Bill of materials (BOM) management is the backbone of organized production. If you make furniture, electronics, or handmade items, a clear list of all required parts keeps your work organized. Without it, you can miss parts, lose time, or build something that doesn’t meet the goal.
BOMs are more than just checklists. They guide your team, support your inventory decisions, and keep production running smoothly. As your business grows, so does the need to manage your BOMs in a smarter, faster, and more reliable way.
What Is a Bill of Materials?
A bill of materials (BOM) is a complete list of everything you need to make a product. It shows each part, material, or subassembly involved, along with the quantity required.
If you’ve ever followed step-by-step instructions to build something, like putting together an IKEA shelf or a Lego set you’ve already used a simple version of a BOM. It tells you what’s needed and how much of it to use.
In manufacturing, a BOM acts like a blueprint. It keeps your team, tools, and materials aligned, so you don’t forget parts, run out of stock, or build the wrong thing.
Each item in a BOM usually includes:
- Part name
- Quantity
- Unit of measure
- Cost
- Notes (like color or size)
A well-structured Bill of Materials (BOM) helps you plan, order, and build more efficiently, with fewer errors. It’s the first step in making sure your product gets made the right way, every time.
Why BOM Management Is Important
BOM management might not sound exciting, but it’s what keeps your production running without surprises.
If you don’t have a proper system, you risk running out of parts, ordering the wrong materials, or building products with missing pieces. That’s time, money, and energy down the drain.
Here’s why it matters:
- Keeps everything in order
You know exactly what goes into each product—no guessing, no confusion. - Avoids delays
When your BOM is up to date, your team isn’t stuck waiting for missing parts. - Saves money
You buy what you need, when you need it. No more excess stock sitting around. - Improves quality
A clear BOM helps your team follow the same steps every time, so products come out right. - Makes scaling easier
As you grow, managing more products and parts becomes harder. A good BOM system keeps things simple.
In short, BOM management keeps your shop floor calm and your customers happy. It’s not just paperwork—it’s how smart manufacturers stay ahead.
Common Types of BOMs
Not all BOMs work the same. Different products and processes need different setups. Let’s break down the most common types of bills of materials so you can choose what fits your workflow.
Single-Level BOM
This is the most basic type. It lists all the materials and parts needed to make a product, just one level, no subassemblies.
It’s simple and quick to build, but it can get messy if your product has many parts or variants.
Good for:
- Straightforward products
- Early-stage planning
- Small businesses
Multilevel BOM
Also called an indented BOM. This one adds structure by showing which parts belong to which subassemblies. It’s like a family tree for your product.
If something goes wrong, it’s easier to trace the problem to a specific component.
Good for:
- Complex products
- Large builds with multiple layers
- Teams that need clarity at every level
Engineering BOM (EBOM)
Created during the product design stage, often based on CAD files. It focuses on how the product is designed, not how it’s built.
Good for:
- R&D and design teams
- Product prototypes
- Syncing with CAD systems
Manufacturing BOM (MBOM)
Built for production teams. It includes everything needed to make the finished product—tools, raw materials, subassemblies, and even packaging.
Good for:
- Shop floor use
- Material planning
- Costing and scheduling
Configurable BOM (CBOM)
Used for products with different versions or options. A CBOM changes based on what the customer picks—think custom furniture or electronics.
Good for:
- Custom orders
- E-commerce
- Sales teams using product configurators
Modular BOM
Breaks a product into smaller, reusable sections or “modules.” Each module can be built on its own and plugged into the final product.
Good for:
- Products with repeated parts
- Faster updates and repairs
- Reducing duplication in BOMs
Choosing the right BOM type depends on what you build, how you build it, and who needs to use the information. Start with what fits your current needs, and you can always adjust as things get more complex.
BOM Management in Excel: Pros and Cons
Excel is often the first place businesses turn to manage their bills of materials. It’s simple, familiar, and easy to set up. But once your product or team grows, spreadsheets start showing cracks.
Let’s look at where Excel helps—and where it struggles.
Pros of Using Excel
- Quick to start
Most teams already use it, so there’s no learning curve. - Custom layouts
You can format your BOM the way you like—columns, colors, notes, anything. - Free or low cost
No software license needed. If you already have Excel, you’re good to go.
Cons of Using Excel
- Manual updates = more errors
Copy-paste mistakes happen fast. One wrong cell can mess up an entire order. - Tough to track variants
Have multiple product versions? Excel gets messy fast. Each change creates a new tab or version, and things get out of sync. - Multilevel BOMs are a pain
It’s hard to show which parts belong to which subassemblies. One bad sort or delete and the whole hierarchy breaks. - No real-time updates
Excel doesn’t connect to your inventory or sales. You have to update it by hand, which takes time and leads to mistakes. - Hard to scale
The more products and parts you have, the harder it is to manage everything without missing something.
Excel is great when you’re starting. But as you grow, it can slow you down. If your BOMs are getting longer, more detailed, or harder to track, it’s time to consider switching to a tool built for the job.
How BOM Software Simplifies the Process
Managing your BOMs in a spreadsheet might feel like the easiest choice—until it isn’t. As your product list grows or you add more team members, things get messy fast.
That’s where an inventory software comes in. It does the heavy lifting for you and helps keep everything in one place.
Here’s how an BOM software makes your life easier:
1. Everything stays connected
Instead of switching between files, BOM software links your materials, inventory, production, and sales. Change something in one place, and it updates everywhere.
2. Fewer errors, less stress
No more broken formulas or sorting the wrong column. BOM software updates data in real time, so you don’t have to double-check every number.
3. Easier to manage product changes
Need to swap out a part? Update it once, and it applies to every product that uses it. You won’t have to hunt through old files or risk missing a version.
4. Clear structure
Multilevel BOMs are shown in a clean, easy-to-read format. You can see which parts belong to what and how they all fit together, without losing track.
5. Smarter decisions
With real-time cost tracking and inventory data, you can quote prices faster, avoid stockouts, and plan ahead. That means fewer delays and more confident planning.
6. Saves time
Manual work takes hours. BOM software cuts that down to minutes. More time for building, less time fixing spreadsheets.
If you’ve outgrown Excel or just want to make BOM management easier, switching to software is a smart move. It keeps your production flow smooth and your team sane.
Key Elements of a Good BOM
A good bill of materials isn’t just a list—it’s a clear map that tells your team what to build, what to buy, and how to do it right the first time.
Here’s what to include to keep things clean and useful:
Item name
Every part, material, or subassembly should have a clear name. Make sure it’s unique so no one confuses it with something else.
Quantity
List how many units of each item are needed to make one finished product. No guessing. No “should be about…” Just the exact number.
Unit of measure
Is it measured in pieces, kilograms, meters, or liters? Add that info next to the quantity so there’s no room for error.
Description or notes
A short description helps people understand what the item is. Notes can include color, size, or any detail that matters during production.
Cost per unit
Knowing the cost of each part helps you plan your budget, price your products, and manage margins. Simple but important.
Product options (if needed)
If you sell the same product in different colors, sizes, or styles, note it clearly in the BOM. It avoids confusion during picking or assembly.
Version control
If your product changes over time, keep track of BOM versions. This avoids using outdated parts or missing new updates.
Extra info (optional but helpful)
You can add things like:
- Lead time (how long it takes to get the part)
- Scrap rate (how much is usually wasted)
- Quality checks
- Assembly time
The goal is to make your BOM easy to follow. No extra fluff. Just the right info in the right place so anyone on your team can use it without slowing down.
How to Create and Manage a BOM (Step-by-Step)
- List every component: Start by writing down all the parts and materials needed for your product.
- Add quantities and units: Specify how many of each item you need, including the measurement units (pieces, meters, liters, etc.).
- Include part costs: Attach the cost for each component to keep track of your budget.
- Organize by levels if necessary: Group parts by assembly stages or categories to make the BOM easier to follow.
- Add notes or instructions: Include any special details or guidelines for handling or assembly.
- Review and update regularly: Check your BOM often to reflect design changes, pricing updates, or new suppliers.
BOM Management Best Practices
- Standardize naming: Use consistent names for parts and materials to avoid confusion.
- Use software for version control: Track changes easily by managing BOM versions with the right tools.
- Train your team: Make sure everyone knows how to update and maintain BOMs correctly.
- Keep supplier and pricing info current: Regularly update costs and supplier details to stay accurate.
- Link BOMs with inventory systems: Connect your BOM to inventory for better stock management and ordering.
Conclusion
Effective BOM management is the foundation of smooth, efficient production. By keeping a clear, up-to-date list of all your parts and materials, you reduce mistakes, avoid delays, and control costs. It helps your team work confidently and keeps your products consistent in quality.
As your business grows, a smart BOM system becomes even more important, making scaling easier and your operations more reliable. In the end, managing your BOM well means less stress, better products, and happier customers.
Investing time in your BOM today pays off in smoother production tomorrow.
