Every business operates where it needs to purchase items from a set of suppliers and then also provide products or services to the customers. And hence this is where a bill of materials (BoM) comes into picture and becomes useful. A bill of materials is nothing but a description, which lists down all the required parts or materials that are required for the production of a particular product. The bill of materials does not provide any description of the physical or the technical aspects of the process of production but just lists down all the parts and components that are required for the manufacturing process.

It becomes a source of communication about the products between the different manufacturing locations for a company. The document is in fact not made at a single level but is formed at multiple levels to facilitate the assembly and all other processes that take place at different levels of the manufacturing process.

There are different formats that can be followed while making a bill of materials. One common format is wherein only one level is taken into consideration. In this format, the materials required for the assembly or the sub-assembly process taking place at one particular level are mentioned and accounted for. This is one of the easiest and simplest forms of bill of materials. It is easier for the manufacturing units to understand and process this particular form of bill of materials and hence is used in most of the cases. There is one another form of bill of materials, which is multi-level.

The highest and lowest levels of the assembly or production processes are all shown separately but at the same interlinked to each other. Planning bill of materials is also made in order to enhance and facilitate the planning of the entire production system to manage time, cost and resources.

But it is important for companies to pay detailed attention to the formation of these bills of materials because one small mistake can negate the effect of the entire document. There are several factors on the basis of which the document needs to be corrected. The first aspect of checking is completeness. The companies need to make sure that the BoM is complete in all aspects because missing of one small data can also create serious issues and problems. Even the consistency and the correctness of the data need to be validated. The companies should make sure that the bill of materials present data that is correct in all respects and even consistent with what is happening. Thus, bill of materials is actually a very important document and should be prepared with utmost care and concern. No mistakes can be allowed in it for the smooth execution of the entire process.