Bone Marrow and Blood Formation. Bone marrow is the spongy tissue that fills the cavities inside your bones. Most of your blood cells are made in your bone marrow. The process by which blood cells are made is called haemopoiesis.As an infant, haemopoiesis takes place at the centre of all bones. In later life, it is limited to the hips, ribs and breastbone (sternum).he process by which blood cells are made is called haemopoiesis. As an infant, haemopoiesis takes place at the centre of all bones. In later life, it is limited to the hips, ribs and breastbone (sternum).