In manufacturing, small, compounding mistakes can cause more disruption than major breakdowns. A missing part, an outdated spec from a supplier, or mismatched spreadsheets between procurement and the shop floor can create confusion, delays, and costly rework—on the daily. To move faster and make decisions with cleaner data, more manufacturers are turning to bill of materials (BOM) automation.

What Is BOM Automation?

BOM automation uses software to create, manage, and update a bill of materials—the detailed list of parts, raw materials, and assemblies that make up a product. It includes anything from simple CAD-generated lists to fully integrated systems that automate versioning, sharing, and data analysis throughout the production lifecycle.

BOM automation tools typically support multilevel BOMs, in which the relationships between assemblies and subassemblies are mapped out, naming their components, quantities, and prices. Revision control, which helps manage design changes, is also common. The goal is to simplify the process of creating and maintaining accurate build information so teams always have the right instructions, specifications, and components to keep production running smoothly.

Key Takeaways

  • BOM automation replaces fragmented and manual processes with a single, connected source of product data that keeps every relevant department aligned.
  • Integrating BOM automation with ERP or material requirements planning systems extends that data across procurement, costing, and inventory for real-time visibility and control.
  • Automated BOMs improve accuracy, traceability, and forecasting—reducing costly errors while strengthening compliance and decision-making.
  • Adoption is accelerating as manufacturers recognize BOM automation as a foundation for scalable, efficient, and resilient operations.

BOM Automation Explained

Manually drafted bills of materials are often fragmented, with different teams maintaining their own versions. Automated BOMs, by contrast, serve as a connected digital backbone that keeps product data consistent and accessible across engineering, procurement, inventory, quality, and finance departments.

When linked with an ERP or material requirements planning (MRP) system, BOM automation continually updates component data, records revisions, and maintains a clear audit trail. This level of visibility helps manufacturers sufficiently improve accuracy to support costing and inventory management, decrease the chances that teams will be working with outdated information, and respond faster to design changes or product recalls.

BOM automation can also be implemented through standalone tools that update and share BOM data independently, but these solutions tend to lack the full cross-department visibility and data synchronization achieved through ERP or MRP integration. But whatever the approach, the goal is the same: to turn static lists into living data that lays the foundation for faster, more confident decisions.

The Bill of Materials Lifecycle

Whether manually created or automated, the BOM lifecycle starts at design and may end well after the product is on the shelves. In a manual process, the designer or engineer builds the BOM in spreadsheets, listing parts, quantities, and specifications that circulate among design, finance, and procurement teams for review and approval. Each change requires manual updates and resubmissions, introducing more room for errors with each new version.

With automation, on the other hand, those same stages happen in real time. Data from design tools automatically populates the BOM with item IDs, measurements, alternatives, and vendor information. Integrated systems share updates instantly across departments, maintain revision histories, and trigger related actions, such as cost recalculations or compliance checks. Operators can also record notes directly into the system, giving managers immediate visibility into production activity.

What Are the Limits of Manual BOM Management?

In 2023, the Manufacturing Leadership Council reported that 70% of manufacturers still entered data manually. In these environments, even small mistakes—a mistyped part number or sending procurement an outdated BOM—can result in downstream problems, such as incorrect orders, excess or missing materials, and schedule delays. The resulting rework and, if necessary, the additional expedited shipping costs can quickly eat into margins.

Manual processes also render change management inconsistent. Without automated revision control, departments could be handling different versions of the same document, leading to mismatched parts counts, inaccurate costing, and conflicting production instructions. Teams end up spending time verifying information and resolving discrepancies, time that should have been used building products instead.

Scalability becomes another barrier. A simple, single-level BOM might be manageable in a spreadsheet, but multilevel BOMs with hundreds of assemblies or thousands of parts can quickly overwhelm teams. Add new versions and revisions to those multilevel BOMs, and manual tracking becomes unsustainable. Worse, errors often show up late—during procurement or on the production floor—when the impact on cost, timelines, and quality is hardest to absorb.

For operations managers and supply chain leaders, these limits create a reactive product lifecycle where problems are not discovered until they disrupt production.

What Are the Benefits of BOM Automation?

BOM automation improves visibility, accuracy, and speed throughout the entire production process. The following benefits show how software-managed BOMs help manufacturers plan production with fewer processing errors and greater ability to scale efficiently:

  1. Increased Productivity

    Automation eliminates many of the manual tasks involved in creating, updating, distributing, and revising BOMs. With less time spent verifying parts lists, managers can move on to higher-value work, such as production planning and process improvement. With real-time updates and automatic version control, departments can devote time that would formerly have been spent coordinating on actually building products and keeping operations running smoothly from design through delivery.

  2. Fewer Errors

    Typing part numbers, quantities, and prices by hand opens the door to errors. The same caveat goes for manually sharing documents that have gone through multiple revisions. BOM automation maintains data consistency by having one, single authoritative record that’s automatically refreshed and accessible to the right people at every stage of production. The result is fewer wrong-part incidents, less rework, reduced paperwork, and more accurate inventory and cost planning.

  3. Improved Visibility and Reporting Accuracy

    Automated BOMs can connect directly with procurement and materials tracking systems, giving operations and procurement managers real-time insights into component availability and demand. Because every update—derived from a design change, vendor swap, material shortage, or other source—is automatically reflected across every system, reports always present the latest data. This visibility helps teams forecast needs more precisely and adjust production schedules appropriately.

  4. Accurate Cost Forecasting

    Since each component in a BOM is linked to the most current supplier and inventory data, cost rollups stay accurate and up to date. Finance teams can forecast production costs with a higher level of precision, while operations can base their plans around actual numbers, not stale estimates. In advanced systems, scenario modeling facilitates instant cost comparisons when substituting materials or suppliers, helping teams evaluate the cost impact of sourcing decisions in real time. Reliable cost analysis allows for stronger budgeting, pricing, and margin control.

  5. Enhanced Traceability

    Automated BOM systems create a digital thread that tracks the details of every update from design through finish goods. This strengthens supply chain traceability and compliance oversight. Every revision is logged with its effective date, so manufacturers see the full history of each SKU. In the event of a recall or quality issue, teams can run a single query to trace all affected parts, shipments, and suppliers. Root-cause analysis and corrective action becomes faster and more precise.

  6. Optimized Inventory

    When integrated with inventory systems, an automated BOM turns product structure and design changes into accurate planning data. Real-time updates to quantities, lead times, and component availability means the procurement team orders what’s needed—no more, no less. Meanwhile, inventory teams know what to expect, so they can prepare for upcoming builds. The result is lower carrying costs, fewer shortages, and a steadier production flow.

  7. Better Collaboration and Consistency

    No longer do departments have to keep separate versions of BOMs. Live updates and approval tracking make collaboration seamless from concept to finished product. This living record eliminates countless versioned spreadsheets, manual handoffs, and duplicate files. Role-based automated workflows can reduce ambiguity and clarify accountability, so every team member knows what they’re responsible for and when—promoting a more collaborative and efficient environment.

  8. Scalable Operations

    As product counts, variants, and complexity grow, manual BOM processes invariably hit their limits. Software-based BOM management is capable of creating and handling multilevel BOMs for each product variant, at significant volume, without additional administrative burden—all while maintaining slim error rates. This supports business growth, giving manufacturers the ability to expand product lines and even earn a competitive edge.

How Does BOM Automation Work?

BOM automation relies on connected systems that standardize, synchronize, and share product data throughout the organization. Here’s how these systems work together:

  • Digital BOMs: Automation begins with digital BOMs that are generated directly from design files. No pen and paper, no manual data entry. A digital BOM will evolve with the product, so production planning and inventory management remain in sync with current product information.
  • Centralized data repository: All BOM information is stored in a single secure location that updates in real time. Engineering, procurement, and supply chain teams access the same record, eliminating the risk of conflicting versions and handoffs.
  • ERP integration: Integrating BOMs with an ERP system extends automation to purchasing, costing, and inventory processes. Design decisions can directly connect to financial and operational outcomes, for instance, to better inform business decisions.
  • Real-time reporting: Continuous data synchronization allows reports to update immediately. Managers can monitor material availability, costs, and revisions as they occur, making it possible to track risks early enough to keep production on schedule.
  • Automated versioning: A revision is automatically created whenever a BOM changes, preserving the previous one for traceability. This creates a complete audit trail for compliance, change management, and quality control. Older versions are stored for traceability but are “hidden” from regular use and can’t be selected for new jobs or production orders.

Tips for Successful BOM Automation

Automation can provide greater value when it’s approached and implemented with intention. Setting goals, preparing data, and equipping people before implementation increases the likelihood of a smooth transition from manual BOM management to a digital-first environment. These tips can guide you:

  1. Gather your goals and requirements: Define metrics for success. Faster production planning, more accurate cost analysis, and increased supply chain transparency are common. Goals help steer automation efforts toward business priorities while establishing a baseline for success.
  2. Ensure BOM data is consistent: Automation can’t fix inaccurate or incomplete data. Before going live, confirm that part numbers, revision controls, and inventory are accurate and complete. Consistent, reliable data provides the foundation for accurate reporting, stable production costs, and effective change management.
  3. Anticipate change management objections and challenges: Employees sometimes worry that new tools will disrupt or threaten established workflows, which can create barriers to adoption. Share the rationale for automation early, citing the benefits to both the business and individuals. Give teams a clear overview of changes—and challenges—they can expect as the process unfolds.
  4. Invest in comprehensive training: Pairing automation with training can improve productivity and job satisfaction. Although fears of job replacement remain common, in practice, automation can create opportunities for upskilling and role evolution—not elimination.
  5. Consider a pilot before full go-live: Testing the system on a smaller scale helps reveal workflow gaps, validates ROI, and builds user confidence. A pilot phase also sets the stage for a smoother enterprisewide rollout.
  6. Have the right technology in place: A cutting-edge BOM automation solution should support multilevel BOMs, scale with growth, and provide real-time reporting. The right platform makes it easier to sustain long-term efficiency and visibility.
  7. Solicit feedback and improvements: BOM automation isn’t a “set it and forget it” initiative. After deployment, regularly gather feedback from engineering, procurement, and production teams to refine workflows, identify solutions to potential challenges, and adapt to changing needs. Continuous improvement keeps the system aligned with business goals and supports consistency throughout the product lifecycle.

The Future of BOM Automation

The near future of BOM automation is being shaped by machine learning and AI to expand what companies can do with their product data. Using historical data and predictive analytics, machine learning is making it possible to forecast costs more accurately and flag potential errors before they disrupt production schedules. AI is deepening integration of digital twins, product lifecycle management, and supply chain data to facilitate faster decision-making. Manufacturers can also expect smarter, configuration-driven BOMs and stricter governance over engineering change orders.

According to Verified Market Reports, the global BOM software market—valued at approximately $1.5 billion in 2024—is projected to more than double by 2033, surpassing $3.2 billion. This growth reflects manufacturers’ accelerating shift toward automated BOM processes that support mass customization, integrate with ERP platforms, and provide greater supply chain visibility. The trend points to a future where manufacturers spend less time managing spreadsheets and more time using BOM data to encourage innovation and gain competitive advantages.

Automated BOMs Deserve a Modern ERP to Match

Integrating BOM with an ERP turns product data into a shared, real-time resource for design, procurement, inventory, finance, and shop-floor teams. With NetSuite ERP, for instance, updates flow automatically among teams, so everyone has access to the same data on materials, costs, and schedules. BOM changes are linked directly to inventory, production, and purchasing records, helping teams plan materials, reduce shortages, and prevent over‑ordering. Manufacturers in turn gain clearer insights into costs, resource use, and supply chain performance, allowing them to act faster and make more confident decisions. And, automated version control and approval workflows keep every department aligned—whether updating a component spec or tracking cost rollups across multiple assemblies.

BOM automation changes the way manufacturers manage product data, replacing error-prone manual processes with systems that improve accuracy, visibility, and scalability. From faster revisions to better collaboration across departments, the benefits reach every stage of the product lifecycle. Adoption is accelerating, and the market growth reflects that companies are already realizing its value.

BOM Automation FAQs

What is a BOM process?

A bill of materials (BOM) process involves creating and managing the list of parts, subassemblies, and materials used to build a product. It also involves maintaining revision control so all departments work from the same up-to-date data.

What’s the difference between a BOM and a parts list?

A bill of materials (BOM) is a detailed, hierarchical document covering every component in a product, while a parts list shows only the parts required for a single assembly. BOMs provide the structure and traceability needed to manage a complex product.

Why is BOM automation important?

Bill of materials (BOM) automation replaces error-prone manual processes with interconnected systems that keep data consistent across engineering, procurement, and production teams. It also speeds up revisions, improves visibility, and allows manufacturers to manage multilevel BOMs efficiently.

How does BOM automation integrate with ERP?

When connected with an ERP system, bill of materials (BOM) data flows automatically into sourcing, inventory, order management, production planning, and costing modules. This aligns revisions, material, design, and cost information for all departments, in real time.

How difficult is BOM automation?

Bill of materials (BOM) automation implementation depends on readiness, data quality, and change management practices. With clear goals, reliable data, and proper training, many manufacturers will find the transition to be straightforward and rewarding.