A BOM, or bill of materials, is a structured list of every component, part, and raw material needed to build a finished product. Think of it as a recipe for manufacturing: it tells you exactly what ingredients you need, how much of each, and how they fit together. BOMs are used across industries from electronics and automotive to food production and construction, and they serve as the foundation for purchasing, cost estimation, inventory management, and production planning.
What a BOM Includes
A standard bill of materials contains several key data points for every item in the list. At minimum, you’ll see the product name at the top, followed by entries for each component that include a part number (a unique identifier), a description of the part, the quantity required, and the unit of measure (pieces, pounds, meters, liters, etc.). Most BOMs also include the unit cost of each component, which lets you roll up the total material cost for one finished unit.
Beyond raw materials, a BOM lists sub-assemblies. These are groups of parts that get assembled together before being combined into the final product. A laptop BOM, for example, wouldn’t just list every individual screw and chip. It would group components into sub-assemblies like “display module” or “keyboard assembly,” each with its own list of parts underneath.
Single-Level vs. Multi-Level BOMs
The simplest form is a single-level BOM, which is just a flat list. Every part appears on one level with its quantity and attributes. This works well for simple products with few components, like a basic piece of furniture or a single-ingredient food product.
Most manufactured products require a multi-level BOM, which shows parent-child relationships between assemblies and their components. Picture a tree diagram: the finished product sits at the top, major sub-assemblies branch off below it, and individual parts fan out at the bottom. You can expand or collapse each branch to see how parts nest inside larger assemblies. A bicycle’s multi-level BOM might show the “wheel assembly” as a parent, with spokes, rim, hub, and tire as children underneath it.
There’s also a flattened BOM, which takes a multi-level structure and collapses it into a single list showing every distinct part with its total quantity across all levels. This is especially useful for purchasing. Instead of digging through each sub-assembly to count how many of a specific bolt you need, a flattened BOM adds them all up for you.
How Businesses Use BOMs
The most immediate use is cost estimation. By multiplying each component’s unit cost by its required quantity, you can calculate the total material cost for a product before production even starts. This feeds directly into pricing decisions, profit margin analysis, and budgeting. When a supplier raises the price of one component, the BOM lets you see exactly how that change ripples through to your finished product cost.
BOMs are also central to inventory management. Enterprise resource planning (ERP) and materials requirement planning (MRP) systems use the BOM to figure out what parts need to be ordered, when, and in what quantities. If you’re scheduled to produce 500 units next month, the system multiplies your BOM quantities by 500, checks what’s already in stock, and generates purchase orders for the difference. Without an accurate BOM, you end up with either excess inventory sitting on shelves or missing parts that halt the production line.
Production teams rely on BOMs to sequence their assembly work. The hierarchical structure tells workers which sub-assemblies to build first and how they combine into the final product. This keeps the process organized and repeatable, which is critical when you’re training new employees or running multiple production shifts.
BOMs also help track production waste. When you know exactly how much material should go into each unit, you can compare that against what’s actually consumed on the factory floor. If the BOM says a product needs 2 pounds of aluminum but your production records show 2.4 pounds being used, you’ve identified a waste problem you can investigate and fix.
Keeping a BOM Accurate Over Time
Products change constantly. A supplier discontinues a part, an engineer redesigns a component for better performance, or a material gets swapped to reduce cost. Every one of these changes needs to be reflected in the BOM, which is where revision control becomes essential.
Modern ERP systems maintain a complete revision history, letting you save and view past, present, and even future versions of a BOM along with the reason each change was made. This matters for quality control and regulatory compliance, since you may need to prove exactly which version of a product was built on a specific date.
Many companies add a formal change management process on top of revision tracking. This means a BOM revision can’t go live until it’s been reviewed and approved, preventing unauthorized or accidental changes from reaching the production floor. Features like effectivity and expiration dates let you schedule when a new component phases in and an old one phases out, so purchasing and production can plan around the transition. If you need to swap one component across dozens of products, mass change tools let you replace a part on all affected BOMs at once rather than editing each one individually.
Who Creates and Manages BOMs
In most organizations, the engineering team creates the initial BOM during product design. This engineering BOM (sometimes called an EBOM) focuses on the design intent: what the product is made of and how it fits together. Once the product moves toward manufacturing, a manufacturing BOM (MBOM) is created or adapted from the EBOM, adding details specific to the production process like packaging materials, consumables such as adhesives or solder, and assembly instructions.
From there, the BOM becomes a shared document that purchasing, production, accounting, and quality teams all reference. Purchasing uses it to source materials. Accounting uses it to calculate cost of goods sold. Quality teams use it to verify that the right components went into each batch. Because so many departments depend on it, keeping the BOM accurate isn’t just an engineering task. It’s an ongoing responsibility that touches nearly every part of the business.