A bill of materials (BOM) is the recipe for a product: the materials and quantities needed to make one unit, or one batch, of output. Almost every manufacturing calculation, from what to buy to what a product costs, starts from it.
What each line should contain
- The component or raw material.
- The quantity needed per unit or per batch of output.
- The unit of measure, matching how the material is stocked.
- An allowance for normal scrap or wastage, where it applies.
Single-level and multi-level BOMs
A single-level BOM lists the materials that go straight into the finished product. A multi-level BOM also lists sub-assemblies, each with its own BOM. Start with single-level BOMs unless you genuinely make and stock sub-assemblies.
How a BOM is used
- Material planning: output quantity times BOM quantity, less stock on hand, is what you need to buy.
- Production: materials are issued against the BOM, and differences show waste or errors.
- Costing: the BOM quantities at material cost give the standard material cost of a product.
Common mistakes
- Units that do not match stock units, such as grams in the BOM and kilograms in stock.
- Ignoring normal scrap, so every production run looks short.
- Changing the recipe without keeping a new version, so old costs cannot be explained.
Common questions
What businesses need manufacturing ERP software?
Businesses that turn raw materials into finished goods and need to know what to buy, what production used and what each product cost. It becomes worthwhile once several products share materials, production runs in batches, or costs are hard to explain.