Bill of materials

In manufacturing companies, the quality of planning determines the success or failure of a production order. Every part must be in the right place at the right time, and every quantity must be calculated precisely. If even one component is missing, the entire production process comes to a standstill. This is where the bill of materials comes in: it systematically documents all components, materials and quantities required for the manufacture of a product. From simple tools to complex machines – without this structured overview, modern manufacturing processes would be almost impossible to control. This article explains what a bill of materials is, what types there are and how you can use them optimally for your company.

Bill of materials: definition, types and creation in production

Manufacturing companies need precise planning bases for their manufacturing processes. A bill of materials fulfils precisely this function: it systematically documents all components required to manufacture a product. Without this central overview, production processes would quickly come to a standstill, materials would be missing or the wrong parts would be ordered. The list records both individual parts such as screws and washers as well as complex assemblies and assigns them the required quantities.

Various departments benefit from well-maintained bills of materials: Purchasing determines material requirements, production plans workflows, warehousing organises storage, and quality assurance checks for completeness. This overview shows you what types of bills of materials exist, what their typical structure looks like, and what you should pay attention to when creating them. You will also learn how different types of lists, such as quantity bills of materials, structure bills of materials, and variant bills of materials, are used in practice and what mistakes you should avoid.

What is a bill of materials? – The basics

A bill of materials is a list of all the components that make up a finished product. It specifies exactly which individual parts and assemblies are required and in what quantities. The basic principle always follows a hierarchical logic from top to bottom: starting with the finished product, the components it consists of are systematically broken down.

This breakdown serves as a data basis for numerous areas of the company. Design and development use it for technical documentation, while production uses it to plan its workflows. Purchasing uses the bill of materials to determine its procurement requirements, costing calculates production costs and spare parts management administers service components. Each of these departments accesses the same master data, which ensures consistency and up-to-date information.

Without structured lists, problems quickly arise: materials are ordered twice, quantities do not match, or outdated part numbers lead to delays. Integrated systems prevent such inconsistencies by allowing all parties involved to work with a common database. Especially for complex products with many components, this centralised management is indispensable for a smooth production process.

Structure of a bill of materials – these components are important

The structure of a bill of materials usually follows a tabular format, which allows for clarity and quick entry. The header contains general information such as the list number, the date of creation and the corresponding drawing number. This header data refers to the entire document and enables clear identification and versioning.

The main part consists of the item details, in which each required part is listed. Each item contains at least the part number for unique identification, a description of the component, the required quantity and the corresponding unit of measure. Additional columns may contain information such as weight, suppliers, purchase prices or storage locations, depending on the intended use of the list.

Sub-items are used for more complex products. These are used when sub-quantities of an item have different installation locations or when further detailing is necessary. The clear structure of header, items and, if necessary, sub-items ensures that all parties involved can quickly find the information they need. A uniform structure throughout the company also facilitates the training of new employees and reduces misunderstandings between departments.

Example parts list – how it looks in practice

An example parts list best illustrates the practical structure. Let’s take a simple toolbox as a product: The header would contain the list number 20145, the date of creation and a reference to the technical drawing. This is followed by the individual items in table form.

Item 1 could be part number 3001-K with the description ‘box base’, quantity 1 piece. Item 2 has the number 3002-D for ‘box lid’, also 1 piece. Item 3 lists four hinges under 5500-S, while item 4 with the number 5501-V specifies two fasteners. Position 5 lists one carrying handle under 7000-G, quantity 1 piece.

This clear presentation enables the production department to see all the required components at a glance. The purchasing department can place orders directly using the part numbers, while the calculation department can calculate the material costs using the quantity information. The uniformity of the structure ensures that no one has to guess where to find which information. Such standardised formats have proven themselves over decades and are also retained in modern production systems.

Bill of materials types – what types are there?

Different types of bills of materials cover different requirements in production. The choice of the appropriate type depends on the complexity of the product, the information needs of the users and the manufacturing structures. While simple products can manage with a basic variant, complex products with several production stages require more differentiated forms of presentation.

Each list type has specific strengths for certain applications. Some focus on a pure quantity overview without a hierarchical structure, while others map the production levels in detail. Still others are particularly suitable for modular products or for products that are produced in several variants. The right choice contributes significantly to the efficiency of production planning.

Modern production systems usually support several types of bills of materials in parallel, so that different departments can use the display that is optimal for them. It is crucial that all variants are based on the same master data to ensure consistency. The following sections explain the most important types in detail and show when which form is appropriate.

Quantity bill of materials

The quantity bill of materials is the simplest form and lists all the individual parts required without taking their hierarchical relationships into account. Assemblies are broken down into their individual components so that only the lowest level appears. If a part occurs more than once, it is only listed once – but with the total quantity across all uses.

This representation is particularly suitable for determining requirements and procurement planning. Purchasing can see at a glance which materials need to be ordered in what total quantity without having to worry about production stages. This overview is also helpful for cost calculations, as the material costs can be calculated directly from the quantities and purchase prices.

However, the bill of materials does not provide information on how the parts relate to each other or in what order they are installed. It is therefore less suitable for production itself. Multiplying the listed quantities by the number of units to be manufactured results in an order-related list. This form is mainly used for products with a flat structure that consist of few components and do not have nested assemblies.

Structural bill of materials

A structural bill of materials depicts the complete product with all manufacturing levels and their logical relationships. It shows not only which parts are required, but also how they are hierarchically related. Assemblies are represented with their subcomponents, making the entire product structure transparent. This multi-level representation enables a deep understanding of the product structure.

This type of list is particularly valuable for production planning, as it reflects the manufacturing sequence. First, individual parts are assembled into sub-assemblies, which in turn are assembled into larger assemblies until the final product is created. The quantities specified can refer either to the final product or to the directly superior assembly, which should be explicitly indicated.

However, for products with many levels, the display can become confusing as the table becomes very wide. In such cases, it is advisable to switch to a modular system with several linked lists. Despite this limitation, the structured bill of materials remains the preferred format for medium complexity, as it optimally combines completeness and traceability.

Modular bill of materials

The modular principle is deliberately limited to one production level at a time and is therefore referred to as single-level. Each assembly is given its own separate bill of materials, which only lists the directly associated components. These assembly lists are then referenced in higher-level lists, creating a modular system.

This approach offers considerable advantages for complex products with many levels. Each list remains clear and focused on a clearly defined area. Changes to an assembly only need to be made in its own list and automatically affect all higher-level products in which it is used. This reduces maintenance effort and minimises sources of error.

However, effective application requires software support that can manage recursive structures. The system must be able to resolve nested lists and generate the complete bill of materials if necessary. Modern production planning systems master this function as standard. The modular bill of materials is particularly suitable for companies with a modular product structure, where the same assemblies are used in different end products.

Variant bill of materials

If a product is manufactured in several versions that differ only in details, the variant bill of materials is used. It combines several individual lists in one document and indicates which parts are used in which variant. Identical components are listed only once, while variant-specific parts are marked accordingly.

A typical example is products that are offered in different colours or equipment variants. The basic structure remains the same, only certain components such as housing parts, covers or additional equipment differ. Instead of maintaining a completely separate list for each variant, a common list with variant identifications is managed.

This method significantly reduces administrative effort and minimises errors when changes are made to common parts. If a standard component is changed, the adjustment only needs to be made once and automatically applies to all variants. This approach is ideal for companies with a wide range of products but similar basic structures. However, the software must be able to select the correct variant when entering orders and compile the corresponding parts.

Creating a bill of materials – step-by-step instructions

The creation process begins with the careful entry of all individual parts and raw materials in the master data management system. Each part requires a unique identification number, a precise description and all relevant technical information such as dimensions, weight and unit of measure. Additional information such as purchase prices, suppliers and storage locations make the work of subsequent users considerably easier.

Once the basic data is available, the appropriate form of presentation must be selected. For simple products consisting of a few individual parts, a quantity parts list is sufficient. More complex products with several assemblies require either a structured parts list or the modular principle. The decision should also take into account how clear the subsequent presentation will remain and whether frequent changes are to be expected.

Then you determine the specific form: Which columns should the table contain? Which header data is necessary? A uniform structure throughout the company facilitates use across departmental boundaries. You should also define which areas have access and which specific information is relevant to them. Regular updates ensure long-term data quality and prevent outdated lists from leading to production problems.

Creating a structured bill of materials – note special features

Creating a structural parts list requires particular care when it comes to the hierarchical structure. First, define the top level with the end product. Below this, arrange the main assemblies, which in turn consist of sub-assemblies and finally individual parts. This multi-level nesting must reflect the actual manufacturing logic so that the list can be used for production planning.

The quantities specified at each level deserve special attention. Clearly indicate whether the quantity refers to the end product or to the directly superior unit. A screw that appears twice in an assembly and is used three times in the end product appears either with a quantity of 2 (referring to the assembly) or with a quantity of 6 (referring to the end product). Consistent conventions prevent misunderstandings.

With many manufacturing levels, the presentation quickly becomes confusing. Consider whether it would make more sense to switch to a modular principle, where each assembly has its own list. The structural bill of materials is ideal for medium complexity, where it still combines completeness and clarity well. Modern software supports both forms of presentation and can switch between them.

Advantages and benefits of parts lists

Precisely maintained lists significantly minimise errors throughout the entire production process. Incorrect material orders, missing components or mix-ups during assembly are largely eliminated by clear documentation. Everyone involved knows exactly which parts are needed and in what quantities, which reduces queries and clarification efforts.

Resource efficiency increases significantly through optimised quantity planning. Excess inventory is avoided because only the quantities actually required are procured. At the same time, timely demand determination prevents materials from being missing and production from having to be interrupted. This balance between availability and minimal storage costs pays off directly in the cost structure.

All departments work with the same database, which ensures consistency. Development documents its design, costing determines costs, purchasing orders materials and production builds the product – all based on identical information. This consistent use of data not only increases efficiency, but also product quality, as information loss and transmission errors between departments are eliminated. Changes are maintained centrally and are immediately available to all users.

Avoid common errors and risks

Inaccurate or incomplete descriptions of components cause considerable additional work. Employees have to ask questions, consult drawings or, in the worst case, guess which part is meant. Such ambiguities delay production and increase the risk of errors. Therefore, invest time in precise descriptions and unique part numbers from the outset.

Incorrect quantity specifications have far-reaching consequences for the entire production chain. The calculation determines incorrect costs, the purchasing department orders too much or too little material, and production cannot complete orders or is left with excess stock. These errors propagate through all downstream processes and cause time losses and additional costs.

Outdated lists pose particular risks if changes are not consistently updated. A part that has been replaced by a successor model continues to be ordered even though it is no longer available. Or changed specifications lead to quality problems in the end product. Therefore, establish fixed processes for updates and regularly check that all lists are up to date. Modern software supports this by automatically transferring changes from master data and version management.

Parts lists in ERP and PPS systems

Modern business software is the central tool for professional list management. These systems offer extensive functions for creation, editing and management, drawing on existing master data such as material numbers, suppliers and prices. Integration into the entire system landscape ensures that changes to master data are automatically reflected in all associated lists.

Links to technical documents such as CAD drawings, assembly instructions or quality specifications are particularly valuable. These documents can be linked directly to individual items, allowing users to access relevant additional information with a single click. Import and export functions enable data exchange with external systems, for example when the design department works with specialised CAD software.

Combining this with work plans opens up further potential: the system can calculate the resources required, such as machines, personnel and tools, and calculate the expected costs in detail. When production orders are created, the assigned materials are automatically transferred and the stock is reserved accordingly. This end-to-end automation reduces manual effort and significantly minimises sources of error.

Conclusion

Bills of materials form the foundation of efficient production processes in manufacturing companies. They systematically document all required components and quantities, create transparency about product structures and serve as a common database for all departments involved. The right choice between quantity bills of materials, structure bills of materials, modular bills of materials or variant bills of materials depends on product complexity and company requirements.

Careful creation, consistent maintenance and professional software support are crucial for success. Only when lists are up to date, accurate and accessible to everyone can they unfold their full potential: error-free processes, optimised resource utilisation and improved product quality. Use the principles presented here and establish clear processes for management – your production will thank you for it.

Zurück zur Lexikon-Übersicht