BOM 101: How Many Levels Do You Need in BOM?

BOM 101: How Many Levels Do You Need in BOM?

I’m continue my BOM 101 series of posts. When working on bill of materials, you can often hear about the ability of BOM management software to support so-called “multi-level” BOM. You can search for the definition of multi-level BOM using Google and find many results. I found the following definition of multi-level BOM on Arena website quite balanced. Here is the passage from the Mult-level BOM article:

A multi-level BOM, also referred to as an indented BOM, depicts parent-child relationships and shows the hierarchical structure of assemblies and their related parts and components. A multi-level BOM is essentially a nested list whose parts or items are listed in two or more levels of detail to illustrate multiple assemblies within a product’s BOM. In contrast, a single-level BOM depicts one level of children in an assembly and only the components needed to make that assembly are listed.

In the past, when BOM was managed using paper and spreadsheets, to create multi-level BOM wasn’t a simple task. Computer systems create an opportunity to manage and manipulate easily with multiple levels of BOM. However, the question people are asking usually – how many levels of BOM do we need? This simple question is actually leads to many interesting discussions. From my practice it related to many factors. The most typical are – type of BOM (engineering, manufacturing, support), type of the product, maturity of product development and many others.

I found an interesting writeup about BOM levels in the Frank Watts’ book – Configuration Management Metrics. Navigate to the following link – I was able to access this book fragment using Google Books. Here is an interesting passage:

The tendencies of the companies to create multi-level assembly structures seems to be overwhelming. This analyst has witnessed 11 levels at a couple of companies and had a seminar attendee tell about 16 levels. Many departments wish to add structure for their apparent need and many needs are not in best interest of the company as a whole. Because agreement cannot be reached on one structure, often an “Engineering BOM” and a “Manufacturing BOM” are created. Often a material folks create “Planning BOM”. Many times various department can reach agreement only by adding additional layers to the BOM. 

The following diagram shows the number of levels in BOM correlated to maturity of product development. The analyst believes a better communication can be achieved by creating a BOM with minimum levels of structure.

What is my conclusion? The fact you can create multiple levels of BOM doesn’t mean you need to utilize it at full capacity. Multi-level BOMs are complicated and adding an additional work in the process of changes. How to maintain the right number of BOM levels? I’m interested to learn more about your experience. How many BOM levels do you have in your company ERP/MRP/PDM/PLM system? Speak your mind.

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.


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  • KK Garg

    ERP supports single level BoM. On POS basis, BOMS are created where material is used during a manufacturing process. Please clarify.

  • beyondplm

    If I understood you correctly, you are asking why BOM are created where materials is defined/used. The simple reason is ease of creation. If you create MBOM in ERP, then you have an access I hope it helps… However, I didn’t understand what means POS? Best, Oleg

  • KK Garg

    POS is production operating sequence. In automobile piston manufacturing process, first alloy is made with a recipe. First casting of piston is made thru die casting gravity process. It goes further to many steps in manufacturing and material is taken away like risers / runners and other material is added at various stages of production. Later it goes to machining process where core alloy material from which piston casting was made is removed in production line. In other steps surface coating is carried out. So there are many stages in manufacturing process where material is added and removed. So, we have various levels of BoM of a finished product where materiel is added and removed. Son having a single level BoM will not serve the manufacturing process which in combination uses BoM and routing. Please clarify. Best, Krishan

  • Naresh Y

    You are perfectly correct.. ERP is a transaction driven system which is used for Procurement, schedule shopfloor planning, inventory mgmt, WIP tracking… The process you mentioned can be acheived using PLM system where you create eBOM, MBOM, BOP( Bill of process) with POS and validate it i simulation tools and get the BOM and BOP approved in PLM system. Then this approved BOM, BOP has to be sent to ERP.. this data is used for all ERP activities which I mentioned above..

  • Naresh Y

    Hello Ray, what you are asking can be achieved mostly by PLM systems like Teamcenter from Siemens. And full acheived by a integrated PLM – ERP system. If you need to discuss contact me at or

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