In Construction type field, Material Master will be assigned to Equipment. It will help you to reduce the BoM Master data creation.
For example, you have identical motors of 50 Numbers in your plant. All motors spares are mostly unique.
If you want to create BoM for equipments, then you have to create 50 BoM in IB01. Instead, you can create one Material as Motor (Assembly) & create Material BoM in CS01. Assign that Motor Material to all Motor Equipment.
By this, you can control the creation of BoM from 50 numbers to one number. All 50 equipments (Motor) will refer that Material BoM which you created for Material (Motor).