A modular bill of materials (modular BOM) is type of bill of materials (BOM) and a critical element in defining the product structure of an end-item.
Modular BOMs define the component materials, documents, parts and engineering drawings needed to complete a sub-assembly. While the terms BOM and modular BOM are most commonly used in association with physical products, the concept can be used in a variety of industries (e.g. software, medical records). Modular BOMs are used by modern information systems to serve a variety of purposes, such as defining the components needed to produce a sub-assembly, and providing cost information for each component and "rolled-up" cost information for the overall sub-assembly.
For option-based, configurable products (e.g. automobiles, PCs) companies needed to plan every combination and permutation of options to ensure they could fulfill customer demands. With a modular BOM structure, companies can plan the demand for each module independent of the end-item demand by estimating the popularity of the module sub-assembly.