In 2024, global spending on Internet of Things (IoT) hardware reached $262 billion, up 12% from the previous year. At the same time, over 70% of IoT project failures were tied to hardware and supply chain mismanagement. One critical, often overlooked element in successful IoT hardware development is the Bill of Materials (BOM).
A Bill of Materials (BOM) is the foundation for planning, sourcing, prototyping, manufacturing, and maintaining an IoT product. In IoT hardware development, the BOM does more than just list parts—it controls cost, affects timelines, and ensures compliance. In this article, we explore what a BOM is, how it’s used, and why it is crucial to IoT hardware projects.
What Is a BOM in IoT Hardware Development?
A BOM is a comprehensive list of materials, components, and subassemblies required to build a product. In the context of IoT hardware development, a BOM typically includes electronic components, sensors, connectors, PCBs, casings, and software-related firmware parts.
Types of BOMs in IoT Projects:
- Engineering BOM (EBOM): Designed by engineers during the development phase.
- Manufacturing BOM (MBOM): Used by manufacturing teams to assemble the final product.
- Service BOM: Lists components useful in repairs or replacements.
Each BOM serves a different purpose and audience but collectively contributes to the product lifecycle.
Why a BOM Is Essential in IoT Hardware Development
The BOM plays a critical role in multiple phases of IoT hardware development:
1. Cost Estimation
- BOM provides an exact breakdown of component costs.
- Helps avoid surprises during bulk procurement.
2. Supply Chain Planning
- Accurate BOM ensures timely sourcing of parts.
- Facilitates communication with suppliers and manufacturers.
3. Version Control
- BOM helps track design iterations and updates.
- Avoids errors during product revisions.
4. Regulatory Compliance
- Lists materials and origin, supporting RoHS and REACH requirements.
- Ensures product safety and market readiness.
5. Quality Control
- Enables traceability for faulty parts.
- Streamlines audits and certifications.
Key Components of a BOM
An effective BOM includes more than just part names. It must contain structured information that supports production.
| BOM Field | Description |
| Part Number | Unique ID for each component |
| Part Name | Descriptive name (e.g., Capacitor, Sensor) |
| Quantity | Number required per unit |
| Unit Cost | Cost per item, important for budgeting |
| Manufacturer | Original maker of the component |
| Supplier | Source or distributor name |
| Reference Designator | PCB mapping (e.g., R1, C3) |
| Description | Brief notes about specs or size |
| Lifecycle Status | Active, obsolete, or EOL (end of life) |
| RoHS/REACH | Environmental compliance certifications |
How BOM Supports Prototyping in IoT Projects
During prototyping, developers often make rapid design changes. A dynamic BOM helps track each version and its parts accurately. Here’s how BOM supports this phase:
- Facilitates vendor quotes and orders
- Helps identify lead time issues
- Aids in comparing component alternatives
- Provides traceability during testing
Example:
In a smart irrigation controller project, the BOM listed a soil moisture sensor that was later found inaccurate in testing. Because of the BOM, engineers easily swapped in a better sensor and updated the design.
Real-World Example: BOM in Industrial IoT Gateway
Let’s consider an industrial IoT gateway device designed for a smart factory setup.
Sample BOM (Partial):
| Part Number | Description | Quantity | Unit Cost (USD) | Manufacturer |
| STM32F746 | Microcontroller Unit | 1 | $5.60 | STMicroelectronics |
| W5500 | Ethernet Module | 1 | $2.30 | WIZnet |
| LM1117 | Voltage Regulator | 2 | $0.15 | Texas Instruments |
| DHT22 | Temperature Sensor | 1 | $3.50 | Aosong |
| PCB Layer | 4-Layer Custom Board | 1 | $8.00 | Local Manufacturer |
| ABS Casing | Enclosure (IP65 Rated) | 1 | $4.20 | Generic Supplier |
In this case, the BOM helped the company scale from prototype to batch production, reduce procurement time, and meet EMC testing requirements.
Best Practices for Managing BOMs in IoT Hardware Projects
Use Cloud-Based BOM Tools
- Platforms like Altium 365, Arena PLM, and Octopart provide live updates on component availability and pricing.
Maintain Revision History
- Every change must be version-controlled with date and reason for traceability.
Align with Supply Chain Early
- Involve suppliers early in BOM creation to check part availability and lead times.
Consider DFM (Design for Manufacturing)
- Include only components that can be sourced easily and assembled with available technologies.
Validate With Cross-Functional Teams
- Have engineers, sourcing, and compliance teams review the BOM before finalizing.
Common Challenges and How to Avoid Them
- Obsolete Parts
Use tools like SiliconExpert or Octopart to check lifecycle status before selection. - Incomplete Data
Make sure all fields (e.g., reference designators, specs, compliance info) are filled out. - Redundant Components
Run BOM audits to eliminate duplicates that bloat costs. - Vendor Lock-In
List at least two suppliers for critical components to reduce risk.
BOM Software Tools for IoT Projects
Here are some popular tools that support BOM management in IoT hardware development:
| Tool Name | Features | Ideal For |
| Altium 365 | Integrated with design tools | PCB Designers |
| Arena PLM | Lifecycle and quality management | Enterprises |
| Upverter | Collaboration and cloud BOM tools | Startups & Engineers |
| Octopart | Real-time inventory & pricing | Sourcing Teams |
| CADENCE OrCAD | BOM generation and schematic syncing | Large Scale Projects |
Future Trends in BOM Management for IoT
- AI-Powered BOMs: AI tools are being used to suggest component substitutions automatically.
- Blockchain for Traceability: Securing BOM data and verifying authenticity across the supply chain.
- Integration with IoT PLM: BOMs will be part of broader platforms for IoT product lifecycle management.
Conclusion
The Bill of Materials is not just a document—it’s the backbone of IoT hardware development. A well-structured BOM ensures accuracy, cost control, compliance, and quality. Whether building a prototype or scaling up to mass production, mastering BOM practices is essential for every IoT project.
As IoT hardware becomes more complex and supply chains evolve, investing in robust BOM management tools and practices will separate successful projects from costly failures.
Frequently Asked Questions (FAQs)
- What is a BOM in IoT hardware development?
A BOM (Bill of Materials) is a detailed list of all parts, components, and materials required to build an IoT hardware product. It includes part numbers, quantities, manufacturers, and other relevant details. - Why is a BOM important in IoT product development?
The BOM helps control costs, manage inventory, track design changes, ensure compliance, and streamline manufacturing. Without it, sourcing and production processes become error-prone and inefficient. - What tools can I use to manage my BOM for IoT devices?
Popular tools include Altium 365, Octopart, Arena PLM, Upverter, and OrCAD. These platforms help with version control, pricing updates, sourcing, and part availability checks. - What’s the difference between EBOM and MBOM?
- EBOM (Engineering BOM): Created by design engineers; focused on design components.
- MBOM (Manufacturing BOM): Used by production teams; includes packaging, labels, and assembly instructions.
- How often should I update the BOM in an IoT project?
Update your BOM whenever there’s a design change, part substitution, cost change, or supplier update. Regular version control ensures accuracy across teams and stages of development.
