A product breakdown structure (PBS) is an element of project management that breaks down all the components used in a product. This exhaustive diagram takes the main units of a product and details all the parts within that unit. The product breakdown structure is used for many project management tasks, such as figuring out costs or finding a way to change part of the product rather than the whole thing. While used mostly for components, the product breakdown structure can also be used to measure the functional and conceptual portions of the product.
A product breakdown structure creates a hierarchical graph of all the parts of a product. For example, a breakdown of a car would have a row of the main units, such as the door, motor and transmission. Under the door heading would be parts used in the door, such as the locking mechanism, window controls and the handle. If one of these parts has several parts contained within it, such as the electrical components of the window controls, another subcolumn of parts are added under that part's heading.
While the product breakdown structure is primarily used to highlight the components of a product, it also highlights other portions of the product. Especially with new products, the functional or conceptual components will be highlighted if they will not be inherently understood without the note. This is used mostly for reporting to managers or other people who are not involved in creating the product, so they understand everything about the product.
The product breakdown structure is made, in part, to figure out the cost of the product. Each item is prioritized and the cost is figured out so project managers know how much money must be used to fund the project. This also tells suppliers and ordering managers what components are needed for the project to be completed.
Another reason for this structure is to make changes to the product without having to change the entirety. This is used either for cost-effectiveness or to improve portions of the product. For example, if a piece of the product is made of an inferior material, the project manager can change that part of the product breakdown structure to include a superior material for better performance.
A work breakdown structure (WBS) is similar in structure to the product breakdown structure and includes all components in the product. A WBS, though, is more exhaustive. The WBS will include training, data, services and everything else needed for the product to work.