BOM and KIT – Understanding the Basic Difference

By | February 28, 2014

BOM (Bill of Material) and KIT concepts are widely used in manufacturing and trading domains and hence are offered by all major ERP systems. The concept of BOM and KIT are widespread in various verticals and has a process involved for having them defined in the system.

In this Blog, both BOM and KIT are differentiated with simple examples to understand their basics. It is often considered and it seems obvious to consider BOM and KIT to be manufacturing process, though they are not.

Both BOM and KIT fall into a different process altogether. In simple words, Bill of material is an Inventory concept whereas KIT is a concept which comes in a sales process.

It is also important to understand that BOM Constitutes to become a Finished Good and is a Stocking Item, Pricing is done on Finished Good whereas KIT is an assembled bunch of Finished Goods where KIT is never considered to be Stock Item and pricing is done on each Finish Good and grouped together.

To further simplify KIT we take an example. In this example, an ABC Corporation is a manufacturer of Shaving Gel, Shaving Razor, and Razor Blades. When a company sells its products; it sells Shaving Gel, Razor, and Razor blades as a KIT1 and sometimes it sells without Shaving Gel as KIT2. So Rather than selling items separately, it is sold in a Bunch.

From the above example, we understand that KIT is, multiple items grouped together at the time of Sales.

Taking forward the same example we can simplify the concept of BOM. When ABC Corporation has to manufacture a Shaving Razor it needs following components, 5 Nos. of Blade, 1 Nos. of a Plastic handle and 2 Nos. Rubber Grip. These components are assembled together and then sent for Production. The Shaving Razor is manufactured and sold as an Item. Here we understand BOM is a detailed list of components which are assembled to produce a single unit of Finished Good.

Now that we understand the basic difference between BOM and KIT, we can understand their significance and role in the system with few points amongst a vast list of pros and cons.


As we understand from the above example BOM is a presales process and an inventory concept. It helps us have a control over the items that are involved in the production without affecting their pricing, currency. We can also track inventory lot wise and also link the serial numbers back.

Where production is done in phases and item is assembled in stages to complete a production, a multi-level BOM can be defined; Where Routing can also be defined for a BOM.

There is no control on manipulating item configuration, like changing their quantity or components during sales. The master/BOM has to be predefined which helps in defining a firm process.

Components used to manufacture the Finished Good are not visible with their Serial/Lot number on any documents as in Packing Slips, Delivery Slips or Sales Invoice which is printed however details can be fetched on demand.


Everything can be tracked at component level with their Serial Number/Lot Tracking number. This information can also be printed on documents. Being a concept during the sales process manipulation of quantities and configuration can be made.

As the items are sold in a bunch as a single item there is no need to insert multiple line items. A single line item entry is made. The items cannot be assembled on a multi-level basis and prior to sales.

An internationally acclaimed ERP system like Sage 300 ERP incorporates these and many more features of Kitting and BOM with similar requirements for business processes over the globe. These features are designed to cater various industry-based requirements to reduce manual intervention and redundant data entry. The automation also helps in better production planning and helps maintain optimum inventory reorder levels to implement practices like JIT among others.

We must understand that BOM and KIT have their individual significance, and one has to identify which suits best to the business process before implementing any one of them.

About Us
Greytrix a globally recognized Premier Sage Gold Development Partner is a one stop solution provider for Sage ERP and Sage CRM needs. Being recognized and rewarded for multi-man years of experience, we bring complete end-to-end assistance for your technical consultations, product customizations, data migration, system integrations, third party add-on development and implementation expertise.

Greytrix offers unique GUMU™ integrated solutions of Sage 300 with Sage CRM, and Magento eCommerce along with Sage 300 Migration from Sage 50 US, Sage 50 CA, Sage PRO, QuickBooks, Sage Business Vision and Sage Business Works. We also offer best-in-class Sage 300 customization and development services and integration service for applications such as POS | WMS | Payroll | Shipping System | Business Intelligence | eCommerce for Sage 300 ERP and in Sage 300c development services we offer services such as upgrades of older codes and screens to new web screens, newer integrations using sdata and web services  to Sage business partners, end users and Sage PSG worldwide. Greytrix offers over 20+ Sage 300 productivity enhancing utilities that we can help you with such as GreyMatrixDocument AttachmentDocument NumberingAuto-Bank ReconciliationPurchase Approval SystemThree way PO matchingBill of Lading and VAT for Middle East.

For more details on Sage 300 and 300c Services, please contact us at We will be glad to assist you.