A business that assembles what it sells has a problem a pure reseller never meets. The product on the price list does not exist on the shelf. What exists is a motor, a housing, a control board and a bag of screws, and the moment someone builds one, all of those go down by a known amount.
A bill of materials (BOM) is the list that makes that moment predictable. It says what goes into one unit of the finished product, in what quantity, and from it you can check whether you can build, consume the parts in one step and cost what you built.
What a bill of materials contains
At its simplest, a BOM is a table:
| Component | Quantity per unit | Unit |
|---|---|---|
| Motor 2 kW | 1 | piece |
| Steel housing | 1 | piece |
| Control board | 1 | piece |
| Cable set | 2 | piece |
| M6 bolt | 12 | piece |
| Thermal paste | 0.02 | kg |
Three details matter more than they look:
- The quantity is per one finished unit. A build of 10 multiplies every line by 10.
- The unit must match how the component is stocked. If paste is stocked in kilograms, the BOM says kilograms, not tubes.
- Every line is a product in your catalogue. A component that exists only on the BOM, and not in stock, cannot be reserved, consumed or costed.
Single level or multi level
A single-level BOM lists the parts bought from suppliers. A multi-level BOM lists sub-assemblies you build yourself, each with its own BOM: the finished product uses a wired control unit, and the wired control unit uses a board, a harness and a case.
Multi-level BOMs are the right model when the sub-assembly is built in advance and held in stock, because then it has its own quantity and its own cost. If the sub-assembly is only ever built as a step inside the final build, a single flat list is simpler and just as accurate.
What a build does to stock
A build has three moments, and good practice keeps them apart.
Planning. The BOM is multiplied by the quantity to build and checked against stock. Any component short is visible before anyone picks up a tool. This is where a missing €2 bolt is caught while there is still time to order it.
Reserving. The components for the job are set aside. They are still in the warehouse, but no longer available to another job or to a sale. Without this step two jobs planned on the same day both pass the stock check and the second one stops halfway.
Completing. The components leave stock in one movement per line, on the completion date, and the finished units come in. Until completion, nothing has physically left, and the record should say so.
Keeping the moments apart is what lets you plan next week’s builds against this week’s stock and still know what is free to sell today.
Costing the finished product
The finished unit is worth what went into it:
The component part depends on your valuation method. Under FIFO the motor costs what the oldest motor in stock cost; under average cost, the average of the motors you hold. Landed costs on the components, such as freight and duty, are already in their cost and flow through.
Labour and overheads are added by hand, per job or per unit: an hourly rate times the hours, a fixed assembly charge, a share of workshop rent. Businesses that skip this step report finished goods at parts cost and wonder why their margin looks better than their bank balance.
Five mistakes
Consuming parts when the job starts. The parts are then gone from the record while still on the bench, and a cancelled job needs a correction. Consume on completion.
Not counting components in usage. If reorder points are calculated only from sales, components consumed by builds look unused, and the bolts run out. Component consumption is usage.
A BOM that drifts from the bench. The workshop quietly switched to 14 bolts and a different paste six months ago. Review the BOM against a real build twice a year.
Scrap not recorded. If one board in twenty is damaged during assembly, the BOM says 1 and reality says 1.05. Either put the allowance in the BOM or record scrap as it happens.
No way to undo. Builds get recorded on the wrong date, with the wrong quantity, for the wrong product. Reversing one should put every component back in one step.
How StockBold handles assemblies
In StockBold an assembled product has a components list: each line is a product from your catalogue with a required quantity and an assigned quantity, the units reserved for this job out of the stock you hold. Reserved parts stay apart from available stock, so two jobs counting on the same units show up at once. Long lists can be split into groups, each with a cost subtotal, or viewed by supplier. Larger work is organised into projects and batches, each job with its own deadline, labour and overheads.
Completion is one step: every component leaves stock on the completion date, taken from the location holding the most and then the next, and if you choose, the finished unit comes into stock at full cost. If any component is short, completion is blocked and you see which one and by how much, with no movement recorded. The finished product is valued at its components under your valuation method, FIFO, LIFO or average cost, plus the labour, overheads and other costs you add. Before completion that figure is shown as an estimate.
Reopening a completed job reverses all its movements and keeps the components reserved, ready to complete again. Components used in jobs count as usage when reorder points are calculated, so the bolts are reordered before they run out.
Read more about assemblies in StockBold, or the help guide on components and quantities on an assembled product.