What Is Bill of Materials and How It Is Different From Quote?

Max 4min read
Bill of Materials

What is a Bill of Materials (BOM)?

Definition of Bill of Materials

A bill of material is a detailed list of raw materials, elements, components, sub-assemblies, pieces, and anything else needed to make the finished product. The finished product or items could be the final product or a semi-finished product used to make a final or larger product.

A bill of materials contains the raw materials, components, and parts involved in producing a product. A BOM must also include the exact quantities of every item used.

A Bill of Materials helps a business estimate the cost of building a product and can give a rough idea about what its selling price should be. It also helps plan purchases and avoid wasting time and money on unnecessary items.

The finished goods bill of materials lists the components and the quantity of each element needed to make the finished product. 

You can have many BOMs for a single product if the final product includes variants in color, design, size, and so on. The examples in the upcoming sections will make this simple to comprehend.

Additionally, the production of completed goods might lead to the generation of by-products, co-products, or trash. The bill of materials can include this information as well.

Ideally, you should create a bill of materials at the beginning of a product life cycle to ensure development teams have everything they need without delays or backlogs

As a part of product management software, various BOM software solutions are accessible. This ensures that all production team members access the most recent product modifications.

Generally, companies also limit the number of people authorized to make changes in the Bill of Materials to avoid any internal disputes and confusion.

Bill of materials vs. Quote

A bill of materials (BOM) is simply a blueprint for producing a product. A bill of materials contains the ingredients, components, and steps to make the product.

The majority of BOMs follow a hierarchical structure. The finished product is at the top, followed by subassemblies and then the components that would manufacture a product. This comprises part names, numbers, descriptions, and quantity requirements.

A quote, also called a quotation, is a fixed-price proposition that you cannot modify once the consumer agrees. 

Although you complete more work than intended, stick to the quoted fee. It’s better to estimate if you believe something is likely to happen. You can also indicate what the quote covers.

What are the types of BOM (Bill of Materials)?

Engineering and manufacturing BOMs are the two most common types of BOMs.

An engineering bill of materials defines the structure of the finished product. All variant and replacement part numbers and pieces in the drawing notes are included. 

The product code, part name, part revision, specification, number, numerical value, size, length, and density. Including characteristics or features of the product are all listed on each line of the bill of materials (BOM).

A manufacturing bill of materials (BOM) breakdown all of the components and parts that go into making a final product that you can transport. It also includes the materials needed to transport the goods to the client in its packaging. 

It contains procedures that you must execute on the product before completing it. And all of the information necessary for the production process.

What are the bill of materials examples? 

To understand BOM meaning clearly, let us look at a few examples.

A bakery that aims to sell 1,000 cakes is an example of a Bill of Materials. This bakery’s bill of materials will comprise all ingredients for making a cake and baking pans, ovens, and wrapping. The list must also specify the quantity, total cost, and required time.

A corporation that needs to make 10,000 phones is yet another example of a Bill of Material. The Bill of Materials will list all essential requirements, including chips, quantity, pricing, and model. In addition, the BOM will comprise the time it takes to complete the finished version.

A pair of blue jeans is another good bill of materials example. Material kind, weave arrangement, cutting and sewing guidelines, and labeling specifications would all be included in the BOM. You can use these elements for small and large numbers of the same style of jeans.


What is a Bill of Materials in product management?

In product management, a Bill of materials is widely used to establish the resources. As in the resources required for the inclusion of any product or feature in the project

What does a BOM look like?

A BOM is a list of raw materials, components, and parts and their respective quantities required to develop a product.

How to calculate the bill of materials?

Bill of materials (BOM) calculations integrate data from various sources to determine a produced product’s typical costs. The sources are information regarding products, bill routing algorithms, indirect cost calculation formulae, and the costing version.

Crafting great product requires great tools. Try Chisel today, it's free forever.