4 Bills of Material Types in SAP Business One
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.
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.
Challenges include:
· 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.
Production BOM
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.
Sales BOM
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.
Assembly BOM
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.
Template BOM
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.
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