Bill of materials (BOM)

The Bill of Materials or product tree as it is sometimes called is a document which lists the components or materials needed to manufacture a component or product. The bill of materials is in some ways a recipe which may contain other information on the ingredients or components such as price, supplier, material it is made from, manufacturing or physical characteristics.

In some cases the bill of materials will be adapted for a required use or audience where the exact amount and other trade secret characteristics required in live production may not be listed due to confidentiality. This may be the case for a bill of materials for budgeting purposes where an estimate of monthly or annual usage is required and no other data relating to live production. A bill of materials for the production department may also have an assembly drawing or detailed product formulation with notes to aid the assembly or manufacturing process.

In some cases where production formulas or component are a trade secret, the bill of materials for a product may contain a component or assembly which in itself will have a separate BOM and this will be tightly controlled for security purposes.

The bill of materials will be mainly used in production operations to set a standard production schedule or formula and for budgeting unit cost for accounting purposes.

The bill of materials can be used in several ways to analyse production and operations performance:

- Cost comparisons for planned and actual usage of raw materials in manufacturing budget

- Optimize production process, material flow and balance workload on a production line

- Enable better communication and standardization of production work methods

Bill of Materials example

An example of a simple Bill of materials for a concrete mix, this contains proportion of additives and other information about the components of the mix. Because this is a ready mix product the bill of materials is the recipe for this particular concrete mix:

  

   Fig 1. Bill of Materials for production department of a concrete mix batch plant. Figures for component and cost are for illustration purposes only and not real values.