Bill of Materials (BOMs) vs. Builds vs. KITS

What is the Bill of Materials?

A Bill of Materials (BOM) is a comprehensive list of all the components, parts, raw materials, and sub-assemblies required to manufacture or assemble a finished product.

Think of it as a recipe for manufacturing — it tells you what ingredients (materials) you need and in what quantities to build a product.

Key Elements of a BOM

1. Finished Product – The final item being produced
2. Components/Parts – Items that make up the finished product
3. Quantities – How many of each component are required?
4. Units of Measure – For example, “pcs”, “kg”, or “m”.
5. Part Numbers – Unique identifiers for each item.
6. Descriptions – Brief details about each part.

Types of BOM

• Engineering BOM (EBOM): Created by design/engineering teams, defines the product from a design standpoint.
• Manufacturing BOM (MBOM): Used in production; includes packaging materials, process items, and consumables.
• Sales BOM: Lists components sold together but assembled at delivery rather than in production.

Purpose

• Defines what to buy, make, or assemble.
• Ensures accurate costing and inventory control.
• Helps in production planning, procurement, and quality management.

Customer Use Case: 

A Bill of Materials (BOM's) is a foundational document for manufacturing, production, and inventory management. A BOM in Versa lists all components, materials, sub-assemblies, and quantities required to produce a finished product.

Enhances Production Planning

• A well-defined BOM ensures that production teams know exactly what materials and quantities are required before manufacturing begins.

Improves Inventory Management

• Enables real-time tracking of material usage and availability.

• Reduces overstocking (tying up cash) or stockouts (delaying orders).

Accurate Cost Estimation

• BOMs provide visibility into material, labor, and overhead costs.

• Helps business calculate true product cost and set profitable pricing.

• Useful for analyzing cost fluctuations when component prices change.

What is a Build?

In a manufacturing or ERP context, a Build refers to the process of converting raw materials or components (from the BOM) into a finished product.

You can think of it as the “assembly step” — where the system records that certain components were used to build one or more finished goods.

In simple terms:

A BOM defines what goes into a product.
A Build is the action of actually making that product in the system.

Example

Let’s say you have a product called “Gift Box”.
Its BOM includes:

• 1 Box
• 2 Candles
• 1 Ribbon

When you perform a Build, you’re telling the system:

“Use 1 box, 2 candles, and 1 ribbon to produce 1 finished Gift Box.”

After the build:

• Inventory for Box, Candles, and Ribbon decreases.
• Inventory for Gift Box increases.
• The cost of the Gift Box is calculated from the cost of its components.

Purpose of a Build

• Converts raw materials into finished goods.
• Updates inventory levels automatically.
• Calculates cost of goods manufactured (COGM).
• Helps track production history and component usage.

Customer User Case:

A Build — in the context of manufacturing — represents the process of assembling or producing a finished product using the components listed in a Bill of Materials (BOM). Essentially, it’s the execution phase that converts raw materials or subassemblies into the final product.

Improves Production Efficiency

• Keeps a record of the date, quantity, and cost of each build.

Provides Real-Time Visibility

• Tracks what’s being built, how much is completed, and what materials were consumed.

Optimizes Inventory Usage

• When a build is executed, it automatically deducts materials from inventory and adds finished goods to stock.

• Prevents manual errors and maintains accurate inventory levels.

  

  

What is the difference between a BOM, a Build, and a work order?

1. BOM (Bill of Materials)

What it is:
A blueprint or recipe that defines what materials and quantities are needed to make one finished product.

Think of it as:
“What you need.”

Example:
To make 1 Table, you need:

• 4 Legs
• 1 Tabletop
• 12 Screws

Purpose:

• Defines the components for production.
• Helps with costing and planning.

2. Build

What it is:
The action of actually assembling or manufacturing the product in the system, based on the BOM.

Think of it as:
“Doing the work.”

Example:
When you perform a Build for 10 Tables, the system:

• Reduces inventory of Legs, Tabletops, and Screws (the components).
• Increases inventory of the finished Tables.
• Calculates the production cost.

Purpose:

• Converts raw materials into finished goods.
• Updates stock and cost data.

3. Work Order

What it is:
A production instruction or authorization to build a specific quantity of a product.
It’s like a to-do list for production.

Think of it as:
“Permission or instruction to start building.”

Example:
A Work Order might say:

“Build 50 Tables using BOM TBL-001 by next Friday.”

Then the production team (or system) executes the Build(s) against that Work Order.

Purpose:

• Plans and tracks production tasks.
• Helps manage resources, timelines, and build progress.
• Can include labor, routing steps, or quality checks.

In Summary

In Versa Cloud ERP, the workflow is:
BOM → Work Order → Build → Finished Goods Ready for Sale

What is a KIT?

A KIT is a group of products that are sold together as one package, but not manufactured — it’s a sales bundle, not a production item.

In other words, a KIT just combines existing items for sale, while a BOM/Build actually creates a new finished product from components.

Example

Let’s say you sell a “Spa Gift Kit.”
The kit includes:

• 1 Candle
• 1 Soap Bar
• 1 Bath Salt

When you sell 1 Spa Gift Kit, the system will:

• Reduce stock of Candle, Soap Bar, and Bath Salt.
• Record the sale as 1 Spa Gift Kit on the invoice.
• But no Build or production happens — it’s just packaging/selling items together.

How a KIT Works in Versa Cloud ERP

In Versa, a KIT is a non-inventory product that’s linked to multiple components.

• You define the KIT under Products → Create Kit Product.
• Add the component items (and their quantities).
• When the KIT is sold:
  • Versa automatically deducts each component from inventory.
  • The system doesn’t perform a “Build.”
  • You can still track sales under the KIT name for reporting.

KIT vs BOM vs Build

Quick Analogy