--- title: Five advantages of a multi-level bill of Materials description: To understand the benefits a multi-level bill of materials can bring to a manufacturing business we must first look at the alternative. image: https://blog.shorts.uk.com/hubfs/Stock%20images/Man%20in%20manufacturing%20industry%20creating%20a%20multi%20level%20bill%20of%20materials.jpeg --- [![Shorts_logo_White](https://blog.shorts.uk.com/hubfs/New%20Site%202018/Shorts_logo_White.svg "Shorts_logo_White")](https://www.shorts.uk.com/) [Blogs & News](https://blog.shorts.uk.com/) > [GENUS Management Accounts](https://blog.shorts.uk.com/topic/genus-management-accounts) # Five advantages of a multi-level bill of Materials Alicia Williams - 12 September 2018 ###### Select topic - Please Select - [ Audit ](https://blog.shorts.uk.com/topic/audit) [ Business Taxes ](https://blog.shorts.uk.com/topic/business-taxes) [ Radius – R&D Tax Relief & Patent Box ](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) [ Corporate Finance ](https://blog.shorts.uk.com/topic/corporate-finance) [ GENUS Management Accounts ](https://blog.shorts.uk.com/topic/genus-management-accounts) [ VAT ](https://blog.shorts.uk.com/topic/vat) [ Private Client ](https://blog.shorts.uk.com/topic/private-client) [ Payroll ](https://blog.shorts.uk.com/topic/payroll) [ EOT ](https://blog.shorts.uk.com/topic/eot) [ International Taxes ](https://blog.shorts.uk.com/topic/international-taxes) ![featured image](https://blog.shorts.uk.com/hubfs/Stock%20images/Man%20in%20manufacturing%20industry%20creating%20a%20multi%20level%20bill%20of%20materials.jpeg) ###### To understand the benefits a multi-level bill of materials can bring to a manufacturing business we must first look at the alternative. Most manufacturing companies will use a bill of materials in some form when designing and manufacturing their products. In its basic form this is a list of all the materials required and perhaps the routing steps to manufacture the item, this is often referred to as a single level bill of materials. While this is useful and gives guidance, it is perhaps most beneficial when producing more simplified items comprising of only 2 or 3 parts. However, it is often the case that companies are manufacturing a product that is not only made up of raw materials but also sub-components that themselves require manufacturing. In these instances, the single level bill of materials can become more difficult to navigate, can be prone to more errors and is far less flexible if/when revisions are required at a later stage. See the example below*. Manufactured item = 3 Wheel Trolley ## Single Level Bill of Materials | **Part No** | **Description** | **Unit** | **QTY** | | --- | --- | --- | --- | | 112-001 | Plywood,12mm,2400x1200 | SH | 0.125 | | 111-006 | Varnish, Semi Gloss | L | 0.05 | | 130-001 | Labour | HR | 2.75 | | 110-001 | Side Piece | EA | 6 | | 110-002 | Top Piece | EA | 3 | | 105-001 | MS Flat 80x8 | M | 0.75 | | 111-001 | Galvanising | KG | 0.009 | | 102-108 | Wheel, with tyre, 100mm | EA | 3 | | 100-001 | MS Bolt, M10x70, Galv | EA | 3 | | 100-002 | M10, washer, Galv | EA | 6 | | 100-003 | M10, Nut, Galv | EA | 9 | | 100-004 | MS Bolt, M10x30, Galv | EA | 3 | | 100-005 | M10 Square Nut | EA | 3 |   ## Multi-Level Bill of Materials | **Level** | **Part No** | **Description** | **Unit** | **QTY** | | --- | --- | --- | --- | --- | | 1 | 120-001 | Trolley, 3 wheeled | EA | 1 | | 2 | 112-001 | Plywood Platform | EA | 1 | | 3 | 106-001 | Plywood,12mm,2400x1200 | SH | 0.125 | | 3 | 111-006 | Varnish, Semi Gloss | L | 0.05 | | 3 | 130-001 | Labour | HR | 0.65 | | 2 | 110-001 | Wheel Housing | EA | 3 | | 3 | 110-003 | Side Piece | EA | 2 | | 4 | 105-001 | MS Flat 80x8 | M | 0.1 | | 4 | 111-001 | Galvanising | KG | 0.001 | | 4 | 130-000 | Labour | HR | 0.1 | | 3 | 110-002 | Top Piece | EA | 1 | | 4 | 105-001 | MS Flat 80x8 | M | 0.05 | | 4 | 111-001 | Galvanising | KG | 0.001 | | 4 | 130-000 | Labour | HR | 0.5 | | 3 | 102-108 | Wheel, with tyre, 100mm | EA | 1 | | 3 | 100-001 | MS Bolt, M10x70, Galv | EA | 1 | | 3 | 100-002 | M10, washer, Galv | EA | 2 | | 3 | 100-003 | M10, Nut, Galv | EA | 3 | | 3 | 100-004 | MS Bolt, M10x30, Galv | EA | 1 | | 3 | 100-005 | M10 Square Nut | EA | 1 |   As you can see from the example the multi-level bill of materials provides a much clearer picture as to the structure of the item being manufactured. We can see the trolley is made of two major parts, the Plywood platform and the Wheel Housings, from there we can again see the breakdown of each of these sub-components in terms of both materials/sub-components and labour. Whereas on the single level bill of materials it is not clear as to how the different components come together to form the end product. It also allows for easier revisions, if the trolley was to be changed to a 4-wheel version then you can simply update the quantity of the Wheel Housing from 3 to 4. On a single level bill of materials, the quantity of multiple parts would need to be amended but it is not clear as to which parts or labour relate to the Wheel Housing to even make that change. Another advantage you can see when looking at the example is when we think about the level of knowledge or expertise required to manufacture an item. With a single level bill of materials, the person on the shop floor would have to have in depth knowledge of the quantity of material required for each element whereas with a multi-level bill of materials the need for such knowledge is negated by the more detailed breakdown of the manufacturing process.   ## The five advantages of a multi-level bill 1. Simplifies what can often be a complex production structure 2. Reduces the need for in-depth knowledge of a products manufacturing process 3. Makes it easier to visualise how components come together to form the overall product 4. Easier to manage engineering revisions 5. Ease of transition from engineering design to manufacturing process   In today's digital age, more manufacturing companies are moving their inventory and manufacturing process management onto business software to help improve efficiency and bridge the divide between the shop floor and the top floor. Here at Shorts we pride ourselves on our software projects team’s ability to analyse the requirements of companies of all sizes and provide a software solution to suit those needs. If your business could benefit from a solution to help manage your manufacturing processes, be it anything from managing multi-level bills of material to multi-site inventory management then [please contact us.](https://www.shorts.uk.com/contact-us/) ##  Other relevant articles  - [Everything you need to know about Exact](https://blog.shorts.uk.com/everything-you-need-to-know-about-exact)  - [Five advantages of serial and batch Tracing](https://blog.shorts.uk.com/five-advantages-of-serial-and-batch-tracing)  ![author](https://blog.shorts.uk.com/hubfs/Alicia%20williams-1.jpg) #### Alicia Williams I am Partner of the Genus team at Shorts, a chartered certified accountant and Xero specialist. I specialise in cloud-based accounting solutions, particularly Xero and add-on software, helping clients streamline processes and improve efficiency. As a Client FD, I work closely with businesses to give them a clear understanding of their current position and support their long-term planning and growth. [View my articles](https://blog.shorts.uk.com/author/alicia-williams) Tags: [GENUS Management Accounts](https://blog.shorts.uk.com/topic/genus-management-accounts), [Accountancy Services](https://blog.shorts.uk.com/topic/accountancy-services) Share this on - - - [Questions? Get in touch with us](https://www.shorts.uk.com/contact/) ###### Tax Saving Guide 2026-27 Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid. 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