What is BOM (Bill of Material)

What is BOM

Types of BOM

In commercial term, BOM is typically categorized in two main verticals. 

  1. Manufacturing BOM
  2. Engineering BOM 
  3. Sales BOM

Manufacturing Bills of Materials or Product BOM

Manufacturing BOM or manufacturing Bills of Materials  stands for Finish Goods / product  Bill of Material. In product or manufacturing BOM, this is the minimum quantity of all Raw Materials required separately for producing unit quantity of the product. BOM helps planning department in Raw Material procurement

What is Product BOM and How it helps in Planning

Before understanding the Finished product Bill of Material, we should understand which department contains what data with them. How these data used to calculate the requirement of Raw Material to be used for producing planned production of Finished Goods.

For building a product, analysis of inventory at multi dimensional matrix is analyzed on data comes from – 

  • Sales department contains future Sale Orders to be manufactured.
  • Planning department contains minimum quantity required for producing the products.
  • Inventory stock contains details about available stock required for manufacturing the product.
  • Purchase department contains information about orders of required material in pipe line.
  • Planning department collects data from Sales and purchase departments.
  • Planning department collects data for stage wise wastage from production departments and calculate net impact on production for those Raw Materials.
  • Planning department calculate total Raw material required as

Requirement = BOM quantity – Inventory quantity – Pipeline quantity – Quantity pending for stocking + waste quantity

What Manufacturing Bills of Material contains

  • Finish Good Name and Party Code
  • List of Items required to produce the Finish Good that contains
  1. Item Code
  2. Item Name
  • Unit of Measurement
  1. Quantity required
  2. Drawing No (If any)
  3. Catalogue no (if any)
  • Supplier Code (If specific)
  • Weight (If any)
  1. Rating (If any) – Electrical / Electronic material like Capacitor , Induction coil, register, fan etc
  2. Current
  3. Voltage
  4. AC / DC
  5. RPM
  6. Dimensions (if any)
  7. Length
  8. Width
  9. Height

       If effective material planning is being done based on BOM and related analysis, organizations can save a very decent amount of fund that can be used in segments

What is Engineering Bills of Materials

Engineering Bills of Material is basically the detailed layout of Plant and Machineries. This is controlled by plant drawings and layouts. Drawings normally prepared using CAD software. 

It has complete information of each and every machine installed with components required in the manufacturing setup. Normally Machine suppliers provide these drawings to customer at the time of machine erecting and commissioning time. Now every single machines is again categorized based on sub assemblies used in manufacturing the single machine, which are used for ordering for particular part at the time of replacement it. If this part number is not known, machine manufacturer will not be able to supply correct part.  Here Machine BOM / machine Bills of Materials  contain-

  1. Part No
  2. Drawing No
  3. Catalogue No
  4. Part Material (Steel / Plastic…..etc)
  5. Life cycle
  6. Type of Packaging

What is Sales BOM or Sales Bills of Material

A sales Bills of Materials is the not related to Finish product but it handles the requirements of accessories components or items required to initiate sales and dispatch cycle.

 As we know a Finished product can never be sent to customer end in loose condition it requires many more items like –

1- Packing Material Part Code

2. Packing Material Quantity required

3. Barcode Label with size in print format


How BOM helps Management

Organizations which use BOM concept very effectively, overcome the problem of dead inventory in the organization. These organizations know very well the exact requirement of raw materials for manufacturing the planned finished goods. Automobile, Computer hardware, Electronics goods, home appliances etc are the industries where a single finished good may require thousands of items which when assembled, that one finished good manufacture.  Following this concept religiously is the main agenda of their planning teams. A strongly managed BOM also helps in managing Supply chain (SCM). 

Thank you very much for sparing your precious time for reading

You may also check my other blog

Scroll to Top