposes of a quick summary. They don’t reveal the connection or relationships between all parts and processes of assembly.

Multi-level BOMs are thoroughly detailed from the top-down, linking every part and step with its place in the manufacturing process. A solid multi-level BOM serves as the “bible” of the product, covering all production stages, components, details, and issues about manufacturing.

Since the BOM is hierarchical, consider using an outline process to make it. The finished product should go right at the top, with individual components of the product indented underneath it. 

Within those components, list the individual subcomponents or items used to construct each one, indented another space over. You can also break each product down by manufacturing step or phase, filling in all of the identifying details (part number, quantity, description, etc.).

Spreadsheet software like Excel lends itself to the BOM process well. You may also find online applications or software specifically geared toward drawing up documents like BOMs. 

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