4 Bills of Material Types in SAP Business One

From purchasing, manufacturing, assembling, and selling products, keeping track of the entire production process can be challenging. Many small and medium-sized businesses (SMBs) 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 usually begins with raw materials and the creation of a production order containing the materials and steps to produce goods within a predetermined time frame. The material can be found in the BOM generated by SAP Business One. A BOM contains a hierarchical arrangement of components that lists raw materials and sub-items—aka “child” items—for the finished product.

Without an integrated ERP solution, generating BOMs and production processes becomes complex and error-prone due to challenges such as manual processes and internal legacy systems.

Challenges include:

• Manage inventory across multiple warehouses
• Track and record inventory movements
• Ensure sufficient raw materials and spare parts are made and ordered during production
• Calculate shortage or excess inventory
• Access to real time information
• There are four types of BOM in SAP Business One
  

Production BOM

A production BOM is required for all running materials requirements planning (MRP) and standard production orders. The production BOM lists the parent item (i.e., the finished product) and child items (i.e., components that complete the parent item). During the production process, you can turn components into finished products.

BOM Sales

Sales BOMs are used for sales documents where the master item is listed as a sales item, not an inventory item. When a parent is selected in a sales document, all children appear as sub-items. You can update the quantity of a parent or child item, but you cannot delete a child or add a new child to a package in a sales document.

BOM Assembly

An assembly BOM is similar to a sales BOM, as it represents a collection of individual items in a set at a specific price. Like a sales BOM, you manage the final product as a sales item, not an inventory item. In contrast to a sales BOM, only the finished product appears on the sales document; The component does not appear as a sub-item on the sales order but it does appear on the pick list for the order.

BOM Templates

Template BOMs have no real limitations—parents and children can be any item. This BOM can be used in production and sales documents, with the master item displayed first and the components listed below it. Components can be replaced with other components or removed from BOMs and sales documents, and quantities can be updated.

By leveraging advanced business management solutions that facilitate BOM sharing with engineers or other businesses across the supply chain, manufacturers can operate with greater efficiency.

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