What is BOM (Bill of Materials)?
A hierarchical list of all raw materials, components, and assemblies needed to manufacture a product.
Definition
A Bill of Materials (BOM) is a comprehensive list of raw materials, components, sub-assemblies, and the quantities needed to manufacture a finished product. BOMs are hierarchical — a multi-level BOM shows parent-child relationships between assemblies and their components. BOMs are fundamental to manufacturing ERP because they drive MRP calculations, production costing, purchasing, and quality traceability. Types include engineering BOMs (eBOM), manufacturing BOMs (mBOM), and configurable BOMs for made-to-order products.
How BOM Works in ERP
In ERP, BOMs are central to the manufacturing module. When a production order is created, the ERP system explodes the BOM to determine material requirements, calculates standard costs, generates pick lists for the warehouse, and creates purchase requisitions for missing components. Modern ERPs support multi-level BOMs, phantom assemblies, revision control, and engineering change orders (ECOs).
ERP Vendors with Strong BOM
SAP S/4HANA Public Cloud
Standardised cloud ERP with quarterly auto-upgrades and low TCO
Epicor Kinetic
ERP built for manufacturers — from job shop to enterprise
Microsoft Dynamics 365
Modular ERP + CRM tightly integrated with Microsoft 365
Acumatica
Resource-based cloud ERP — unlimited users, pay by usage
Frequently Asked Questions
What is a multi-level BOM?
A multi-level BOM shows the complete hierarchy of a product — finished goods at the top, sub-assemblies in the middle, and raw materials at the bottom. Each level can have its own routing (manufacturing steps) and is exploded by MRP for planning.
How do BOMs work in ERP?
BOMs in ERP define the recipe for manufacturing a product. When you create a production order, the ERP explodes the BOM to calculate material needs, check inventory, generate purchase orders for shortages, and plan production scheduling.