How to Create a Bill of Materials (BOM) That Saves Time, Cost, and Inventory Errors

How to create a BOM is a question every manufacturer faces when turning an idea into a real product. A bill of materials, or BOM, is your product’s building guide—it lists all the parts, materials, and instructions needed to make it from start to finish.

Imagine trying to cook a complex meal with no recipe. That’s what manufacturing looks like without a BOM. It becomes harder to keep track of parts, plan purchases, or stay on budget. Whether you’re making electronics, clothing, or furniture, a clear and complete BOM keeps everything organized.

Why Creating a BOM Matters

Creating a BOM matters because it keeps your production process clear, cost-effective, and on track. Without one, it’s easy to miss key parts, miscalculate costs, or face delays when sourcing materials.

Here’s how a BOM helps your manufacturing process:

• Inventory control: Know exactly what you need and avoid stockouts or excess.
  
• Cost planning: Get a clear view of total product cost before production begins.
  
• Purchasing guide: Use the BOM to order the right parts, in the right amounts, from the right suppliers.
  
• Production support: Provide step-by-step guidance for teams during assembly.
  
• Quality checks: Ensure nothing is missing and the final product matches the design.
  

With the right BOM in place, your team can work faster, make fewer mistakes, and deliver better products.

What to Include in a BOM

When you create a BOM, think of it as a full list of everything your product needs to be built right. From the smallest screw to the main materials, every detail counts. The more complete your BOM, the smoother your production will run.

Here’s what to include in a standard BOM:

• Item number – A unique ID for each part or material.
  
• Description – A short but clear explanation of the item and its function.
  
• Quantity – How many units do you need for one finished product?
  
• Unit of measure – The measurement used (e.g., pieces, meters, liters).
  
• Drawing number – A reference to technical drawings or diagrams, if available.
  
• Material – The type of material used (e.g., steel, plastic, cotton).
  
• Supplier – Who provides the item, including name and contact info.
  
• Lead time – How long does it take to receive the part after ordering?
  
• Cost – The unit price of each item.
  
• Revision level – Notes on any changes made to the item or BOM version.
  

Including these details makes it easier to manage production, track changes, and make smart decisions along the way.

What to Know Before You Start

Before you start creating a BOM, it helps to understand the full picture of what you’re building and how it will be made. A well-planned BOM saves time, avoids mistakes, and keeps your production smooth from the start.

Here’s what you should know before creating a BOM:

• Product design – Be clear on how the product looks, works, and what it’s made of.
  
• Manufacturing steps – Know how the product will be assembled, including tools and equipment needed.
  
• Component availability – Check if all parts are in stock or how long they’ll take to arrive.
  
• Cost estimates – Understand your budget and the target price for selling the product.
  
• Quality standards – Know what level of quality you need and any certifications required.
  
• Regulations – Be aware of any rules or safety standards your product must meet.
  
• Inventory levels – Know what you already have in stock to avoid over-ordering.
  
• Potential risks – Think about what could go wrong in sourcing or production and plan for it.
  

With this information ready, your BOM will be more accurate, reliable, and easier to update later on.

Types of BOMs: EBOM vs MBOM

There’s more than one type of BOM, and knowing the difference helps you stay organized during both product design and manufacturing.

The two main types are:

• EBOM (Engineering Bill of Materials) – Created by engineers, the EBOM focuses on how the product is designed. It lists all parts, materials, and sub-assemblies needed to build the product on paper or in CAD software.
  
• MBOM (Manufacturing Bill of Materials) – Created by the production team, the MBOM shows exactly how the product will be made. It includes everything from the EBOM, plus instructions for assembly, tools needed, and quality checks.
  

Key Differences:

Feature	EBOM	MBOM
Created by	Engineers	Manufacturing team
Used for	Design and development	Production and assembly
Detail level	General parts and structure	Step-by-step instructions

Both EBOM and MBOM are useful, but for different stages. EBOM helps you design the product. MBOM helps you build it. Keeping them separate makes it easier to manage changes and avoid confusion.

Step-by-Step: How to Create a BOM

Creating a BOM is easier when you follow a clear structure. Whether you’re working with a simple product or a complex one, these steps will help you build a BOM that works.

Step 1: List all components

Start by writing down every part, material, or item needed to build the product. Include packaging if required.

Step 2: Assign unique item numbers

Give each component its own ID number to keep things organized and avoid mix-ups.

Step 3: Add clear descriptions

Briefly explain what each item is and what it does. This helps others understand the list at a glance.

Step 4: Include quantities and units

Show how many of each item you need and the unit of measure—like pieces, meters, or liters.

Step 5: Link to drawings or specs

If you have technical drawings or design files, include a reference number or link to those documents.

Step 6: Add material and supplier info

List what the item is made of and where it comes from. Include supplier names, contacts, and lead times.

Step 7: Record unit costs

Write down how much each item costs so you can estimate the total cost of production.

Step 8: Use a structured layout

For complex products, group parts into assemblies and subassemblies. Use indentation to show the structure.

Step 9: Track revisions

Always note any changes made to the BOM. Use version numbers to avoid errors in production.

Following these steps gives you a BOM that’s clear, complete, and easy to maintain, so your production runs without surprises.

Best Practices for Better BOMs

A well-made BOM keeps your production process smooth and reliable. But to get the most out of it, you need to follow a few key best practices. These tips help reduce mistakes, save time, and make your BOM easier to manage as your business grows.

1. Keep it clear and consistent

Use simple names and clear descriptions. Stick to one format and unit of measure across the whole BOM to avoid confusion.

2. Double-check for accuracy

Make sure every part is listed—no matter how small—and that the quantities are correct. One missing item can slow down production.

3. Use a logical structure

Organize your BOM with main assemblies and subassemblies if needed. Use indentation to show how parts fit together.

4. Include supplier details

Add the name, contact info, and lead times for each supplier. This makes it easier to reorder or switch if needed.

5. Track real costs

Record the actual cost for each item. This helps you price your product correctly and avoid budget surprises.

6. Use version control

Every time you change your BOM, update the version. This helps your team stay on the same page and avoid using outdated info.

7. Go digital

Use BOM software to speed up data entry, reduce errors, and connect with other systems like inventory or ERP tools.

8. Review it regularly

Update your BOM when there’s a change in design, supplier, or cost. Keeping it current avoids last-minute issues during production.

Following these best practices keeps your BOM clean, useful, and ready to support fast, accurate manufacturing.

Recommended Tools for BOM Creation

Creating a BOM manually is fine when you’re just starting out. But as your product line grows, so does the need for speed, accuracy, and easy updates. The right tools help you build, manage, and share BOMs without getting stuck in spreadsheets.

Here are some tools to consider:

Spreadsheets (Excel or Google Sheets)

A good starting point for small teams. Easy to use and flexible, but harder to scale or track changes.

Inventory software

Inventory tools like ArmPOS help you track stock levels as you build your BOM. You can see what materials you already have, what’s running low, and what needs to be ordered—all in one place.

BOM software

Tools like Katana make it easier to create, edit, and manage BOMs. You can connect your BOM to inventory, orders, and production in real time.

ERP systems

If you’re running a larger operation, ERP software lets you manage BOMs along with other business processes, like sales, accounting, and supply chain.

PLM tools (Product Lifecycle Management)

PLM software is useful when your products go through regular design updates. It helps track every version and change in one place.

Using digital tools helps you avoid errors, stay up to date, and grow your production with confidence. Choose what fits your current setup, and upgrade when your needs grow.

Conclusion

A good BOM doesn’t need to be complicated. What matters most is that it’s clear, complete, and always up to date. Whether you’re building one product or managing many, a well-structured BOM helps you stay organized, avoid delays, and reduce waste.

Start with the basics. Add the details that matter. Use the right tools to make updates easy. And don’t forget to review your BOM regularly—especially after design changes or supplier updates.

The more accurate your BOM, the smoother your production. Keep it simple. Keep it current. And let it work for you.