Bill of Materials (BOM): What It Is and How to Automate in Manufacturing

Every configurable product a manufacturer builds, from tractors and lifts to medical devices or conveyor belts, starts with a Bill of Materials. It’s the map by which production knows exactly what components are needed and what is being built. However, as products become more complex and configurable, the BOM can become a source of errors, misalignment, and costly delays for your organization. That’s why BOM automation is such an important part of the production process, not just for operations and order fulfillment, but for the seamless experience that it can provide buyers.  

What is a Bill of Materials (BOM) in manufacturing?  

A Bill of Materials, or BOM, is a comprehensive list of materials, components, subassemblies, and instructions that are required to manufacture a product, based on the configured needs of the customer. It tells you what is needed and how it will come together.  

There are different types of BOMs managed throughout the manufacturing lifecycle, each with the most relevant information for that team to fulfill the order.  

Types of BOMs 

Each type of BOM communicates information about the product based on what the user needs to know. When the different types of BOMs communicate with each other, manufacturers can seamlessly translate what is commercially sold to the design and materials needed from each individual factory site.  

Consider the different types of BOMs for an excavator, for example.  

Sales Bill of Materials  

The sales BOM represents the customer-facing product as it is configured to their needs, including features, options, and pricing rules.  

In an excavator, this may include the following:  

• Base excavator model (e.g., EX2000) 

• Engine option: Standard Diesel or Tier 4 Compliant 

• Boom/arm options: Standard Reach, Long Reach, or Heavy Lift 

• Track type: Steel, Rubber, or Hybrid 

• Cab options: Standard, Premium (with HVAC and touchscreen controls) 

• Add-ons: Hydraulic quick coupler, rear-view camera, telematics system 

This is often created with a configure, price, quote (CPQ) system or CRM, and when created correctly, gives a valid representation of what can technically be configured (i.e., what components and variants can be combined) and what is actually available. The sales BOM helps sales create a compliant, detailed quote and order for the customer.  

Engineering Bill of Materials  

Created in CAD and PLM systems by engineers during the design phase, the engineering BOM, or eBOM, represents the product structure as it is designed to ensure optimal functionality. When the product is updated or changed, the eBOM changes with it.  

For our excavator product, an eBOM may include:  

• Hydraulic system assembly (hoses, valves, cylinders, pump) 

• Chassis frame weldment 

• Operator cab (frame, glass panels, wiring harness, seat assembly) 

• Electrical system (main harness, fuses, sensors, control units) 

• Engine and cooling subsystem (radiator, fan, alternator) 

• Fasteners and brackets defined by engineering 

• Part numbers, revision levels, and CAD file references 

However, an eBOM isn’t automatically buildable. This will depend on whether or not production and order fulfillment can reliably manufacture the product, and which materials are available. That requires a different type of BOM.  

Manufacturing Bill of Materials  

The manufacturing Bill of Materials, or mBOM, represents how a configured product is actually built in the factory or across factories. Often created with help from your ERP or MES system, the mBOM includes details like production routing, or how parts will be assembled and sourced, often based on production sequence. 

An mBOM for an excavator may include:  

• Hydraulic system kit (assembled as a module before final installation) 

• Cab assembly (with seat and wiring pre-installed for faster line integration) 

• Weldment subassembly groups for undercarriage frame and boom arm 

• Alternate parts for localized sourcing (e.g., regional hydraulic fittings) 

• Packaging and material handling items (crating, labels, protective wraps) 

An accurate mBOM helps manufacturers better manage their supply chain and prevent errors between what is sold to the customer and what is actually delivered to the customer.  

Service Bill of Materials  

Many manufacturers sell services along with their capital equipment in order to own the full solution and its lifecycle. In that case, a service BOM is necessary to support after-sales service, spare parts management, and maintenance documentation. It’s often created using the mBOM, and a well-managed service BOM supports customer satisfaction, uptime, and lifecycle profitability 

For an excavator’s field service, that may include replaceable and serviceable parts, such as: 

• Engine oil filter kit 

• Hydraulic seal replacement set 

• Electrical harness replacement 

• Track tensioner repair kit 

• Preventive maintenance schedule items (filters, belts, fluids) 

• Updated component versions (e.g., revised control module) 

In addition to other optional BOMs, such as planning BOMs for demand forecasting, costed BOMs for pricing and cost breakdowns, configurable BOMs dynamically created in CPQ for engineer-to-order and configure-to-order products, these different types of BOMs each serve a unique purpose that keeps the value chain efficient and effective.  

The challenge with BOM management

With several different types of BOMs in manufacturing, governed by different systems and teams, it’s easy for errors to surface that hold up customer delivery and, ultimately, buyer satisfaction. But it also causes profit margin erosion as errors across the value chain impact supply chain, production rework, and even penalties.  

The most important challenge for manufacturers is synchronizing these BOMs. When they’re not properly translated from one to the other:  

• Engineering changes don’t reach manufacturing in time. 

• Quotes may include non-buildable configurations. 

• Service teams struggle with incorrect part lists. 

In the current smart factory environment, where manufacturers aim to create a digital thread and a single source of truth, teams are increasingly focused on BOM automation and alignment. 

How to automate BOMs in manufacturing  

BOM automation eliminates manual translation between BOM types, e.g., from eBOM  to mBOM, by synchronizing data across PLM, ERP, and CPQ systems. Instead of manual updates, changes flow automatically to maintain design intent, manufacturability, and sales accuracy. 

BOM automation is the process of using integrated systems and rules-based logic to automatically create, update, and translate Bills of Materials. All systems essentially speak the same language, so that what is sold is manufacturable—and profitably so.  

But that means manufacturers must treat BOMs as living digital assets, rather than static spreadsheets. They must invest in data governance and collaborate across departments with a single source of truth for product and sales data.  

• Step 1: Identify where your BOMs are created and stored (PLM, ERP, CPQ, spreadsheets, etc.) and document how data currently flows between them. Note any common errors, delays, or duplicated data.  

• Step 2: Standardize your data, including how parts and versions are represented across systems, such as naming or labeling conventions.  

• Step 3: Connect PLM (design), ERP (production), and CPQ (sales), so BOM data can flow seamlessly.  

• Step 4: Define how data transforms between systems (e.g., which design parts roll up into manufacturing subassemblies), and automate validation so that a change in design is automatically flagged and updated.  

• Step 5: Assign clear ownership for BOM accuracy and data flow. Implement version control, audit trails, and change management policies. 

These steps, with help from the right CPQ or lifecycle manufacturing platform, make BOM automation in manufacturing easier to implement.  

Master management of your Bill of Materials  

With Tacton, manufacturers can take control of their BOMs and their business. Tacton is an end-to-end manufacturing lifecycle platform that helps create a single source of truth for every product configuration and Bill of Materials, ensuring accuracy and alignment so that what you configure is valid and manufacturable. We’ve been named a Leader in the Gartner® Magic Quadrant™ for CPQ Applications three times, supporting complex manufacturers across the globe.  

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