What Is a Bill of Materials? BOM Guide for Manufacturers

A bill of materials (BOM) is a structured list of every raw material, component, sub-assembly, and instruction needed to manufacture a product.

Growing manufacturers face a unique challenge: without a reliable BOM, production teams can't consistently build the same finished good twice.

The right BOM needs to handle quantities, unit costs, and the exact operations required at each stage of production.

A bill of materials is meant to be followed to the letter. It's a core element of production planning and inventory control, and every manufactured product should have one.

What is a bill of materials?

A bill of materials (BOM) is a comprehensive document that lists the raw materials, sub-assemblies, components, quantities, and instructions needed to manufacture a product.

A well-detailed BOM goes beyond just listing items. It includes operations, product routing, and sometimes the time, equipment, and machinery required to build the finished good.

As you can probably imagine, the complexity of a BOM depends on the complexity of the product. A manufacturing BOM for a car might fill a binder, while a BOM for a chair could fit on a napkin.

What should a BOM include?

Every BOM is different, but most well-structured BOMs share the same core elements. Here's what yours should contain:

BOM level — indicates where the item sits in the hierarchy (top-level assembly, sub-assembly, or raw material)

Part number — a unique identifier for each component, often your internal SKU or manufacturer part number (MPN)

Part name and description — a clear, human-readable name so anyone on the floor knows what the item is

Quantity — the exact amount of each component needed to produce one unit of the finished product

Unit of measure (UOM) — pieces, gallons, kilograms, feet, etc.

Procurement type — whether the item is purchased from a supplier or manufactured in-house

Reference designators — notes that indicate where or how a component is used in the assembly

BOM notes — special instructions, quality checks, or handling requirements

The more detail you include, the easier it is for your team to follow the BOM consistently and for your MRP software to automate purchasing and scheduling.

Types of bill of materials

There are several BOM types, and the right one depends on your product and production process. Here's a quick comparison:

Let's break each one down.

Manufacturing bill of materials (MBOM)

A manufacturing bill of materials displays the raw — and in some cases pre-processed — resources needed to produce a finished good. These are broken down into assemblies and sub-assemblies that get combined with other parts until they ultimately become one product.

This is the most common BOM type on the production floor.

Engineering bill of materials (EBOM)

An engineering bill of materials defines the design for a finished product. It differs from an MBOM in that it focuses on specific designs rather than production steps. EBOMs are usually created using computer-aided design (CAD) software like SolidWorks, or in the case of electrical assemblies, electronic design automation (EDA) tools.

An EBOM should include a list of parts, components, and materials with detailed engineering information such as specifications, tolerances, and standards.

Phantom bill of materials (modular BOM)

BOMs that describe a sub-assembly are called phantom BOMs or modular BOMs.

A sub-assembly is a unit that's assembled separately and then used in a larger manufactured product.

Let's go back to the mac and cheese example. If your mom makes the elbow pasta in-house rather than buying it from the store, that pasta is a sub-assembly. She needs to make the dough and then the pasta before making her mac and cheese. That process is separate from the final production process.

To capture this, you use a phantom BOM to group those components under one bill of material. Why? It makes maintenance much simpler. When a BOM gets long and complicated, small changes can be made to the phantom BOM without disrupting the complete BOM each time.

For example, if the dough recipe changes, you only edit the phantom BOM — not the final BOM.

Configurable BOM (CBOM)

A configurable bill of materials is used when a product has multiple variations.

For example, if you sell a bed with different sizes (Full, Queen, King, Cal King), colors (Black, White, Brown), and frames (Box Spring, Divan Base, Adjustable Base), you're looking at 36 possible combinations.

A CBOM lets you manage all those variations in one BOM rather than maintaining 36 separate BOMs. The main goal is reducing the effort it takes to maintain your product structures.

To create an effective CBOM, you'll typically use phantom BOMs underneath it. Phantom BOMs let you set up sub-assemblies — like different frame types and bed sizes — that can be selected to configure the end item.

Multi-level BOM

A multi-level BOM is a nested list that includes components, parts, and assemblies needed to make the final product. It displays all items in a hierarchical view — a parent-child relationship. When an item is a sub-component, all its components, including finished parts and raw materials, are shown.

Think of a multi-level BOM as a tree with several branches and leaves.

Single-level BOM

A single-level BOM contains only one level of children in an assembly. Only the immediate components needed to make that assembly are listed — no deeper hierarchy.

Here's how the two compare:

As you can see, each product doesn't always fit a specific BOM type. Sometimes you need to use multiple BOMs to create an efficient structure. BOMs should be designed in a way that fits your business — flexible enough for changes, accurate enough to be followed by anyone.

Still juggling work orders manually? See how Brahmin automates production scheduling →

Benefits of using a BOM

If you're a manufacturer, you need a bill of materials. But the benefits extend far beyond just organizing your finished products and raw materials.

Better product costing

By organizing your materials, subcontracts, and sub-assemblies, you can clearly see the cost of manufacturing your product. Having visibility into your COGS helps you maintain the best possible profit margin.

If you need to swap materials or parts to reduce costs, you can use the BOM to quickly interchange components and get an instant look at your new product cost.

Gain inventory control

By using BOMs, your inventory management software can alert you when you're running low on components so you can purchase enough to meet demand.

This helps you maintain sufficient stock to produce finished goods and make on-time deliveries. On-time delivery means happy customers. Happy customers mean reorders and positive reviews.

Reduce delivery times

Knowing what parts you need, how much of each, and the time it takes to put it all together makes it easier to estimate delivery times for your customers.

You can also make decisions to speed things up. Let's say your business manufactures bikes and most of your bikes include a sub-assembly for tires. With a structured BOM, you can see the benefit of producing tires in a completely separate production run rather than building them inside each bike's production process.

That means you assemble finished tires every day (make to stock) so your bike production doesn't wait for tires to be sub-assembled each time. Your team just picks up tires and assembles the bike.

This saves time, reduces labor costs, increases profits, and guarantees faster delivery.

Reduce waste

Waste can come in many forms. One is from your manufacturing process, and another is from holding excess inventory.

With BOMs, you know the exact quantity needed to produce your finished product, including the ratios. This makes sure you're not using too much of one ingredient, which could force you to scrap the whole batch and start over.

Ordering excess inventory because you don't understand your production demand leads to waste. Inventory is cash, and having cash tied up in unnecessary stock slows your business growth.

Improve planning and purchasing

A well-maintained BOM feeds directly into your MRP system, which can automatically calculate what you need to buy, how much, and when. This eliminates guesswork from purchasing decisions and prevents both stockouts and overstock situations.

How to create a bill of materials

Now that you've seen the benefits of using BOMs, here's how to put one together.

We'll walk through a simple BOM and then add options and sub-assemblies.

Let's assume you're a furniture manufacturer and you produce chairs.

The first step is to list the items that go into making the chair, along with the quantity and cost.

Step 1: List your raw materials

Are we done?

Well, not entirely. If your production process is simple — just a collection of raw materials and then assembly — then yes. If not, let's continue.

Step 2: Add options and sub-assemblies

Most of the time, the production process isn't that simple. Your chair could come in multiple colors and sizes. The backrest might need to be assembled first. Here's what that looks like:

Chair — Configurable BOM

Legs (4 Qty) — $2 each

Large Seat (1 Qty) — Size: Large — $6 each

Small Seat (1 Qty) — Size: Small — $5 each

Small Backrest (1 Qty) — Size: Small — $7 each

Large Backrest (1 Qty) — Sub-assembly, Size: Large — $8 each

- Wood (1 Qty)

- Cushion (1 Qty)

Brown Paint (0.25 Gal) — Color: Brown — $5 each

White Paint (0.25 Gal) — Color: White — $5 each

Black Paint (0.25 Gal) — Color: Black — $5 each

Total Cost for Small Chair = $25

Total Cost for Large Chair = $27

That's a detailed BOM. We've used configurable BOMs, phantom BOMs, and material options — all the types discussed above.

Step 3: Add operations

What about the labor and operations needed to complete this BOM? Let's add them:

Total Cost for Small Chair = $25 (materials) + $30 (operations) = $55

Total Cost for Large Chair = $27 (materials) + $30 (operations) = $57

Compare that to our original BOM. It looked like it only cost $20 to build a chair, but the actual cost was almost triple that. Creating a detailed BOM lets you see the true cost of manufacturing.

How do you calculate BOM cost?

BOM cost is the total expense of all materials and operations needed to produce one unit of a finished product. Here's the formula:

BOM Cost = Σ (Component Quantity × Unit Cost) + Σ (Operation Time × Labor Rate)

Using our chair example:

Materials cost (small chair): (4 × $2) + (1 × $5) + (1 × $7) + (0.25 × $5) = $25

Operations cost: (0.5 × $20) + (2 × $5) + (0.5 × $20) = $30

Total BOM cost: $55

If your product has sub-assemblies, roll up the cost of each phantom BOM into the parent BOM. This is sometimes called a "cost roll-up" and most MRP software handles it automatically.

Keeping your BOM costs current is critical. Material prices fluctuate, labor rates change, and suppliers adjust pricing. If you're still using spreadsheets, that means manual updates across every BOM — which gets painful fast.

Best practices for managing your BOM

A BOM is only useful if it's accurate and up to date. Here are a few practices that keep your BOMs reliable:

Assign a BOM owner — one person should be responsible for approving changes to each BOM. This prevents unauthorized edits that ripple through production.

Use version control — every time you change a BOM, save the previous version. You'll need it for audits, troubleshooting, and customer complaints.

Standardize part numbers — use a consistent naming and numbering system across all BOMs. This prevents duplicate entries and confusion on the floor.

Review BOMs regularly — material costs, suppliers, and processes change. Schedule quarterly BOM reviews to catch outdated information.

Keep BOMs in one system — when your BOM lives in a spreadsheet, your inventory in another tool, and your production schedule on a whiteboard, errors multiply. A centralized manufacturing platform keeps everything connected.

Manufacturing software for bill of materials

We've covered what a bill of materials is, why it matters, and how to create one. But where do you keep them and update them?

Unlike your mom's recipe — which is probably memorized or scribbled on a piece of paper — a complex BOM needs to live in software. If you manufacture simple products like the first BOM we created with no options, you can get by with spreadsheets. But anything more complex and you need manufacturing software.

Think about managing sub-assemblies on spreadsheets. Your material prices change over time — they go up or down — and your software can recalculate costs automatically.

Brahmin Solutions is a cloud-based manufacturing platform built for growing manufacturers doing $500K–$50M in revenue. It handles BOM management, MRP, inventory, and production planning in one system — so your BOMs stay connected to your purchasing, inventory, and production schedules without the cost or complexity of enterprise ERP.

If that sounds like what you need, book a demo and see how it fits your operation.

Frequently asked questions

What is the BOM bill of material?

A bill of materials (BOM) is a structured list of all the raw materials, components, sub-assemblies, and quantities required to manufacture a product. It serves as the definitive "recipe" your production team follows to build a finished good consistently.

What is an example of a BOM?

A simple BOM for a wooden chair might list: 4 legs at $2 each, 1 seat at $5, and 1 backrest at $7 — totaling $20 in materials. A more detailed BOM would also include operations like painting and assembly, sub-assemblies, and product variations like size and color.

How do I calculate BOM cost?

Add up the cost of every component (quantity × unit cost) and every operation (time × labor rate). For example, if your materials total $25 and your labor totals $30, your BOM cost is $55 per unit. Most MRP software automates this calculation and updates it when material prices change.

What is the difference between a single-level and multi-level BOM?

A single-level BOM lists only the immediate components needed for one assembly — no deeper detail. A multi-level BOM shows the full hierarchy, including sub-assemblies and their individual components. Multi-level BOMs are better for complex products, while single-level BOMs work well for simple items with no sub-assemblies.