Jun 12, 2025
Bill of Materials (BOM) Management Process: Full Guide
Optimize your BOM Management Process with practical strategies.
Your bill of materials (BOM) management process can save your company a significant amount of money and time. The received wisdom is that 70% of a product’s cost comes in the early development stages and, by detailing the components, parts, and materials accurately, you protect this hard work and prevent costly errors later on.
However, all is not lost if your processes have previously failed to meet the required standards. A major life sciences firm implemented a complete, hierarchical BOM for its equipment and spare parts. As a result, the company identified more than $5 million in inventory that could be optimized. Indeed, 15% of its inventory was not linked to its current equipment, allowing it to run its processes more efficiently. In total, the company tracked more than 20,000 components across more than 500 systems, improving its spare-part mapping across plant operations.
This article provides practical strategies and tools to help you optimize your BOM management procedures.
Key takeaways
BOM management is essential for efficiency, resilience, and better inventory management
BOM feeds into product lifecycle management by pre-approving alternative components to aid smooth adjustments
A well-managed BOM provides transparency and visibility into what comprises your products, allowing you to make better decisions regarding cost, sourcing raw materials, and sustainability
Communication between stakeholders is key to the smooth operation of your production process, with BOM management software helping teams collaborate more closely.
How to optimize your bill of materials (BOM) management process
BOM in product development
Product development is, by its nature, a situation in which there are always changes and updates. This means that you need to be agile with your approach to BOM management. Align your bill of materials structure with the development lifecycle so that you keep track of components, but don’t set anything in stone until all is agreed. For example:
Stage | BOM structure |
Early stage | Use a flexible, high-level BOM to allow easy editing during prototyping |
Mid stage | Include more detail as the team stabilizes the design, adding materials, components and subassemblies |
Late stage | Finalize the complete, production-ready BOM to help manufacturing and sourcing |
Effective BOM management allows you to make the necessary adjustments as engineers trial and swap components, maintaining a flexible approach to keep track with the latest iteration of the product.
Make sure you implement version control to ensure all parties are working on the most recent version of the BOM, ideally using a cloud-based solution on which they can collaborate. Test and revise the BOM throughout the product lifecycle management process so that you do not leave the work until the late stage and risk missing vital elements from the BOM.
BOM in procurement and supply chain
Make sure that the items in your BOM are compatible with your suppliers’ capabilities and the specifications of the products that they provide. The BOM should communicate your product requirements so that you can find the right supply chain partner and procure the correct, matching items.
Collaborate with key suppliers early, providing draft BOMs to confirm whether the current composition is feasible for them. This is an opportunity for them to flag any issues with availability and to seek alternative sources if necessary.
Once you know what will go into your product, the BOM will guide you towards sourcing, as well as helping you make an accurate cost estimation, based on your suppliers’ real-time pricing data and forecast purchasing requirements. This will enable you to plan budgets and inventory management control.
BOM in manufacturing execution
Your BOM serves as a critical bridge between planning and production in manufacturing execution. Linking BOMs to production orders ensures that your team utilizes the correct components, quantities, and configurations for each job, as well as creating contingencies to deal with disruption.
Effective BOM management provides a playbook to provide consistency and continuity in the creation of your products, helping to guide your assembly processes step by step to meet your quality control requirements. Create routing maps to help team members visualize the manufacturing process and work instructions to spell out the procedures for assembling, fabricating, and inspecting a product using the materials in the BOM. These steps improve efficiency and make it easier to identify and rectify deviations and errors.
Ensure you open communication lines to create real-time feedback loops from the shop floor to other relevant departments, allowing teams to adjust materials or substitute parts for suitable replacements as issues arise. This approach allows you to benefit from the experience of your team members and reduce downtime whilst working flexibly.
For example, if a component is delayed, you can swap it out for a pre-approved alternate part listed in the BOM immediately. This reduces disruptions and allows your production flow to continue.
Change management and BOM
Changes happen in product designs and specifications regularly, and the sooner you notify all stakeholders, the greater the chance you have of a smooth transition without disruption or error. When you revise or update your BOM for a product, you must have in place a workflow to ensure all parties are working from the same version.
There are many reasons you might need to change a production process, whether it is a change in demand, looking to differentiate from a competitor, or regulatory obligations, for example. To carry out the adjustment, start with an engineering change order (ECO) and assess whether this requires changes to the design and the BOM.
If you do need to make changes to your BOM, ensure you have a clear communication plan to alert procurement, manufacturing, quality teams, suppliers, and other relevant parties in real time. You need everyone working to the correct specs to maintain effective production.
BOM and sustainability
A BOM can drive sustainability, as long as it is comprehensive and effectively maintained. When you know all of the materials that comprise your product and the required quantities of those materials, you can work with suppliers for more accurate procurement that reduces waste and increases efficiency.
In addition, the BOM management process highlights any components that are harmful to the environment or workers in your supply chain, or that are sourced from unethical suppliers, for example. This product data allows you to substitute them for a more sustainable alternative. You can also check whether your products feature materials that have become controlled or restricted by regulations in the territories in which you work. For example, the Restriction of Hazardous Substances (RoHS) Directive restricts certain harmful substances in the manufacture of electronic equipment.
Benefits of effective BOM management
Standardization and consistency in your manufacturing process mean you can maintain quality levels, even if you produce the same product at multiple facilities. It doesn’t matter who is working on that process, they have the playbook that ensures they produce a product that meets the correct specifications with the right components.
Less confusion between engineering and production as the BOM becomes the single source of truth for the design and manufacturing of your product.
Effective supply chain and materials management because you understand more clearly what goes into each product, allowing you to make more accurate forecasts when carrying out procurement procedures. This leads to better cost estimating for the entire job, helping you keep on track with budgets and timelines.
Improved production planning and scheduling, aided by this accurate forecasting. You can order the right parts from the correct supplier with an optimal lead time.
Reduced waste because you only order what you need to produce your products, leading to a more sustainable and cost-effective production process.
Common BOM management challenges
Challenge | Solution |
Managing frequent design changes | Implement change management protocols that team members must undertake, including ECOs and version control for BOM documentation |
Align cross-functional teams | Use centralized, cloud-based BOM systems to ensure real-time access for all stakeholders and to ensure all departments are aware of updates |
Inconsistent naming conventions and standards | Standardize internal nomenclature and enforce naming policies by creating automated validation rules within your BOM solution |
Training and upskilling teams | Provide regular, role-specific training sessions and clear documentation for BOM tools and processes |
Driving adoption of new tools and workflows | Involve end users in the selection process and demonstrate time-saving and accuracy benefits through pilot programs |
FAQ
What’s the difference between a BOM and a parts list?
A BOM is a structured, hierarchical document that includes all components, sub-assemblies, and materials required to build a product, along with quantities and specifications. A parts list is a simpler, often flat list of individual components without the full context of how they fit into the product structure.
How often should BOMs be reviewed or updated?
You should review and update BOM management processes whenever there are design changes, supplier updates, production adjustments, and at regular intervals during product lifecycle stages.
How do you ensure that the BOM is accurate and up-to-date?
Maintain a version control process to ensure all parties work from the latest edition of the BOM. You should also implement structured change management procedures like ECOs and ensure cross-functional teams collaborate using a single, centralized BOM system.
Conclusion
Your bill of materials (BOM) management process is key to driving a more efficient approach to product development and to maintaining quality levels that your stakeholders expect from your business. Be meticulous in creating your BOMs and review them regularly to ensure they are up to date. Communicate changes swiftly and create mitigation strategies with pre-approved alternatives in the case there is a supply chain disruption for your current required components. Collaboration internally and externally helps to keep everyone on the same page and Beebolt’s centralized supply chain management tool allows for this free flow of real-time information that keeps you on top of change management. Sign up today for a free, zero-commitment seven-day trial today.