What is BOM Management?

Bill of materials (BOM) management is the systematic approach of creating, organizing, maintaining, and overseeing all the information related to the components, assemblies, and sub-assemblies required to manufacture a product.

A BOM (bill of materials) serves as a comprehensive list detailing the raw materials, parts, and quantities necessary for production. Effective BOM management guarantees this information is accurate, up-to-date, and accessible to everyone throughout the product’s lifecycle.

Because these documents have a direct impact on production, inventory management, procurement, and supply chain processes, BOM management is a foundational aspect of product development and manufacturing. It plays a critical role in making sure products are built correctly, cost-effectively, and in compliance with necessary standards.

Synonyms

Bill of materials management

Understanding the Bill of Materials (BOM)

Whenever someone from your sales team closes a deal, its details are passed on to the production team for fulfilling the order. The BOM is the document detailing the exact materials and components required to manufacture the product according to the specifications made by your customer.

It contains information on which parts to procure, their quantities, and how they are assembled to create the final product. Without it, the manufacturing process would be chaotic, disorganized, and prone to errors. And your customers wouldn’t get their orders on time.

There are a few main types of BOMs, and they come into play at different stages of the product’s lifecycle.

Engineering BOM (EBOM)

This is the first BOM created in the product development process. It contains all the components and materials necessary to build a product according to its design and functional requirements. Engineers, designers, and technical teams use it to create and test prototypes, perform simulations and analyses, and make necessary design changes before moving on to production.

Manufacturing BOM (MBOM)

The MBOM is created once the product design has been finalized and approved for production. It includes all the materials, components, tools, and processes needed to manufacture the product on a larger scale. It also specifies the manufacturing sequence and any specific instructions or requirements for assembly.

Service BOM (SBOM)

After delivering a finished product, it may require maintenance or repairs. The SBOM is designed for service technicians and lists all the components and parts that might need attention during the product’s lifecycle. It serves as a guide for troubleshooting, repairs, and replacements, ensuring that service teams have the necessary information to maintain the product effectively.

Super BOM

Sometimes called a configurable bill of materials (or CBOM), a super BOM is a special type of BOM that allows for customization and configuration of a product based on different options or variations. It includes all the components, materials, and configurations available for a particular product so that sales teams can quickly and accurately generate quotes and orders for customized products.

Compared to other bills of materials, super BOMs use a flexible framework that allows customers to select different configurations without needing to create a new BOM for each variation. They adapt to rules, conditions, and dependencies, streamlining the manufacturing process for complex products and ensuring each unique configuration is accurately documented and producible.

The Role of BOM Management in Manufacturing

Whether you’re an auto manufacturer, aerospace company, or consumer goods producer, BOM management is what keeps everything running smoothly across your sales, engineering, procurement, and production teams.

BOMs connect engineering, supply chain, manufacturing, sales, and service.

A BOM is a shared source of truth. Engineering designs the product, your supply chain and procurement department sources the parts, manufacturing builds it, sales sells it, and service maintains it.

Engineering updates the BOM when they refine a design.
Procurement knows exactly what to order.
Manufacturing gets a precise list of what’s needed, reducing miscommunications.
Sales understands product configurations and availability.
Service teams can see what parts a product contains, making repairs easier.

If they’re not all working from the same accurate BOM, you get chaos — wrong parts, production delays, incorrect orders, and unhappy customers. But, when BOM management is done right, everyone has access to the latest, most accurate information.

Effective BOM management ensures accuracy and consistency across departments.

BOM management standardizes part names, descriptions, and versioning so there’s no mix-up. It ensures consistency, preventing errors like:

Ordering the wrong parts because of inconsistent naming.
Manufacturing delays due to unclear specifications.
Service teams struggling to identify what’s in a product because of outdated information.

Without proper management, mistakes like these can lead to costly rework, wasted materials, and lost time.

It prevents production errors and reduces waste.

Picture a factory floor. The team is assembling a product, but suddenly they realize they have outdated parts because an engineering change wasn’t communicated properly. Now, the production line stops, expensive materials are wasted, and deadlines get pushed back.

Good BOM management prevents these issues by keeping everything updated and traceable:

If engineering revises a design, the BOM automatically reflects those changes.
Procurement gets real-time updates to order the right materials.
Manufacturing never builds a product with obsolete components.

This cuts down on production errors, reduces waste, and ensures a smooth workflow.

It helps you manage BOM changes effectively.

Let’s say you made a last-minute change to the product structure and need to update the BOM. Without a centralized system, your production team might not have noticed it and already started to build with the old version.

BOM management helps companies quickly adapt to:

Design updates: If engineering modifies a part, the change is logged, approved, and shared instantly.
Supply chain disruptions: If a part is unavailable, procurement can find alternatives and update the BOM before it affects production.
Regulatory changes: If compliance requirements shift, teams can quickly adjust materials and processes.

When you prioritize BOM management best practices, you avoid production delays, minimize costs, and maintain product quality.

Key Components of Effective BOM Management

To achieve optimal BOM management, you need to do the following:

Track revisions and changes (version control)
Maintain a single source of truth (data centralization)
Manage procurement and production costs (cost analysis)
Align engineers, production teams, and suppliers (collaboration)
Adhere to your industry’s standards and regulations (standardization and compliance)

Once you get those prerequisites out of the way, you can start to optimize your BOM management process for maximum efficiency.

Version control

Version control refers to the ability to keep track of revisions and changes made to a BOM. This is crucial for maintaining an accurate record of the product structure and making sure all teams are working with the most up-to-date information.

Let’s say you’re designing a product. Your engineers make updates to improve performance, and suddenly you have multiple versions of the same design floating around. If manufacturing uses the wrong version, you get defects, recalls, and wasted money.

Using a version control system allows you to easily track changes, review previous versions, and identify who made specific changes. This helps prevent confusion or mistakes during production, and it provides a clear audit trail for compliance purposes.

On top of that, not everyone should be able to edit a BOM. Setting role-based access prevents accidental (or intentional) changes by unauthorized users.

Data centralization

Your sales, engineering, procurement, and production teams use different software to manage their day-to-day operations. But they need to have the same information and product designs in order to produce the right end product.

Every BOM needs to be stored in a centralized, easily accessible system. That means your CPQ (configure, price, quote), ERP (enterprise resource planning), CAD (computer-aided design), PLM (product lifecycle management), and SCM (supply chain management) systems all need to integrate with one another.

Cost analysis

If you’re not factoring in pricing, you might end up with a product that’s too expensive to manufacture competitively. That’s why you have to forecast the total cost of production before materials are ordered, and identify cost-saving opportunities by evaluating different materials, suppliers, and designs.

On top of that, you’ll want to consider how ordering in bulk affects costs. If a component gets cheaper at higher quantities, the BOM should reflect those pricing changes for better cost planning.

It’s also worth mentioning the cheapest material upfront might be more expensive in the long run if it leads to higher defect rates or warranty claims. A well-managed BOM should factor in long-term cost and production efficiency, not just short-term savings.

Collaboration

Let’s say engineering designs a new product, but they don’t check with manufacturing to see if the components are actually producible at scale. Or maybe a supplier swaps a material without telling procurement. Now you’ve got production delays, cost overruns, and possible compliance issues.

A cloud-based BOM system lets multiple teams see and comment on changes in real-time. Using one, you can…

Prevent miscommunication between teams that rely on the BOM.
Ensure procurement, engineering, and manufacturing stay in sync.
Speed up decision-making when changes need to be made.

Your system should also integrate with your vendor portals. Sometimes, suppliers know better alternatives for materials or parts. If you involve them early in the BOM creation process, you can avoid last-minute supply chain disruptions or higher-than-expected part prices.

Standardization and compliance

Especially if you’re in a highly regulated industry like aerospace, automotive, or medical devices, compliance isn’t optional—it’s the law. Even in consumer electronics, failing to meet regulatory requirements (like RoHS for hazardous substances) can mean fines, recalls, or losing market access.

If you sell in multiple countries, your BOM should reflect compliance with different regional regulations. What’s legal in one country (e.g., certain chemicals in manufacturing) might be banned in another.

Some materials and parts also become non-compliant over time due to changing safety and environmental regulations. A good BOM system will flag potential compliance risks before they become a problem.

BOM Management Challenges and Solutions

Common BOM management challenges

When you’re dealing with hundreds of BOMs across the whole organization, that’s a lot of moving parts and factors to manage. It’s easy for mistakes or miscommunications to happen, leading to delays, cost overruns, and compliance issues.

Data discrepancies and manual errors happen when someone enters the wrong part number, forgets to update a revision change, or uses an inconsistent a data format.
Lack of integration with other systems like ERP and PLM means BOMs are stored in silos, there’s no real-time syncing between systems, and teams use different software that doesn’t communicate well.
Change management processes become inefficient when there isn’t a formal approval process for BOM revisions, changes aren’t communicated to all departments in real time, and engineers update the BOM without considering supplier lead times.

You’ll have a hard time scaling and growing the business if you’re constantly dealing with these challenges.

So, let’s look at some solutions.

BOM management best practices and solutions

Most of your problems with BOM management can be solved with software. However, there are also considerations for how you approach bills of materials as an organization, and whether you have the right processes and people in place.

Use a centralized BOM management system

Manually managing BOMs in spreadsheets is precisely what causes most problems in the first place.

Keep in mind that not all BOM software automatically checks for errors. Make sure your system has built-in validation that prevents incorrect data from being saved in the first place.

Also remember that a good BOM system logs every change, so you can track who modified what and when. This is critical for troubleshooting discrepancies.

Integrate your BOM system with the rest of your tech stack

BOMs should sync seamlessly across ERP, PLM, and CPQ to:

Ensure procurement orders the right materials based on sales configurations and BOM updates.
Keep engineering and production aligned without manual data transfers.
Reduce lead times by eliminating duplicate data entry.

Some BOM software only pushes data to ERP but doesn’t pull updates back. Ensure you have bi-directional syncing so changes in one system update everywhere.

And if your ERP or PLM doesn’t natively integrate with your BOM system, check if it supports API connections. Otherwise, you might need custom development. It’s best to figure this out during your software evaluation process, so you don’t pick a tool that creates more data silos.

Improve collaboration with a cloud-based system

Traditional, on-premise systems slow down collaboration, especially for global teams or remote workers. A cloud-based BOM system solves this by enabling instant collaboration between engineering, procurement, and manufacturing.

Your cloud-based system should offer role-based access so that only the right people can modify BOMs. And, if your manufacturing site has limited internet, a cloud BOM system should have an offline mode for uninterrupted work.

Establish a standard naming convention

Consistent part number formats and naming conventions eliminate confusion when searching for components. It can also help with data syncing between systems, and ensure everyone is on the same page.

Create a structured approval workflow

Having a formal engineering change mangement (ECM) workflow ensures every change is tracked and approved before implementation, and that all affected departments are aware of the impact. It’s also a way of verifying the BOM consistent and error-free across teams.

Now, not all changes follow the same timeline, which is why there should be a fast-track approval process for urgent fixes to avoid production delays. And for supplier-side changes, like substituting a material, there should be a separate formal process to review and approve it.

Integrate with CPQ software

One of the most important yet overlooked aspects of BOM management is its relationship with CPQ. Before it’s a list of items and assembly instructions on a bill of materials, the product in question needs to be configured, quoted, negotiated, and sold.

So, the first touchpoint and initial source of the information that goes into the BOM is the software you use to sell the product — that is, your CPQ. A seamless integration between the two makes it easy for your sales team to work with your engineering team to ensure accurate and optimized configurations, then instantly hand off the BOM as soon as the deal is closed.

When looking for a CPQ system, you have two additional considerations: product complexity and dynamic pricing. Some CPQ systems struggle with highly customized builds, but yours needs to handle one-off configurations efficiently. And a good CPQ-BOM integration should factor in real-time cost changes (e.g., material price fluctuations, volume discounts) for accurate quoting.

BOM Management Software and Tools

There are several software solutions designed specifically to streamline BOM management, but most BOM-related tools are built into your CPQ, ERP, or PLM system.

For instance:

A CPQ for manufacturing companies can automatically take configuration data and turn it into a bill of materials as soon as the sale is closed.
Linking BOM management tools with CAD systems allows for direct extraction of component information from design files, reducing manual entry errors and ensuring that BOMs accurately represent the latest design revisions and quality control measures.
BOM software within your ERP system ensures material requirements, inventory levels, and procurement processes are aligned with production schedules, reducing the risk of inventory management problems like overstocking.
Integrating BOM management into PLM allows for synchronized updates across design, engineering, and manufacturing departments post-delivery.

Within all of these platforms, AI and automation are revolutionizing BOM management. AI algorithms can automatically detect inconsistencies or errors in BOMs, like duplicate entries and missing components. And you can free your team for more strategic tasks by automating things like like updating BOMs with new part numbers or generating reports.

The Future of BOM Management

Advancements in digital transformation, smart manufacturing, and Industry 4.0 technologies are reshaping the future of BOM management. Let’s explore how these developments influence BOM management, including the roles of AI, blockchain, IoT, and the importance of Super BOMs in customizable product design.

Digital transformation and smart manufacturing

Digital transformation involves integrating digital technologies into all aspects of business operations to fundamentally change how an organization operates and delivers value. Today, over 90% of companies worldwide have invested in it in some way.

In manufacturing, the shift leads to smart manufacturing, characterized by interconnected systems, real-time data analytics, and automation. Digital systems enable instant BOM updates. Cloud platforms facilitate seamless communication across teams with up-to-date BOM info. And real-time monitoring helps manufacturers anticipate failures and adjust BOMs to minimize downtime.

AI, blockchain, and IoT technology in BOM tracking

AI is increasingly permeating every aspect of business operations, and BOM management isn’t an exception. AI algorithms can forecast material requirements and potential supply chain disruptions, enabling proactive adjustments to BOMs. And machine learning models can identify inconsistencies or errors in BOM data, enhancing accuracy and reliability.

The data within BOMs using blockchain technology is tamper-proof, and there’s a secure, transparent, and irrefutable history of all changes. Each component’s origin and journey through the supply chain can be recorded on the blockchain, which improves accountability and compliance.

IoT sensors can track the status and location of components, then give team members up-to-date information that can be reflected in BOMs. And IoT devices can trigger automatic BOM updates when changes like inventory depletion or equipment modifications happen.

BOM management and Industry 4.0

In this context, Industry 4.0 (also known as the Fourth Industrial Revolution) represents the integration of cyber-physical systems, IoT, and cloud computing into manufacturing. It’s a paradigm shift that’s transforming BOM management in several ways:

Decentralized decision-making: Smart factories enable machines to make autonomous decisions based on real-time data, necessitating dynamic BOMs that can adapt to these changes.
Enhanced flexibility: Manufacturers can quickly reconfigure production lines to accommodate new products or customizations, with super BOMs updating automatically to reflect these changes.
Higher efficiency: Automation reduces manual interventions in BOM management, minimizing errors and accelerating production timelines.

BOM Management