BOM (Bill of Materials) is a comprehensive list of raw materials, components, intermediate assemblies and sub-assemblies sold through a supplier and needed to construct, manufacture or repair an item or service. A bill of materials usually appears in a graded format, with the highest level showing the finished product and the lowest level showing individual components and materials.
Upon completion of the design of a component, a design engineer creates a list of all the materials required for the production of the component. This list is what is called a bill of materials.
The purchasing department is given the obligation to deal with the purchases but is not aware of the design component, specifications of materials and the kind of quality demanded. Therefore, the purchasing department receives such data from the design section or production section. Purchasing often relies on the recommendations for purchased items, quantities, and requirement dates from the material requirements planning (MRP) system embedded in most modern ERP systems today.
Essentially, the BOM document is a concentrated source of information for the purpose of manufacturing a product. The assembly of a product always begins with the creation of a bill of materials. An accurate BOM document is essential because the required parts will be available when the product is being built. In case of any inaccurate components, there will be a delay or complete halt in manufacturing the product. It may also increase the operational costs as the missing parts must be located, with another production order to be started, or customers will eventually return the product.
Types of BOMs
From purchasing, manufacturing, assembling, and selling products, monitoring the whole production process in stages can be difficult. Many manufacturers using Enterprise Resource Planning (ERP) applications discovered that having bill of materials can help them avoid common production-related difficulties. It makes the whole production process more efficient, accurate and timely.
For many companies, the production process starts with raw materials and creating a production order which entails all the materials and steps required in producing an item within a specified time frame. The materials needed for a production order can be found in the BOM generated by the ERP application.
Without an integrated ERP solution, generating a BOM and the entire production process becomes more complicated and prone to error because of the difficulties of the manual processes and in-house legacy systems. Some of these challenges include things such as;
- Managing inventory in various warehouse locations
- Tracking and recording inventory
- Making sure the required amount of raw materials and parts are created and ordered at the time of production
- Calculating shortages or surplus inventory
- Access to real-time information
- Time-phasing material purchases
- Accurately costing assemblies and finished goods
- Maximizing work center, machine, and labor schedules based on complex BOMs
The following are 11 different types of BOMs that are most common for the manufacturing and engineering industry. Note that some of these terms are closely related to others on the list.
(1) Engineering Bill of Materials (eBOM)
The engineering BOM (eBOM) is established during the product design stage and is usually based on Computer-Aided Design (CAD) or Electronic Design Automation (EDA) tools. This document lists the items, parts, components, subassemblies and assemblies in the product from a design standpoint. It doesn’t deal with components such as packaging, the shipping mode of transport and other components required for the product to be shipped. Neither does it clarify how parts should be grouped at every stage of production or which manufacturing operations and resources are required for production. Such items are instead included in the manufacturing bill of materials (mBOM).
(2) Manufacturing Bill of Materials (mBOM)
The manufacturing bill of materials (MBOM) is a set of documents that entail all the parts and assemblies needed to build a complete and shippable product. This comprises of packaging materials, items used in the assembly process, printed quick-start guides, amongst others. This document contains information that is utilized by integrated business systems when it comes to ordering parts and building the product. This includes the enterprise resource planning (ERP), materials resource planning (MRP), and sometimes manufacturing execution system (MES). The mBOM depends on the accuracy of the quantities of ordered parts in the manufacturing process. This ensures the purchasing department is able to maintain the optimal schedule of ordering required parts and negotiating the best prices from vendors. The mBOM is often very different than the eBOM but both have similar information.
(3) Service BOM
Service BOMs are usually developed by engineers during the design stage. It includes a list of all the parts, installation sites and repair instructions that service technicians use in installing or servicing a product onsite at the customer’s place of business. Service BOMs are not as common in traditional manufacturing environments but are very popular in service industries or where manufacturers install or service products in the field.
(4) Sales BOM
Opposed to other types of BOMs, a sales BOM presents the details of a finished product before its assembly in the sales phase. Both the finished product and components are showcased as different items in the sales order document. The main item will be listed only as a sales item and not as the inventory item while the minor components will be listed as sub-items. Some systems treat the sales BOM as a kit which can be pre-assembled and stocked or assembled to order after the order has been placed.
(5) Assembly Bill of Materials
An assembly BOM is the same as a Sales BOM where the main item is showcased as a sales item and not the inventory. Unlike the Sales BOM, the finished product is presented in the sales document while the minor components do not appear as sub-items. Assembly BOMs can come as single-level or multi-level.
(6) Production BOM
A Production BOM serves as the foundation of a production order. It entails the components and subassemblies that make up a finished product, including the prices, descriptions, quantities and units of measure. In the production process, physical components are converted to the finished products. An automated BOM system adds the cost, material availability, and the required components to work orders, ensuring raw materials are properly allocated to products. A production BOM is sometimes the same as the eBOM. The main difference in some systems is that the mBOM sometimes only includes material information (not labor) while the production BOM will always include both the materials and the labor operations (also known as the manufacturing routing).
(7) Template Bill of Materials
A Template BOM can be used for Production BOM or Sales BOM with the main items displayed first, followed by other components. One can update the quantity of those components, exchange them and replace them with other components or delete them in the BOM or on the sales order.
(8) Configurable BOM (cBOM)
A configurable BOM entails all the components needed in designing and manufacturing according to the client’s preferences. The cBOM is mostly utilized in industries with highly configurable products such as job shops, heavy machinery and industrial machinery. It is much less common and often the byproduct of the unique product configuration resulting from a rules-based product configurator or configure, price, quote (CPQ) application.
(9) Single-Level BOM
A single-level BOM is used for products whose configurations are not complicated and do not have subassemblies. This document entails the total amount of the parts used in manufacturing a product – which is listed in numerical order. The structure of this type of document allows one level of the minor components, assemblies and material.
(10) Multi-Level BOM
Compared to a single-level BOM, a multi-level BOM is used in complicated manufacturing. It includes subassemblies that are broken down into further levels of subassemblies. Each item number, whether raw material or labor, should relate with the main item except at the top-most level.
(11) Phantom BOM
A phantom BOM is never manufactured on its own. Instead, it represents a template for an item or assembly and it’s required components that are inserted into other BOMs or routings. There are several types of phantom BOMs. Each type varies by ERP system with some of the most common variations known as Plan A, Plan B, transient, and blow-through phantoms.