No process is more important for fashion businesses than the Bill of Materials (BOM). If you work in any fashion space, particularly on the production side, there’s a high chance you’ve heard this term used frequently already. If nothing else, it’s because it’s almost impossible to manufacture a garment without one.
Understanding the basics of this fundamental document can be the difference between a successful production run and a business in chaos. As such, new fashion brands should heavily consider these important questions; what is a bill of materials in manufacturing, what does a bill of materials include, and why is it so important for my business?
In this guide, we’ll showcase the evolution of fashion production’s most critical process, why it’s so essential, and how to approach it in the most effective way for your business.
What is a Bill of Materials (BOM)? Digital Evolution of Fashion BOMs
A Bill of Materials is a comprehensive digital recipe that details every component needed to manufacture a fashion product. Like a recipe book or a shopping list, your bill of materials will outline each raw material required to produce a finished garment – from primary fabrics to buttons and threads – alongside all the corresponding costs and quantities required.
The Bill of Materials is an essential part of the Cut, Make, Trim (CMT) manufacturing process, and is required before any production run. Usually, the responsibility of BOM creation will fall on the technical designer, production manager, or product designer. They will work closely with the manufacturer to ensure the best quality outcome for each garment.
What are Bill of Materials typed as?
There are two primary types of BOM you’ll come across in industry:
- Single-level Bill of Materials: The simplest list required for manufacturing a product. Each material needed for assembly or sub-assembly will be shown only once, along with its corresponding quantity.
- Multi-level Bill of Materials: More common in the fashion industry, and particularly in the luxury sector. Multi-level BOMs are usually complex and will detail the materials and quantities used in each individual step of product creation, including smaller details such as threads and lining.
What is a bill of materials used for and why is it so important?
In the simplest terms, a bill of materials is like a blueprint for creating a product. They are a step-by-step guide to your manufacturer for what you want in your final product and where, as well as the design, target market, and overall purpose. The clearer your Bill of Materials is, the more efficiently your product can be manufactured and the more consistent the quality of the product will be.
But this inventory of components is not only crucial for product creation, it’s essential for boosting overall business efficiency too. A clear and concise BOM will create a roadmap for fashion businesses to estimate their material costs, plan purchases ahead of time, and reduce waste caused by accidental ordering of excess material.
Effective BOMs can help brands accurately calculate their profit margins so they’re never undervaluing their products, as well as monitor fluctuations in the manufacturing costs of a garment season-on-season. This will directly impact what materials and products brands choose to continue creating based on the best value for their business. Without these essential steps, many fashion businesses could be blind to their overall losses in product creation.
How to create a Bill of Materials: Essential Components of Fashion BOMs
It’s important to try and make your BOM as accurate as possible right from a product’s sampling stage. Failure to properly detail the components you’ll need at the very beginning may lead to a longer, more costly sampling process that could hinder the speed of your overall production line. So, how do we efficiently make one?
A good Bill of Materials example will include:
1. Product ID & Description
It goes without saying that the product ID is an essential part of any product-related documentation. The description allows for additional context for the benefit of your team.
Ensure any names or terms you choose are recognisable to both your in-house employees and to your manufacturers.
2. Material Type & ID Code
As with the general product, each component in your BOM should be clearly listed and should carry its own identification code. It’s best practice to detail your materials in hierarchical order, including and trims, embellishments, and labels.
3. Colour
It’s important to note that a separate Bill of Materials will need to be made for each product colourway you’re making. So, for example, if you’re selling the same collared shirt in 3 different colours, you will need 3 separate BOMs to differentiate them for your manufacturers.
Make sure you’re detailing colours as per the specifications of your manufacturers to avoid miscommunication.
4. Material Quantities & Measurements
Alongside the listed components you need, clearly state how much of each one will be needed for the creation of your product. Units of measurement (metres, inches, feet, centrimeteres etc.) should be outlined where relevant per material.
5. Manufacturer & Suppliers
Every Bill of Materials you make must clearly reference the manufacturer you’re sending the document to and their origin location. It’s also crucial to include the suppliers sourcing each material in your list. Record the name and contact information of your suppliers in your BOM so it’s easy for your manufacturers to get in touch with them for future reorders.
6. Product Costings
The most important part of your Bill of Materials. This section will help your business monitor the overall spend for every product you’re creating. Make sure you are clearly and accurately detailing:
- Individual unit costs
- Extended costs
- Make costs
- Any freight or duty costs
- FOB price
- Landed price
- Markups
- Wholesale price
- RRP
- Gross profit
- Any other miscellaneous costs
7. Customs Codes & Rates
If you’re planning to ship or sell your products overseas, your business must take any freight or customs charges into consideration and detail these on their BOMs.
HTS, MID, or Intrastat codes may be needed depending on the countries you plan to ship the goods to. A weight in KG and a duty rate should also be included and indicated in all your overseas shipments.
How to make a Bill of Materials using Digital Processes
Traditionally, and across the majority of budding businesses, a Bill of Materials is created through a simple spreadsheet.
While this suffices in completing the basic job of detailing your materials and costs, oftentimes it can lead to costly human errors and messy data that’s difficult to consolidate. Considering the importance of your BOM when it comes to the overall spend of your business, errors in these documents are something all brands should be keen to avoid.
As a result, digital tools like ERP systems have become increasingly crucial for businesses to understand how to make a bill of materials efficiently. Fashion-specific ERP systems will facilitate a comprehensive library of raw materials, complete with individual costs and considerations for every process you’ll need to detail.
Why Fashion ERPs Transform Traditional BOMs
Integrations with modern ERP platforms not only provide a secure data log of your materials, but are essential for accurate product costing. With many fashion businesses handling multiple products at once, it can be easy to lose track of your costs using traditional spreadsheets.
Failing to calculate material costs correctly can ultimately undervalue your finished goods, or else lead to overspending on excess materials that weren’t actually required for your production run. The automated cost calculations provided within ERP systems eliminates these issues, allowing businesses to view all of their potential costs ahead of time.
Another pitfall that businesses can fall into is the fluctuation of material costs season-on-season. This is especially true for brands with repeated products across multiple collections. Intuitive ERP systems provide the option of splitting your material inventory by season, allowing you to adjust and report on price changes as well as forecast potential future costs for each product.
More than this, knowing how to create a bill of materials that will be universally understood by your manufacturers is a skill that can take fashion businesses many years to perfect. ERP systems allow for the immediate creation of BOMs that are industry approved and easy for manufacturers to read, taking the guesswork out of what needs to be included and allowing for a smoother production process.
Cloud-Based BOM Management Benefits
Utilising a fashion manufacturing software for your BOM creation is not only hugely influential for your product costs, but for the overall ease of your production chain too.
One desirable feature of these cloud-based platforms is the option of version control. Brands in the sampling stage will often consult multiple manufacturers and suppliers to develop the best possible outcome for their products.
This process can be tricky from a record keeping standpoint – producing multiple BOMs for the same product throughout the season. Employing a system like an ERP removes the need for excess spreadsheets, allowing you to view each version of your product and its material breakdown from a singular place, without affecting any historical data.
It’s also handy to maintain a constant view of the manufacturers you work with on a season-to-season basis. Reliable cloud-based ERP systems will provide a full, built-in database of your suppliers and manufacturers that you can refer to per season, allowing for an easy transfer of contact information to your BOM and other product documents.
Leading Brands Using Digital BOMs
Lulu Guinness
Known for their iconic handbag designs, Lulu Guinness is a quintessentially British brand that became a household name in the industry after the success of the Flora Basket bag – now a part of the V&A’s permanent fashion exhibition.
In spite of their early successes, the team continued to utilise simple spreadsheets for several years to manage the day-to-day operations of their business. With no system in place to streamline the development of new products or their respective bill of materials, tasks were left to clunky spreadsheets and manual data records. That’s when they decided to implement Zedonk.
“Prior to Zedonk, product creation, cost management, and reporting were all done in Excel. It was time-consuming admin to keep records up to date without data entry errors. There was duplication of work depending on the different facets of the business.”
Making the move to a cloud-based ERP meant that all of the brand’s product information – including costings – was housed under one roof, making it quick and easy to create their BOMs directly from within their Zedonk system.
B_DODI
Before discovering Zedonk, conceptual jewellery brand B_DODI would handle all of their operations manually. 80% of the workday would be taken up by time-consuming administrative tasks, hindering creativity and opportunities to grow the business. Raw materials, product pricing, and customer records were all held in messy files and spreadsheets.
One of B_DODI’s main challenges was accurately calculating selling prices. Working across wholesale and retail, costs were frequently miscalculated and Excel formulas were becoming too unreliable to maintain. After implementing Zedonk, accurate calculations for B_DODI’s Bill of Materials became a breeze, and a crucial feature in revolutionising the business. “Now I know how much everything costs. I can even calculate the costs of individual components that go into each piece of jewellery.”
Smart BOM Integration with Inventory
When selecting the right BOM management system for you, consider choosing a solution that links your product costs and calculations directly with your existing inventory.
Visualising how much of each product you have to hand across available, projected, and closing stock will give you and your team a much clearer view of what needs to be reordered and when, ensuring your BOMs are always up to date and in time for your manufacturers. Discover Zedonk’s inventory management solutions.
Maximising BOM efficiency with fashion ERP
Modern fashion brands need sophisticated Bill of Materials management to stay competitive in today’s digital-first industry. By implementing cloud-based ERP systems with smart BOM capabilities, brands can significantly reduce production errors and boost efficiency.
Ready to transform your fashion business with advanced BOM management? Explore Zedonk’s fashion ERP software and book a demo with our team to see how we can help.
