In metal fabrication, precision and organization are everything. Products (including ones that are custom-made) may involve multiple complex assemblies and sub-assemblies, all of which rely on an accurate and up-to-date Bill of Materials (BOM). A BOM is a detailed list outlining all the materials and parts (including quantities, descriptions, and associated costs) needed to manufacture your products.
It goes without saying that an accurate BOM is essential for any metal fabrication business or job shop. You need the right materials available at the right time and keep a close eye on costs to maintain product consistency/quality and customer satisfaction, and protect your margins.
Getting your BOM right is about more than just maintaining order: it means ensuring accuracy across the production process, controlling costs, preventing delays and maintaining consistent product quality.
In a complex and competitive manufacturing environment, speed and accuracy count for a lot. This is why many use ERP (Enterprise Resource Planning) software to manage and automate the process, in order to save costs and reduce wastage, as well as promote transparency through the supply chain.
In this article, we’ll explore how bill of materials management works, the challenges fabricators face and how ERP software can help simplify the production process.
What we’ll cover:
- What Is a Bill of Materials and why does it matter?
- Why U.S. manufacturers need good BOM processes
- Spreadsheets vs ERP in BOM management
- Moving from spreadsheets from ERP
- Summary
- FAQs
What is a Bill of Materials (BOM) and why does it matter?
A BOM is a detailed list outlining all the materials and parts (including quantities, descriptions, and associated costs) needed to manufacture your products, including its sub-assemblies.
Creating a BOM is a collaborative effort—involving design, engineering, procurement and production. It also spans compliance, since a BOM can provide a reliable papertrail for audits and traceability.
All manufactured products need a BOM, so being able to generate them efficiently and accurately (with the right level of detail) has obvious business benefits. You save time on admin, reduce the risk of waste and error and can reduce procurement costs, since you order the precise quantities needed.
Why U.S. fabricators need better BOM processes
BOM generation has always been a critical function of metal fabrication businesses but getting it right has become even more important in an era of rising materials costs, and complex assemblies and supplier networks. Not only that but the U.S. manufacturing industry is growing—and as businesses scale up, they’ll need to produce more BOMs while minimizing pressure on the team.
In this climate, managing BOMs manually means you’re likely to run into problems around:
1. Version control
With different teams inputting information into spreadsheets (and possibly saving them in different places), it’s easy to lose track of which version is the right one. This can lead to decisions being based on inaccurate outdated information, resulting in delays due to materials shortages and higher costs.
2. Substitute parts
Any shortages may require substitute parts—but you need a clear process for updating and communicating these changes via the BOM, so that teams can be confident that they meet the required specification for the product.
3. Lead times
Complex procurement must be carefully orchestrated to avoid delays in delivery. Even a small detail, such as the quantity of materials needed, can result in time lost trying to find the right information to move forward.
4. Business growth
Poor BOM processes may only become clear when you start to scale up your operations. Investments made in people and machinery won’t deliver value if poor BOM processes slow them down.
Spreadsheets vs ERP in BOM management
Many fabricators still rely on spreadsheets to manage their BOMs. While this can work for small operations, it quickly becomes unsustainable as the number of orders increases.
Investing in new software comes at a price—but it can pay for itself many times over by saving time, reducing costs and increasing throughput. The table below looks at how an ERP can overcome the limitations of spreadsheets.
| Spreadsheets | ERP system | |
| Cost | Minimal; part of standard office software | One-off upfront payment (on-premise) plus service and additional modules/features; ongoing subscription (cloud-based) |
| Accuracy | Human error and duplication can lead to errors | Generated automatically from centralized data |
| Version control | Multiple versions can result in poor decision-making | Automatic versioning and change tracking |
| Collaboration | Limited; multiple users end up working in siloes and from different versions. | Real-time, single-view access across departments |
| Scalability | Difficult as complexity grows | Easily handles complex and large BOMs |
| Integration | Limited; doesn’t give you full visibility | Full integration with inventory, production and procurement |
| Efficiency | Manually updating/double keying information wastes time | Streamlines workflows, uses automation |
| Best for | Micro operations | Small to mid-sized |
When managed through a modern ERP platform, your BOM becomes a ‘live’ document: meaning it seamlessly connects to quoting, scheduling, purchasing and inventory at any given moment. This integration ensures everyone across your organization works from the same, up-to-date information.
Summary
Accurate BOM management processes are a critical part of efficient, profitable manufacturing. By moving beyond spreadsheets and embracing ERP software designed for metal fabricators, you’ll gain better control over your materials, costs and production—setting your business up for long-term success.
FAQs
- Are there different BOM types?
Yes. Common ones include Engineering BOM (EBOM) for design, Manufacturing BOM (MBOM) for production and Sales BOM (SBOM) for order configuration. - How do you handle changes or revisions in a BOM using an ERP?
An ERP creates a single BOM which can be easily updated and shared with teams. - Who is responsible for maintaining the BOM?
Typically, engineers create and update it, while production and procurement teams check its accuracy and apply it during manufacturing. - How do you ensure accuracy in quantities and part numbers?
Undertake checks of suppliers and keep all relevant documentation, such as certifications and procurement information, in your ERP. - How is a BOM linked to inventory and procurement?
Inventory management teams use it to understand current stock levels, while procurement will know exactly what to order. - Can a BOM support multiple product types?
Yes. You can manage different versions of a product and customization via configurable BOMs or variant BOMs within a single BOM. - What tools or systems should be used to manage BOMs effectively?
ERP systems are the industry standard for manufacturers, including small firms and start-ups. Spreadsheets can work for micro operations but are prone to errors. - How do you handle substituted parts in a BOM within an ERP?
Your ERP provides a clear record of substituted parts. Update the BOM once with the replacement part and it will be available to your team, ensuring full traceability. - How does the BOM affect production planning and cost calculation? Details contained within your BOM will determine the accuracy of your job costing and ensure your production schedule runs on time, reducing the risk of over and understocking and potential delays.
