What is BOM (Bill of Materials)? Definition, Examples, Guide
Issues like inventory mismanagement, production delays, and unexpected costs often pose serious challenges to manufacturing businesses. All this is simply due to a lack of clear planning. These problems further complicate operations inflating budgets and leading to general customer dissatisfaction.
That’s where a centralised system to organise materials and components against strict deadlines comes in. This article covers the definition of BOM (Bill of Materials) with examples and tips for your manufacturing business. Keep reading below.
Once you overlook the real purpose behind creating a bill of materials (BOM), your business risks dealing with production delays, inventory discrepancies, and additional, unwanted costs.
Working with an incomplete BOM puts you at a higher risk of stockouts or, on the opposite end, overstocking of materials. This can increase procurement costs and change cash flow for the worse. A lack of details in your bill of materials also brings more production downtime and waste as you won’t be able to account for missing components or wrong material orders.
To prevent this, organisations must prioritise planning and documentation as the main priority of their operations. In this article, we explore how adopting a bill of materials can give you a systematic approach to managing production inputs, what key components you should focus on, and how to get started with improving your BOM.
What is BOM (Bill of Materials)?
A bill of materials is a detailed list of all the materials, components, processes, and instructions an organisation needs to manufacture, assemble, or fix a product. A BOM works like a production recipe that reunites raw materials and finished goods.
Here are a couple of examples of BOMs for different industries:
- Electronics: When manufacturing a smartphone, the BOM might list components like the screen, battery, processor, camera modules, screws, adhesives, and even packaging materials. Each item will have specific part numbers and quantities.
- Furniture: For creating a wooden table, include items like wooden planks, screws, nails, varnish, and assembly instructions.
- Automotive: For building a car, add items like the engine, pistons, spark plugs, tires, doors, seats, and the infotainment system.
Key Components of a BOM in Manufacturing
As a key rule, you’ll want to add everything you need to produce an item to the final BOM. This includes all the information you need for all stages from procurement to assembly.
Below are the essential elements you’ll typically want to add to your own bills of materials and a couple of formatting examples for each:
Item Number
The item number component acts as a unique internal identifier for each material or item. You use these to make it easier for your team to track inventory, procurement, and assembly processes. This prevents confusion throughout these stages, making it easier to organise items and communicate on them.
Examples: TIR-005, 8545, ADH010, ST-006-V2
Description
The description comes in to clarify what the component is, including fundamental attributes and how it's used. Team members, suppliers, and manufacturers use this to understand the part's purpose and distinguish between different similar items.
Examples: Radial tire, 16-inch diameter, suitable for sedans.’, ‘Glossy red automotive paint, 5-litre can.’, ‘Platinum-tipped spark plug for high-performance engines.’
Units/Quantity
This field refers to the exact number of components or materials you need to assembly a product. It's a must as it helps with procurement, inventory control, and assembly planning.
Examples: 5, 2 liters, 10 meters, 250
Measurements
While this bill of materials field doesn't apply to all items, it's used where materials or parts have size. This is worth mentioning to ensure compatibility during assembly and clarify dimensions in purchasing and quality control.
Examples: Roll: 10 m x 2 m, Screen: 10-inch diagonal, Length: 1.2 m, Width: 0.8 m, Height: 0.7 m
Part Numbers
A part number is a unique identifier assigned to a component or material by a supplier or manufacturer. Compared to item numbers (which are used for internal tracking), part numbers are often set in supplier catalogues, order documents, or official communication with vendors.
Examples: NGK-2345, FE-DS-10, AGy7u5454
Material Type
The material type specifies the composition of a component or material, regardless of whether the item is made out of one or multiple materials. This information ensures the correct material is used for manufacturing, compliance, and durability/quality control requirements.
Examples: plastic, steel, wood, cast iron, ceramic, leather/fabric
Supplier Information
The supplier information field reunites supplier contact details such as the name, address, phone number, person of contact, etc. If needed, extra information such as security certificates or lead times can be added.
Examples: supplier names, addresses, certifications, contact details
Assembly Instructions
Depending on what/how much detail you need, write the assembly instructions so they match your operational processes. Generally, these should provide clear guidelines on how each component or material should be assembled or processed. You can include safety requirements, quality checks, required tools, or complete step-by-step processes.
Examples: ‘1. Apply anti-seize lubricant to the threads. 2. Hand-tighten the spark plug into the engine block. 3. Tighten with a torque wrench to 25 Nm.’, ‘Step 1: Install the piston. Step 2: Secure the cylinder head.’, ‘Wear gloves when handling sharp metal edges to avoid injury.’
How to Improve Bill of Materials Management
Errors in a bill of materials are likely to happen if you’re not using the proper structure or if your team isn’t instructed on how to best use (and update, if needed) this document.
Working with a well-managed, error-free BOM is possible. In this section, we discuss the potential impacts of BOM errors and how to avoid them to improve the efficiency of your bill of materials management process.
Integrate Manufacturing Data
When you include all your manufacturing data, you’re reducing the risk of errors and helping your team with making fact-based decisions. Inevitably, data coming into your systems is going to be different.
Distinct departments risk submitting separate documentation if your teams are siloed. This can impact communication, leading to production delays and BOM inconsistencies that will impact the final product.
Instead, bring all your manufacturing data into one central platform where everyone can access and update it in real-time. Having accurate access to insights speeds up workflows as your team members won’t have to go through endless back and forths to get correct information on an item.
To access all manufacturing data in one place, choose an Enterprise Resource Planning (ERP) software that will pull data from various sources, such as inventory levels, machine performance, and production schedules, into a unified platform.
Example: A company using an ERP system integrates data from the BOM, inventory, and purchasing to make sure the right parts were ordered and are now available for production. This reduces errors and prevents delays and overstocking.
Implement Version Control
Without version control on your bill of materials, you won’t be able to accurately track changes and potentially see where/if mistakes were made at any point.
Version control is also a must for companies manufacturing different product versions. In this case, a BOM will inevitably pass through multiple revisions whenever the design is updated or if you change materials or steps in your production process.
Access Manufacturing software provides powerful version control and centralised data management that acts as a single source of truth for your entire business. With real-time data and analytics, all your teams have access to the most accurate and up-to-date information.
Access software also fosters transparency and collaboration by allowing controlled access to external teams, including customers. By granting access to key reports, such as delivery schedules and quality performance dashboards, the software enhances communication and trust throughout the customer journey. The version control system also tracks every change made to documents and data, providing an audit trail for accountability and compliance.
Example: When you update the processor for a laptop device design, version control saves and tracks your BOM changes. This gives all departments access to the most current version of the components. All you have to do is make sure each version is correctly marked so that the most recent one is always used while older ones only act as a reference.
Automate Material Planning Processes
Automating material planning processes lets companies reduce manual errors, streamline inventory management, and improve production efficiency. By automating tasks like order scheduling, inventory level monitoring, and demand forecasting, your organisation can ensure the right materials are available at the right time without overstocking or stockouts. This means lower operational costs, fewer delays, and improved productivity.
By using the Access FactoryMaster, our Material Requirements Planning (MRP) tool, you can automatically generate accurate material forecasts based on real-time production schedules and historical data.
This ensures that the right amount of raw materials, components, and parts are available at the right time, preventing shortages or overstocking. With automated inventory tracking, you can generate purchase orders instantly whenever inventory levels drop below your preset thresholds. This way, you won’t have to manually intervene each time so you can guarantee a continuous supply of materials for production.
Example: A manufacturer of electronic devices uses an MRP system to automatically trigger orders for key components like resistors or screens when inventory levels reach a certain point. This gives the organisation a continuous supply of materials so they won’t risk halting production due to shortages.
Using MRP and Bill of Materials Software
Using specialised software for managing your bills of materials means you won’t have to manually deal with ensuring the accuracy of your BOM documents. Expect your workflows to be smoother and your team to get a deeper visibility into the entire manufacturing process.
Access manufacturing software helps you automate routine tasks such as inventory tracking, order placement, and demand forecasting. This minimises errors, reduces delays, and optimises resource utilisation, making production more efficient and cost-effective.
What will your operations process look like?
- You’ll rely on automation to reduce human errors in inventory management fields such as part numbers, or order quantities.
- You’ll deal with fewer mistakes that would otherwise disrupt the production process.
- You’ll connect your BOM to your material planning process so you can send better forecasts on what materials you need and avoid over-ordering or stockouts.
- You’ll be able to better coordinate different departments through real-time updates and access to real-time, accurate data and documents.
- You can rely on tools from the Access Group such as FactoryMaster for MRP and Orchestrate for production scheduling to optimize machine usage, workforce allocation, and material flow.
- You’ll work with tools that scale together with your business, constantly adapting to all functions within your team so you won’t need separate systems.
Integrate BOM management with production planning and MRP software to automate and streamline your production operations. This integration of different solutions supports informed decision-making so you can automatically update BOM data and adjust material orders based on real-time production needs, preventing shortages or overstocking while improving production timelines.
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