What is a Bill of Material (BOM)? | Meaning, Purpose, Format

Manufacturing businesses use Bills of Material (BOM) to keep track of their inventories. BOMs help manufacturing units design, plan inventories, estimate costs, etc.

The Bill of Materials includes all raw materials, components, assemblies, sub-assemblies, parts, and everything else required for production. The final product may be a finished item or a semi-finished item used in the production of final and more complex goods.

The Bill of materials for finished goods includes not only components but also their quantities. A single product can have multiple BOMs if it has variants by color, configuration, size, etc.

A Bill of Materials may also define by-products, co-products, and scraps resulting from finished goods production.


Manufacturing Industries that use Bill of Material

Manufacturing industries use a Bill of Materials primarily for discrete components.

Discrete manufacturing means finished products are made from touchable and countable components or raw materials. A finished product produced here can be broken down and reused or disposed of as parts by joining, attaching, fixing, and assembling.

Process manufacturing industries do not use or require a Bill of Material. A process manufacturer makes products such as cosmetics, paint, juice, ketchup and so on.

Different types of a Bill of Material (BOM)

Here are the different types of Bill of Material (BOM) listed below:

  • Configurable BOM
  • Assembly Bill of Materials
  • Multi-Level BOM
  • Single-Level BOM
  • Manufacturing Bill of Materials (MBOM)
  • Engineering Bill of Materials (EBOM)
  • Sales BOM
  • Service BOM

In general, there are different types of a Bill of Material as you see, but the most common and important are:

  • Manufacturing Bill of Materials, known as MBOM
  • Engineering Bill of Materials, known as EBOM

Let's consider each of them:

Manufacturing Bill of Materials (MBOM)

This is a list of the parts and quantities needed to produce the finished product. Using this list, the procurement keeps track of stock and updates the ERP system with BOM information.

Engineering Bill of Materials (EBOM)

Engineers create a Bill of Materials using Computer-Aided Design (CAD) or Electronic Design Automation (EDA) during the design phase of a product. Engineering teams provide a list of each component or part as designed.

Format of Bill of Materials

Here is the most accessible and practical format of the Bill of Materials.