Product Breakdown Structure

A product breakdown structure (PBS) is a hierarchical visual representation of project outcomes or deliverables.

ConceptA Product Breakdown Structure (PBS) is a hierarchical and systematic decomposition of a complex product or project into its constituent parts or deliverables. It is a visual representation that breaks down the entire product into smaller, manageable components, making it easier to plan, manage, and execute projects effectively. Each level of the PBS represents a finer level of detail, allowing for a clear understanding of the product’s structure and facilitating project management, cost estimation, and resource allocation. PBS is a valuable tool in project management methodologies like the Work Breakdown Structure (WBS) and Prince2.
Key ComponentsThe PBS consists of the following key components:
Main Product: This is the highest level of the PBS and represents the entire product or project.
Subsystems: The main product is divided into major subsystems, each responsible for a significant part of the project.
Components: Subsystems are further divided into individual components, which may be physical parts, software modules, or specific deliverables.
Further Decomposition: The process continues until the smallest, manageable work packages or elements are reached.
ApplicationThe PBS is commonly used in project management, engineering, construction, and product development. It is particularly useful when dealing with complex projects or products, as it helps in defining project scope, work packages, and responsibilities. PBS aids in estimating costs, allocating resources, and ensuring that all project components are accounted for during planning and execution. Additionally, it provides a basis for tracking progress and managing changes.
BenefitsThe PBS offers several benefits:
Clarity: It provides a clear and visual representation of the project’s structure, enhancing understanding among team members and stakeholders.
Scope Definition: It helps in defining the project scope by breaking it down into manageable components.
Resource Allocation: PBS facilitates resource allocation and cost estimation at various levels of the hierarchy.
Project Control: It serves as a reference point for tracking project progress and managing changes.
ChallengesChallenges associated with PBS include:
Initial Effort: Creating a detailed PBS requires time and effort, especially for large and complex projects.
Maintenance: The structure should be kept up-to-date as the project progresses and changes occur.
Complexity: For extremely complex projects, the PBS itself can become intricate, making it challenging to manage.
Real-World ApplicationPBS is widely used in industries such as construction, aerospace, software development, and manufacturing to plan and execute projects. For example, in construction, it breaks down a building project into floors, rooms, walls, and components. In software development, it represents modules, functions, and features.

Understanding the product breakdown structure

A product breakdown structure is a diagrammatic hierarchical representation of project outcomes and provides a clear and concise illustration of what the project must deliver.

The PBS is also beneficial for teams since it reduces a complex project or product into more manageable components.

At the top of the product breakdown structure is the final product, with elements of the product represented in various subcategories below.

The PBS is similar to another project management tool called the work breakdown structure (WBS), which organizes project work into smaller sections and deliverables.

In the context of project management, the PBS precedes the WBS with a focus on determining the desired outputs required to achieve project goals. The WBS is then crafted to identify the activities and tasks that will support those outputs. 

Many favor this approach to project management because it removes ambiguity and avoids assumptions that can result in inefficiencies.

The common mantra is that the “PBS defines where you want to go while the WBS tells you how to get there.”

Example of a product breakdown structure

Here is a brief look at a product breakdown structure for a third-party software installation. Under this product are the following categories and subcategories:

  • Project initiation document.
  • Software installed – third-party software, servers, database software.
  • Software tested – test plans, test scripts, test system.
  • Training delivered – training plan, training venue, training material.
  • Software delivery to users – software download, post-install test script.

Notice in the above that products may be described as nouns or as outcomes in the past tense. Most product breakdown structures will also be annotated with a list of products and associated product descriptions.

These set the standards for product quality and responsibility early on in the project life cycle.

Once the PBS has been completed, decision-makers can create a product flow diagram to define the delivery plan logic.

How to create a product breakdown structure

Creating a product breakdown structure involves a team of individuals sharing their unique perspectives on a particular project. 

Many businesses choose to conduct brainstorming sessions between departments where employees can collaborate to define the various categories and sub-categories.

This can be done on a whiteboard or with notecards and post-it notes.

Whatever method is chosen, the teams must discuss each project and reorganize the components where necessary. For complex projects, it may be worthwhile to use mind mapping and project management software such as MindView.

Key takeaways:

  • A product breakdown structure (PBS) is a hierarchical visual representation of project outcomes or deliverables. It provides a clear and concise illustration of project deliverables while also reducing complexity.
  • In a PBS, products are described as either nouns or outcomes in the past tense. Once the illustration has been completed, decision-makers can create a product flow diagram to define the delivery plan logic.
  • To create a product breakdown structure, teams from multiple departments must collaborate and share their unique perspectives. The PBS itself be completed on a whiteboard or with note cards, but more complex projects may require dedicated project management software.

Key Highlights

  • Visual Hierarchy: A PBS is a hierarchical diagram that represents project outcomes. It offers a structured view of what the project aims to deliver, with the final product at the top and subcategories below.
  • Simplifying Complexity: It helps teams break down a complex project into manageable components, making it easier to understand the project’s structure and objectives.
  • Relation to WBS: While similar to the Work Breakdown Structure (WBS), the PBS focuses on defining desired project outputs. It precedes the WBS, which identifies activities and tasks to achieve those outputs. The PBS sets the destination, while the WBS outlines the journey.
  • Clarity and Efficiency: The PBS reduces ambiguity and prevents assumptions that can lead to inefficiencies. The saying goes, “The PBS defines where you want to go, while the WBS tells you how to get there.”
  • Example: For a third-party software installation project, the PBS may include categories like Project Initiation Document, Software Installed (third-party software, servers, database software), Software Tested (test plans, test scripts, test system), Training Delivered (training plan, venue, material), and Software Delivery to Users (software download, post-install test script).
  • Annotations: A PBS often includes a list of products and associated descriptions, setting quality standards and responsibility early in the project’s lifecycle.
  • Creation Process: Teams collaborate to create a PBS, typically through brainstorming sessions between departments. Visual aids like whiteboards, notecards, and post-it notes can be used. For complex projects, project management software and mind mapping tools can be valuable.
  • Product Flow Diagram: Once the PBS is complete, it can be used to create a product flow diagram, defining the logic for product delivery.


Level 1This is the highest level of the PBS, representing the main product or project.– Provides an overall view of the project or product. – Helps stakeholders understand the project’s scope. – Sets the context for lower-level breakdowns.Example: For a construction project, Level 1 might represent the “Office Building” that is the main focus of the project.
Level 2Subdivides Level 1 into major components or deliverables.– Breaks down the project into manageable segments. – Assigns responsibility for each major component. – Helps in project planning and resource allocation.Example: Level 2 of the “Office Building” project might include components like “Foundation,” “Structural Frame,” “Interior Finishes,” and “Exterior Cladding.”
Level 3Further decomposes Level 2 components into smaller, more specific elements or tasks.– Provides a detailed view of the work required for each component. – Facilitates task assignments and scheduling. – Guides project monitoring and progress tracking.Example: Under the “Foundation” component, Level 3 might include elements such as “Excavation,” “Footings,” “Concrete Pour,” and “Curing.”
Level 4Continues the decomposition process into even smaller elements, making it suitable for task management.– Enables precise task definition and assignment. – Supports detailed scheduling and resource allocation. – Helps identify dependencies and critical path items.Example: Within the “Concrete Pour” element, Level 4 could include tasks like “Formwork Preparation,” “Rebar Installation,” “Concrete Mixing,” and “Pouring and Leveling.”

Connected Product Development Frameworks

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BCG Matrix

In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Ansoff Matrix

You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

User Experience Design

The term “user experience” was coined by researcher Dr. Donald Norman who said that “no product is an island. A product is more than the product. It is a cohesive, integrated set of experiences. Think through all of the stages of a product or service – from initial intentions through final reflections, from first usage to help, service, and maintenance. Make them all work together seamlessly.” User experience design is a process that design teams use to create products that are useful and relevant to consumers.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

Empathy Mapping

Empathy mapping is a visual representation of knowledge regarding user behavior and attitudes. An empathy map can be built by defining the scope, purpose to gain user insights, and for each action, add a sticky note, summarize the findings. Expand the plan and revise.

Perceptual Mapping

Perceptual mapping is the visual representation of consumer perceptions of brands, products, services, and organizations as a whole. Indeed, perceptual mapping asks consumers to place competing products relative to one another on a graph to assess how they perform with respect to each other in terms of perception.

Value Stream Mapping

Value stream mapping uses flowcharts to analyze and then improve on the delivery of products and services. Value stream mapping (VSM) is based on the concept of value streams – which are a series of sequential steps that explain how a product or service is delivered to consumers.

8 Dimensions of Quality

The 8 dimensions of quality are used at a strategic level to analyze the product or service quality characteristics. They were first described by Harvard Business School Professor David A. Garvin in 1987. Instead of defensive measures to pre-empt quality control, Garvin proposed that American companies take a more aggressive stance where quality itself would be the basis of product differentiation and a competitive strategy to secure market share.

Product-Process Matrix

The product-process matrix was introduced in two articles published in the Harvard Business Review in 1979. Developed by Robert H. Hayes and Steven C. Wheelwright, the matrix assesses the relationship between: The stages of the product life cycle (from ideation to growth or decline), and The stages of the process (technological) life cycle.

Premium Pricing Strategy

The premium pricing strategy involves a company setting a price for its products that exceeds similar products offered by competitors.

Fast Follower Strategy

A fast follower is an organization that waits for a competitor to successfully innovate before imitating it with a similar product.

Brand Marketing

Brand marketing describes the process of an organization building a relationship between its brand and customers from the target audience. Instead of marketing the features of a particular product or service, brand marketing promotes the whole brand by mentioning how those products and services support the brand’s promise.

Promotional Channels

Promotional channels, sometimes referred to as marketing channels, are used by an organization to advertise its products and services and communicate with the target audience. News coverage is one of the most difficult promotional channels to secure, but it is also one of the most valuable. Editors are bombarded with pitches daily, so the brand needs a compelling and ideally topical story to tell. Other promotional channels include guest posting, influencer outreach, advertorial, and native LinkedIn feed advertising.

Read the remaining product development frameworks here.

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