# Understanding Bill of Materials (BOM): A Comprehensive Guide

![Bill of Materials](https://www.investopedia.com/thmb/OgaT0qUXsTXbzjMrLPk-xoM71RQ=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/bill-of-materials-b4f384896bc34fd59179167b741ee852.jpg)

*— Investopedia / Zoe Hansen*

## What Is a Bill of Materials (BOM)?

A bill of materials (BOM) serves as a comprehensive blueprint for constructing, manufacturing, or repairing a product. It details the raw materials, components, and step-by-step instructions needed to ensure efficient production.

By placing the finished product at the top, followed by its individual components and materials, a BOM acts as a centralized source of information. In the engineering phase, an engineering BOM charts the course for design, while a manufacturing BOM guides the assembly process.

### Key Takeaways

*    A Bill of Materials (BOM) is a comprehensive list essential for building, manufacturing, or repairing a product, specifying raw materials, components, and instructions.
*   BOMs are crucial for both engineering design and manufacturing, as they ensure an efficient assembly process by detailing every required part and component.
*   Accurate BOMs help in reducing waste, streamlining production, and ensuring necessary parts are available, thus avoiding costly production delays.
*   BOM displays come in two formats: explosion displays break down assemblies into individual components, while implosion displays aggregate parts into their overarching assemblies.
*   BOMs play a pivotal role in inventory management and production scheduling within enterprise resource planning (ERP) and materials requirement planning (MRP) systems.

  

## Exploring Different Types of Bills of Materials

*   **Engineering BOM:** Defines the design of a finished product. This BOM is commonly based on a computer-aided design (CAD) drawing. More than one BOM may be created as part of [product lifecycle management](https://www.investopedia.com/terms/p/product-life-cycle-management.asp).
*   **Manufacturing BOM:** Lists all assemblies and parts required to complete all [manufacturing activities](https://www.investopedia.com/terms/m/manufacturing-production.asp) to make a finished item. It also defines the required packaging materials to send the product to the customer.  
    

## How to Effectively Use a Bill of Materials

Manufacturers start the assembly process by creating a BOM. A bill of materials (BOM) is a centralized source of information, listing the items and instructions needed to create a product.

Each line in a BOM details the product code, part name, number, revision, description, quantity, unit measure, size, length, weight, and specifications. It also lists alternative and [substitute](https://www.investopedia.com/terms/s/substitute.asp) parts and parts noted in drawings.

Creating an accurate bill of materials ensures that parts are available when needed and that the assembly process is efficient. An inaccurate BOM can cause production delays if time is required to locate missing parts. This increases [operating costs](https://www.investopedia.com/terms/o/operating-cost.asp).

> **Important**
>
> Manufacturing BOMs are crucial for ERP and MRP system design.

## Understanding BOM Displays: Explosion vs. Implosion

A BOM displays its information in one of two ways: an explosion display or an implosion display. An explosion display breaks down an assembly into its individual parts. A BOM implosion display links the lower-level parts to an assembly at the higher level.

For example, a computer is exploded into hard drives, chips, random access memory panels, and processors. Each processor is then exploded into an arithmetic unit, a control unit, and a register. The requirements for the arithmetic unit, control unit, and register are imploded into the requirements for the processor, which are imploded into the requirements for the computer.

## What Is a Bill of Materials Used for?

A BOM shows how finished products relate to their components. It's useful for estimating materials and costs, planning purchases, ensuring parts are available, and avoiding delays.

## What Is Product Lifecycle Management?

[Product lifecycle management](https://www.investopedia.com/terms/p/product-life-cycle.asp) covers designing, developing, producing, and disposing of products.

## What Are the Key Components of a BOM?

A BOM should list the product name, required raw materials with quantities and units, sub-assemblies, part numbers and descriptions, unit costs, and product quantity.

## The Bottom Line

A bill of materials is an important part of the engineering and manufacturing process that lists the parts and materials required to build a product. An accurate BOM helps reduce waste, streamline production, and ensure the availability of necessary parts. Bills of materials help companies manage their operations costs.

> **Article Sources**
>
> 1.  U.S. National Library of Medicine-National Institute of Health. "[Towards a Lifecycle Information Framework and Technology in Manufacturing](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5335795/)."
>     
> 2.  Project Management Institute. "[The WBS](https://www.pmi.org/learning/library/work-breakdown-structure-basic-principles-4883)."