Bill of Materials (BOM)

Bill of Materials (BOM) is a complete list of raw materials, components, and assemblies needed to produce or manufacture a product. A bill of materials follows a hierarchical format - the topmost level represents the end product and the bottom level illustrates the materials and individual components needed to manufacture the product. Manufacturer BOMs are critical to materials requirement planning (MRP) and enterprise resource planning (ERP) processes. A well managed and streamlined bill of material has a large impact on mitigating risks and cost factors associated with innacurate part information and product/part changes. BOMs are critical to calculating value-at-risk by showing the relationship between various components and the sold product. BOMs in conjunction with material requirements planning help supply chain risk managers determine the sufficient lead time to avoid risk.

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