Bill of Material (BOM)

Published by MBA Skool Team, Last Updated: November 20, 2015

What is Bill of Material (BOM)?

A bill of material is a concept in the manufacturing industry. It is basically a list of raw materials, any sub-assemblies or any intermediary product required to produce the final product. It basically helps in the communication during the production process so as to plan the quantity of goods that would be required to meet the demand.

The bill of material can be formatted in three ways:

  • Single level
  • Indented
  • Modular

Also, to represent the bill of materials in a more easier form, it can also be represented in a tree format.

A BOM is of vital importance in Materials Requirement Planning (MRP) and Enterprise Resource Management (ERP) systems. It provides the Manufacturer’s part number (MPN) which is a series of numbers assigned to the parts by its manufacturer. Since each manufacturer provides its unique MPN to its parts, it becomes easier to track the source of a component by referring to the BOM.


Ideally a BOM should include below items

• BOM level

• Part number

• Part name

• Phase

• Description

• Quantity

• Unit of measure

• Procurement Type

• BOM notes


This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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