A well-defined bill of materials is a critical part of any product development process. It can help businesses plan material purchases, estimate costs, control inventory and reduce waste.
The BOM can be presented in several formats. For example, engineering bills of materials (EBOMs) define assemblies and parts as designed by the engineering department.
Engineering
Whether you’re building a toy or a rocket, a bill of materials (BOM) is an essential tool for any manufacturer. It’s a comprehensive, structured list that includes raw materials, components, sub-assemblies, and subcomponents needed to manufacture the product. It also includes the necessary quantities for each item. A BOM is an invaluable tool that plays a critical role in product design, manufacturing, and sourcing.
Engineers typically use software solutions like computer-aided design (CAD) to prepare an engineering bill of materials, or EBOM. An EBOM defines the parts and assemblies designed by an engineering department and lists the raw materials, components, and assembly-specific items. It’s important to note that an engineering bill of materials doesn’t include information on packaging or labeling, which are part of a manufacturing bill of materials.
A construction project team may use different types of BOMs depending on the project. For instance, a construction team might organize the bill of materials by stage, such as foundation, framing, electrical, and plumbing. This helps them manage resources effectively and minimizes delays. In addition, it helps them determine task sequencing to ensure that materials are available when needed. A BOM is also helpful for calculating project costs. It should contain accurate, detailed information, including part names, quantities, and unit costs. It should also indicate revisions and dates to keep track of changes.
Manufacturing
Imagine constructing a building without a blueprint or cooking a complex recipe without an organized list of ingredients. This is essentially what it’s like for a business to manufacture or build products without an accurate bill of materials (BOM).
The BOM is a centralized source that displays the parts, components and materials required to create a finished product. It is a hierarchical structure that starts with the highest level of the completed product and then breaks it down to individual components and raw materials. It can be presented as an explosion display or implosion display, and is typically compiled by the engineering department overseeing a project.
There are several different types of bills of materials, including engineering, sales and manufacturing BOMs. The engineering bill of materials (EBOM) defines a product from an engineering perspective and is often created based on computer-aided design or CAD drawings as part of the design process. It is then sent to suppliers for quotations.
A sales bill of materials is used for products that are configurable by the customer in the sales stage. For example, a shoe manufacturer may allow customers to choose their preferred size and style using in-store configurator software. The resulting sales order would then list the parent-level item “Shoe X” and then all the child-level items that are needed to make that specific product, such as the custom 3D printed insole for a precise fit or the fabric and shoelaces chosen by the customer.
Purchasing
BOMs are centralized sources of product information. Often shown in a hierarchical manner, a BOM presents a complete breakdown of the components needed to manufacture a product. The two main types of BOMs are engineering bills of materials (EBOMS) and manufacturing bills of materials (MBOMS).
Whether it’s for construction or manufacturing, a well-prepared bill of materials serves as a blueprint that guides projects through the assembly and procurement processes. By providing detailed specifications, BOMs help ensure that all required materials are in-house when needed and at the correct quantities for production. This helps minimize inventory inaccuracies and reduces production delays.
Additionally, a BOM can include crucial information about each item, such as part numbers, unique descriptions, lifecycle status, approval status, pricing, unit of measure, supplier information, and the manufacturer’s manufacturing process. This information is critical to the accuracy of costing, planning, and other business functions.
Additionally, by specifying the exact quantity of each material needed, a BOM can facilitate bulk ordering and even result in potential cost savings through discounts. Finally, by enabling construction professionals to accurately identify the best and most sustainable materials for use on a project, a BOM can help promote environmentally friendly practices throughout the construction process.
Finance
BOMs help companies save money by ensuring that the right items are in-house at the right time during production. They also improve decision-making, prevent errors and increase supply chain resiliency. BOMs are often the primary source of data for product costing, material requirements planning (MRP) and enterprise resource planning systems.
A manufacturing bill of materials (MBOM) is a detailed list of all the raw materials, sub-assemblies and finished parts required to manufacture or build a product. It shows the assembly sequence as well as work-center data. It is also shared with integrated business systems such as enterprise resource planning (ERP) and manufacturing execution systems.
It is easy to assume that small manufacturing companies do not need structured and well-crafted bills of materials because they have fewer products or a limited number of components. However, a good quality BOM is essential for companies of any size because it provides a centralized source of truth and helps multiple teams collaborate effectively across departments.
A configurable BOM is similar to an MBOM, but it lists only the items that can vary from the product’s original design. For example, if a company produces a table in different colors, the configuration BOM will only include the pieces that can be used to create each color. This allows the company to control costs by reducing the number of parts it needs to produce each version.