Bill of Materials

Bill of materials is a comprehensive list of raw materials, parts and components along with their respective quantities that are required for the production of a product. In other words, it is a complete list of all those items that are needed for manufacturing a specific product. It is also known as product structure and serves as the core component of any manufacturing process as it lays down all the requisite raw materials and producer goods needed hence facilitating the efficiency of the process.

For example, a car manufacturer intends to manufacture 100 cars in the first quarter of the new financial year. A bill of materials for a car will include all material and parts that make up the car such as frames, seats, brakes, wheels, steering and tires including the quantities of each part/ component along with their cost.