Bill of Materials Management - What You Need to Know

Chefs create recipes. Hardware engineers create BOMs (Bill of Materials) and SOPs (Standard Operating Procedures). The BOM is an ingredients list for building your product, and the SOP is the set of instructions on how to build it.

What is a Bill of Materials (BOM)?
A Bill of Materials (BOM), which serves as the foundation for building the product. It’s a fundamental set of data, used throughout the process. A well constructed BOM clearly communicates all of the technical ingredients required to build the product.

From this information, it’s possible to determine:
✅Lead-time to procure the materials
✅Cost of Goods Sold (COGS)
✅Manufacturing processes
✅Quality of the Design for Assembly
✅Supply chain robustness
✅Cash flow requirements

A bill of materials (also known as a BOM or bill of material) is a comprehensive list of parts, items, assemblies and other materials required to create a product, as well as instructions required for gathering and using the required materials. All manufacturers building products, regardless of their industry, get started by creating a bill of materials (BOM).

Because the bill of materials pulls together all sorts of product information, it is common that several disciplines (design and engineering, document control, operations, manufacturing, purchasing, contract manufacturers and more) will consume data contained within the BOM record to get the job done right. In fact, engineers and manufactures rely so heavily on BOMs they their own special subsets called the engineering bill or materials (EBOM) and the manufacturing bill of materials (MBOM). The BOM guides positive results from business activities like parts sourcing, outsourcing and manufacturing, so it is important to create a BOM that is well organized, correct and up-to-date.

What to include in an effective bill of materials
An effective BOM doesn’t have to be generated by sophisticated software — it can be as simple as an Excel spreadsheet. BOMs are usually broken up into several categories, which makes it easy for you, your colleagues, and vendors to find what they need in your BOM. For example, the PCBA (printed circuit board assembly) manufacturer only cares about the PCBs and the components that need to be surface mounted onto the boards — the packaging components usually don’t need to be procured for the early proto-builds.

Because one of the main functions of the BOM is to ensure that the product is built right, it is best to include specific pieces of product data in the BOM record. Whether you are creating your first bill of materials or are looking for ways to improve how you create a bill of materials, here is a high level list of information to include in your BOM record:

✅BOM Level—Assign each part or assembly a number to detail where it fits in the hierarchy of the BOM. This allows anyone with an understanding of the BOM structure to quickly decipher the BOM.

✅Part Number—Assign a part number to each part or assembly in order to reference and identify parts quickly. It is common for manufacturers to choose either an intelligent or non-intelligent part numbering scheme. Whichever scheme you use, make sure you avoid creating multiple part numbers for the same part.

✅Part Name—Record the unique name of each part or assembly. This will help you identify parts more easily.

✅Phase—Record what stage each part is at in its lifecycle. For parts in production, it is common to use a term like ‘In Production’ to indicate the stage of the part. New parts that have not yet been approved can be classified as 'Unreleased' or 'In Design'. This is helpful during new product introduction (NPI) because it allows you to easily track progress and create realistic project timelines.

✅Description—Provide a detailed description of each part that will help you and others distinguish between similar parts and identify specific parts more easily.

✅Quantity—Record the number of parts to be used in each assembly or subassembly to help guide purchasing and manufacturing decisions and activities.

✅Unit of Measure—Classify the measurement in which a part will be used or purchased. It is common to use ‘each’, but standard measures like inches, feet, ounces and drops are also suitable classifications. Be consistent across all similar part types because the information will help make sure the right quantities are procured and delivered to the production line.

✅Procurement Type—Document how each part is purchased or made (i.e. off-the-shelf or made-to-specification) to create efficiency in manufacturing, planning and procurement activities.

✅Reference Designators—If your product contains printed circuit board assemblies (PCBAs), you should include reference designators that detail where the part fits on the board in your BOM. Capturing this information in the BOM can save time and help you avoid confusion down the road.

✅BOM Notes—Capture other relevant notes to keep everyone who interacts with your BOM on the same page. Documenting all this information in your BOM will keep business activities and manufacturing tasks on target.

BOM Example
Here's an example of part of a BOM that includes some of the information mentioned above. You'll notice the sheet is clean, organized and clearly labeled, and that information is noted consistently throughout it. This is just an example BOM list, and yours will likely be longer and contain more information.

In the far left column of the bill of materials example above, you'll see the name of the part. Next to that is the designator, description of the item and package type. After that is manufacturer and part number. Next is the quantity and remark.

At Onlitex, we focus on quality and provide a full range of PCB services, including procurement, manufacturing and assembly. We utilize our one-stop method and a series of useful tools to make your PCB project easy to complete. Browse our free online resources and contact our knowledgeable support team for assistance at any stage of the project.