Every manufacturing company or business that needs to have something manufactured and repaired must have a bill of materials (BOM). No manufacturing process will be complete without one.

So, what is it?

Bill of Materials – What Is It?

A BOM is a comprehensive list of materials, their parts, and components required in the manufacturing of products. Comprehensive is a crucial descriptor, meaning it must include all critical details, such as quantities, prices, and descriptions.

It is also called an assembly component list, product recipe, or product structure. All of these terms describe its essence.

For example, a company manufactures laptops. The BOM should list all the major parts: CPU, motherboard, keyboard, battery, RAM, touchpad, optical drive, storage device, cooling fan, speaker, and monitor. Under each listed part are the components within them, and each should have detailed descriptions that include the quantity and the price of each.

Types of BOM

There are two types of BOM: single-level and multi-level bill of materials.

Single-Level

This is a BOM in its simplest form and is reminiscent of a shopping list. It merely enumerates the assembly and sub-assembly parts and their quantities.

A single-level BOM doesn’t show the relationship between the parts, which makes it difficult to identify the causes of assembly failure.

Multi-Level

This outlines the relationships between assemblies and sub-assemblies. It is sometimes referred to as an indented bill of materials—the indentions signify sub-assemblies or the components that make up an assembled product.

Forms of BOM

There are two general ways to structure a BOM: explosion and implosion displays.

Explosion Display

This shows the highest level of the product. Back to the laptop example, a BOM may list the CPU at the top and break down its components into the following: control unit, arithmetic logic unit, registers, cache, buses, and clock. Then each of these components is further broken down into granular levels.

The complete bill of materials will look like all the components exploded from the CPU at the top.

Implosion Display

This is the opposite of the explosion display, wherein the smaller components are listed at the top and are linked to the bigger parts.

The Key Elements of a BOM

When creating a BOM, the following elements must be present:

1. BOM Level

The BOM is generally hierarchical. The BOM level is a ranking or number that identifies the level where the part belongs in the hierarchy. It will also help determine if the part is single or multi-level.

2. Part Name

This is the unique name of each item of the assembly. It is always paired with a set of numbers.

3. Part Number

This is a unique set of numbers that serves as a particular component’s identification. It allows those within the production line to easily find the item.

In some cases, the part number includes an additional element to make it even easier to identify and is referred to as an intelligent part number. For example, the components of a CPU may have the following part numbers: CPU-001, CPU-002, etc.

4. Quantity

This answers the question: how many pieces of a particular component are needed in the assembly?

For example, a CPU usually requires 1 – control unit, 1 – arithmetic logic unit, 8 – registers, 1 – cache, 3 – buses, and 1 – clock.

5. Unit Measure

This refers to the unit of measure for each part. In the same laptop example, the appropriate unit of measure is just “piece,” i.e., 1 piece of clock, 8 pieces of registers, etc.

More common units used are grams, kilograms, centimeters, inches, liters, feet, square feet, and cubic feet.

6. Phase

This refers to the stage the item is in. It could be “in design” or “in production.”

7. Procurement Method

This identifies how an item is obtained, whether internally produced or purchased from a third party.

8. Description

The description adds more important details in the bill of materials to avoid confusion during the assembly process. This is particularly helpful when many parts are similar to each other.

9. Images

Diagrams and photos visually represent how the product is manufactured and assembled. They help those in the assembly line better understand the items and their usage.

10. BOM Notes

The notes section provides additional relevant information about the product. This is where you can include possible alternatives in case a specific item is not available.

Why Do You Need a Bill of Materials?

Organization leads to stability and efficiency. Just as every business needs to maintain a robust inventory management system, manufacturers need BOM—both bring order to the organization and its many complex processes.

Here are some reasons why it is a must-have:

Accuracy

In manufacturing, one small mistake could have massive consequences for the rest of the production line. A complete bill of materials provides a detailed inventory of each item needed to ensure a smooth and accurate production process.

Efficiency

It may seem like a simple list, but its comprehensiveness is crucial to ensure all needed pieces are in place for manufacturing. Every step becomes faster and more efficient.

Zero to Minimal Waste

It provides a complete picture of the process, which helps avoid waste. No component will be wasted when you know exactly what item is needed to complete a part. And if mistakes happen, at least, waste is likely to be minimal.

Manage Production Cost

When you avoid waste, you save money for the company. BOM is crucial for managing production costs because the itemized list will help the company create a close-to-accurate budget.

How To Make an Effective BOM

A BOM must be comprehensive, detailed, and accurate to be effective. Creating it manually can be a headache. This is why you should invest in software to streamline the process.

Nest Egg will help you manage your business inventory and, in the process, make it easier for you to create an accurate bill of materials. You can easily stay on top of the manufacturing process through its simplified data entry and intuitive layouts.