What is a Bill Of Materials?
A bill of materials (BOM) is a comprehensive and hierarchical list of components, materials, and assemblies required to construct a product.
Commonly used in retail and manufacturing, a BOM contains the inventory of all parts used in the making or assembly of a product, including the quantity, description, and any other relevant information. It may also include diagrams or drawings that illustrate how the parts fit together.
Depending on the product, this may include:
- Mechanical elements (e.g., hardware, motors)
- Electronic components (e.g., integrated circuits, resistors, PCBAs)
- Raw materials (e.g., lumber, steel)
- Software
- Tools and equipment
- Related documents, drawings, and instructions
The BOM lists any sub-assemblies needed to create higher-level assemblies and indicates their component parts. That way, when ordering parts, the manufacturer can easily identify and purchase the components that make up a given assembly.
When properly maintained and regularly updated, it serves as a valuable tool for controlling inventory, managing orders, and streamlining production.
And when integrated with a company’s ERP system, it can even provide real-time insight into the status of product construction and alert managers when an item is running low or needs to be restocked.
Synonyms
- BOM
- Product recipe
- Product structure
- Assembly component list
BOM Structures
There are two kinds of BOM structures: single-level and multi-level. Every component of the product catalog will use one or the other, and it all comes down to complexity.
Single-Level BOM
A single-level bill of materials (SLBOM) lists all components required to assemble a product, but none of its subassemblies. It includes each part, item needed, quantity, and specifications.
Single-level BOMs are mostly used for simple products that consist of a few components.
For example, a single-level BOM for an alarm clock may include the following parts:
Single-level BOM example
| BOM level / Part # | Description | Qty | Unit cost | Extended cost |
|---|---|---|---|---|
| 0 / ST-000 | Wooden side table (finished product) | 1 | – | – |
| 1 / ST-101 | Tabletop panel (18″x18″ oak) | 1 | $22.00 | $22.00 |
| 1 / ST-102 | Leg set (4 pre-cut oak legs) | 1 | $28.00 | $28.00 |
| 1 / ST-103 | Steel brackets | 4 | $1.10 | $4.40 |
| 1 / ST-104 | Wood screws (#10) | 12 | $0.05 | $0.60 |
| 1 / ST-105 | Clear protective finish | 1 | $3.00 | $3.00 |
| Total material cost: $58.00 |
In this example, you can see exactly what goes into building the finished table at a glance. Every part sits on the same level and there’s no need to dig through subassemblies or nested structures to understand the build.
Multi-Level BOM
A multi-level bill of materials (MLBOM) is used for complex products that require multiple sub-assemblies to create a higher-level assembly.
It provides a hierarchical view of the parts needed to construct a product, outlining all component parts and sub-assemblies required for each level of assembly.
For example, an MLBOM for the same alarm clock may include:
Multi-level BOM example
| BOM Level / Part # | Description | Qty | Unit Cost | Extended Cost |
|---|---|---|---|---|
| 0 / ST-000 | Wooden side table (finished product) | 1 | – | – |
| 1 / ST-200 | Tabletop Assembly | 1 | – | – |
| 2 / ST-201 | → Oak tabletop panel | 1 | $22.00 | $22.00 |
| 2 / ST-202 | → Clear protective finish | 1 | $3.00 | $3.00 |
| 1 / ST-300 | Leg Assembly | 1 | – | – |
| 2 / ST-301 | → Oak leg (front left) | 1 | $7.00 | $7.00 |
| 2 / ST-302 | → Oak leg (front right) | 1 | $7.00 | $7.00 |
| 2 / ST-303 | → Oak leg (rear left) | 1 | $7.00 | $7.00 |
| 2 / ST-304 | → Oak leg (rear right) | 1 | $7.00 | $7.00 |
| 2 / ST-305 | → Screws (#10) | 8 | $0.05 | $0.40 |
| 1 / ST-400 | Steel brackets | 4 | $1.10 | $4.40 |
| 1 / ST-401 | Screws (#10) | 4 | $0.05 | $0.20 |
| Total material cost: $65.40 |
In this example, you can see how each level of the BOM rolls into the one above it, making the structure easy to follow and much easier to maintain than a flat list. Depending on product complexity, you might need three, four, or even five BOM levels.
Types of BOMs
There are multiple kinds of bills of materials—most of which are either industry- or organization-specific.
Engineering (EBOM)
Engineering BOMs are primarily created and managed by engineers during the product design phase.
They guide the development of a product, ensuring all required components are accounted for and that the design is feasible from a manufacturing perspective.
Manufacturing (MBOM)
A manufacturing BOM (MBOM) is a detailed list of components, materials, and assemblies required to produce a product.
Unlike the engineering BOM (EBOM), which focuses on the product’s design, the MBOM is tailored to the manufacturing process and serves as the basis for work instructions, production routings, and resource requirements.
MBOMs are typically created by manufacturing engineers or production planners, who convert the design-focused EBOM into a format optimized for efficient production.
Sales (SBOM)
A sales BOM (SBOM) is an inventory-oriented list of all the components, raw materials, and assemblies required to assemble a product for order fulfillment.
SBOMs are used by sales teams to accurately determine costs and pricing for products that are offered for sale.
Configurable BOM
A configurable BOM (CBOM) is flexible and adaptable based on specific customer requirements or preferences.
They are used primarily in industries where configurable products have numerous options, variations, or modular designs, such as automotive, consumer electronics, or furniture manufacturing.
Software BOM
Software BOMs are comprehensive lists of software components, libraries, and dependencies used in a software application or system.
They include information about each component’s origin, version, and licensing terms, as well as any known vulnerabilities or security risks.
SBOMs play an essential role in managing and maintaining complex software systems, ensuring compliance with licensing requirements, and mitigating security risks.
BOM Displays: Explosion vs. Implosion
Explosion and implosion views show you the same product data from two different angles. One zooms out, the other zooms in.
Explosion display
An explosion view breaks the product down into every subassembly, component, and raw material. You start at the finished product and drill down layer by layer until you reach the smallest purchasable part.
Say your finished product is a wooden chair. In an explosion view, you start with the full chainr and break it down. You keep drilling down until you hit the smallest individual parts.
Explosion BOM table (wooden chair + components)
| Level | Item | Description |
|---|---|---|
| 0 | Wooden chair | Finished product |
| 1 | → Seat panel | Flat wooden seat |
| 1 | → Backrest | Vertical support |
| 1 | → Front legs (2) | Load-bearing legs |
| 1 | → Rear legs (2) | Angled legs for back support |
| 1 | → Screws (8) | Fasteners used in assembly |
Implosion display
An implosion view works in reverse. It shows you all the parent assemblies and finished goods that rely on a specific part. You start with one component and move upward to see where that part is used.
For that same wooden chair, take the chair leg for instance. You’ll see every assembly and every finished product that uses that same leg in its design.
Implosion BOM table (rear leg + parent builds)
| Level | Item | Description |
|---|---|---|
| 0 | Rear leg | Single chair leg component |
| 1 | ← Wooden chair | Main product using this leg |
| 1 | ← Wooden bar stool | Another product using the same leg design |
| 1 | ← Accent chair | Additional product using the same component |
Importance of Accurate BOMs
Accurate and easy-to-read BOMs matter because they shape everything that happens after the product leaves engineering. One mistake in a part number, quantity, or cost flows downstream into purchasing, scheduling, inventory, finance, and even customer delivery.
Here’s what accurate BOMs improve:
- Procurement efficiency: You buy the right parts in the right quantities without last-minute rush orders.
- Production scheduling: Your shop floor gets reliable data, so build plans stay on track.
- Inventory control: You avoid overstocking, stockouts, and costly safety-stock padding.
- Product quality: Assemblies stay consistent because everyone works from the same source of truth.
- Cost accuracy: Finance gets clean unit-cost rollups and predictable margins.
- Change management: Engineering updates flow cleanly, and you avoid rework caused by outdated components.
- Supplier coordination: Vendors get clear specs, which reduces miscommunication and delays.
- Customer delivery: Fewer build issues mean fewer delays and more reliable lead times.
Basically, when every component is accounted for and properly documented, the entire product development, manufacturing, and sales process can flow harmoniously.
Components of a Bill Of Materials
An effective BOM contains these eleven components:
- BOM level: Shows where the part fits into the BOM hierarchy.
- Part name: Helps identify and provide information about parts.
- Part number: A shorthand identifier for parts, either intelligent or nonintelligent.
- Manufacturer name: Identifies the part’s manufacturer.
- Part phase: Indicates the part’s stage in the product lifecycle, sometimes including a revision level.
- Alternate parts: Lists substitutes if the original part is unavailable.
- Priority analysis: Defines critical parts to help prioritize purchasing.
- Description: Provides details to distinguish similar parts by characteristics like color and dimensions.
- Quantity: Indicates the required amount and units of measurement for each part.
- Procurement specification: Describes how parts are purchased and made, often using designations like P (purchased), M (modified), and C (custom).
- Comments and notes: Documents changes, notes, and visual aids like images or diagrams.
Benefits for Businesses Using Bills of Materials
When a business uses a BOM instead of relying on manual methods, they gain several key advantages—primarily revolving around efficiency and time management.
Improved Accuracy in Production Processes
Inventory inaccuracies can cost anywhere from $10 to $250 per mistake—a figure that results in millions in losses, according to LinkedIn research.
And failure to plan adequately for equipment downtime and production inefficiencies could mean a loss of time, labor, and money.
Using an accurate BOM eliminates the risk of these problems by ensuring that the right components are available when needed.
Increased Efficiency in the Design Phase
Depending on the complexity of the product, it may take hours for engineers and designers to create a BOM manually.
Manually-created BOMs have high margins of error with limited customizability.
The process can be completed in minutes by automating the process and connecting a BOM to design tool kits. This saves time, streamlines team collaboration, and helps keep projects on track.
Enhanced Effectiveness in Product Structures
A BOM ensures that all components fit together, providing an effective way to check product structure and make sure everything works as intended.
This reduces the risk of costly errors or changes in the production process and ensures that the correct parts are used in each product.
Challenges With Using Bills of Materials
BOMs are often integration-ready, but some companies may still encounter challenges in connecting the BOM to their production line, inventory system, or payment processor.
Complexity with Multi-Level BOMs
Multi-level BOMs are inherently complex, and require a lot of manual work to keep them up-to-date.
For example, a car may have many subparts that need to be accounted for in the BOM—each of which requires its own information, such as part name, cost, quantity, and vendor.
Difficulty Tracking Component Changes
If a component is updated or changed, it needs to be reflected in the BOM.
Manually tracking these changes can lead to a lot of errors and confusion—but automated tools help alleviate this difficulty by quickly detecting and accounting for component changes.
Outdated or Inadequate Technology
Even if a BOM is successfully implemented, spreadsheets and manual accounting processes can hinder bill of materials management significantly.
Systems that are disconnected can’t provide real-time updates that a BOM depends on to stay accurate, and manual processes are slow and vulnerable to errors.
How to Create a BOM Using CPQ Software
Today, CPQ (configure, price, quote) makes BOM creation easier than ever. The platform guides you from product selection to fully structured outputs so you end up with a clean, accurate BOM that ties directly to pricing, configuration logic, and downstream manufacturing.
Bill of materials in CPQ software
1. Define the product structure.
You start by mapping your product’s hierarchy on the backend. Include finished goods, subassemblies, and components. This is the backbone rules engine the CPQ system uses to generate BOMs automatically.
2. Add part numbers, descriptions, and attributes.
You enter the data that makes a BOM usable: part IDs, names, material descriptions, and any specs needed for purchasing or production.
3. Set quantities and units of measure.
CPQ stores the quantity-per requirements for each component. This ensures that when a salesperson configures a product, the BOM scales correctly every single time.
4. Apply configuration rules.
You add product logic that tells CPQ when certain components should appear, disappear, or swap. This is how you handle optional features and engineering constraints.
5. Link costs and pricing data.
Through ERP integration, you connect each component to its cost. That way, CPQ can roll up material totals. From that info, it generates pricing calculations and availability updates automatically, and also supports margin analysis.
6. Validate the structure.
CPQ tools include checks that highlight missing data, conflicting rules, and mismatched quantities before the BOM goes live. During live configuration, your sales and engineering team will also be able to edit the BOM at this point, through the same interface.
7. Generate the BOM output.
Once everything’s set, CPQ produces a clean, accurate BOM for you. It’ll also include documentation for the configured product if you need it to. For instance, it could come with assembly instructions, technical drawings, or user manuals.
It runs the same rules every time a rep configures a product, in the exact format your operations, procurement, and ERP systems need.
People Also Ask
Who prepares the bill of materials?
Engineering teams usually prepare the bill of materials using design software like CAD, but they don’t work alone. You’ll see product engineers, design engineers, and manufacturing engineers drive the initial build because they know exactly how the product should be assembled.
From there, operations, procurement, and supply chain teams refine it. They confirm part availability, preferred vendors, lead times, and real-world costs. Finance steps in to validate pricing and ensure the BOM aligns with margin targets.
Does a BOM include labor?
Bills of materials (BOMs) do not typically include labor. They only contain the physical components you need to build the product. That includes parts, materials, subassemblies, and the quantities required.
Does a BOM include pricing?
Yes. A BOM almost always includes the specific pricing for each part listed in the build. You see unit costs, extended costs, and sometimes vendor-specific pricing so you know exactly what the product costs to manufacture.