We do parts manuals for several of our customers and every one is a little different.
If the product is something that we designed, then we have 3D models in Microstation and the iso line drawings are sort of automated. We have cells (mostly 2d) for several hundred different common hardware items like nuts, bolts, and so on. Doing the hardware and item bubbles typically takes longer than drawing the exploded view of the "important" parts.
The fastest way for us to do them is to just do the whole page in Microstation even though is is pretty crappy at text and importing bills of material from excel or databases. Fonts are always a bit of a problem, too.
We do some where we take the illustration done in Microstation and export it to Paperport, then export it as a .tiff file, then import that into Word or Publisher. This is a little cumbersome, obviously, but i've not found another way to get decent graphics into Word. Yes, you can just cut and past from Microstation but the resolution is very poor.
Sometimes we have customers that don't have any models (sometimes not even drawings) of anything. They just bring a piece of machinery by and leave it for us to create a manual. On this kind of deal we do a combination of rough modeling (without regard for exact dimensions) and sort-of freehand 2d drawing in an iso view. This is something that is pretty tough for some people and easy for others. It's very easy to get totally bogged down making the illustration much more exact and detailed than it needs to be. There is a huge difference in the time required for different people to do this kind of work. The ones that are best at it are the ones that have some artistic ability and "eye".
Overall, parts manuals are something that most people find very frustrating. Engineers typically are not good at creating them, Artists usually don't understand the technical stuff, writers/publishing types are clueless on CAD and illustration.
However you wind up doing them, one thing I would absolutely recommend is to "print" the final result as a .PDF file using Acrobat or PDFWRITER (from FinePrint). Everyone in the world can read them, not many can screw them up, and even the Mac-fixated printing folks can deal with it. It's probably the best software-related thing thing that has ever been done.
Just guessing from your handle that you are in the mobile equipment business--you have lots of other issues to deal with like deciding how deep to break down vendor-supplied components. I've never seen two companies do this the same way. Some just include, for instance, the Rexroth pump parts manual in the package.
Anyhow, a very complex issue--don't get to feeling bad when it seems to take way longer than it should. Just about everyone has the same problems, it seems.
Jess Davis
Davis Precision Design