Learn about the four types of bills of material (BOMs) in SAP Business One and watch the video to learn everything related to BOMs and how to streamline the process.
From purchasing, manufacturing, assembling, and selling products, tracking the entire production process can be challenging. Many small to midsized enterprises (SMEs) that use enterprise resource planning (ERP) solutions like SAP Business One have found that bills of materials (BOMs) make production more efficient, accurate, and timely.
The production process typically starts with raw materials and the creation of a production order that contains the materials and steps to produce an item in a predefined time frame. The materials can be found in the BOM generated by SAP Business One. The BOM contains a hierarchical arrangement of components that lists the raw materials and sub-items— aka “child” items or “children”—for the finished product.
Without an integrated ERP solution, generating BOMs and the production process are complex and error-prone due to challenges like manual processes and in-house legacy systems.
- Managing inventory across multiple warehouses
- Tracking and recording inventory movements
- Ensuring enough raw materials and parts are created and ordered at the time of production
- Calculating shortages or surplus inventory
- Access to real-time information
There are four types of BOMs in SAP Business One.
A production BOM is required for all materials requirements planning (MRP) runs and standard production orders. The production BOM lists parent items (i.e., finished products) and child items (i.e., components that complement the parent items). During the production process, you can turn components into finished products.
A sales BOM is used for sales documents where the parent item is listed as a sales item, not an inventory item. When the parent is selected in the sales document, all the children appear as sub-items. You can update parent or child item quantities, but you can’t delete children or add new children to the package in the sales document.
An assembly BOM is similar to a sales BOM, as it represents a collection of individual items in a set with a specific price. Like the sales BOM, you manage the final product as a sales item, not an inventory item. Unlike the sales BOM, only the finished product appears in the sales document; the components do not appear as sub-items on the sales order but the components do appear on the pick list for the order.
A template BOM has no real restrictions—the parent and child can be any item. This BOM is usable in both production and sales documents, with the parent item displaying first and components listed below it. The components can be replaced with other components or deleted from the BOM and sales document, and quantities can be updated.
By leveraging sophisticated business management solutions that facilitate sharing BOMs with engineers or other businesses throughout the supply chain, manufacturers can operate with greater efficiency.
Watch our on-demand webinar, Practical Tips for Managing Your Bill of Materials, to learn everything related to BOMs and how to streamline the process. You’ll understand how a well-managed, accurate BOM process increases revenue, lowers costs, and improves your bottom line.