Bill of Materials (BoM) in SAP B1

The Bill of Materials (BoM) is an effective way for manufacturers to organize important information that underlies the production process.

What exactly is a Bill of Materials (BoM)? A Bill of Materials (BoM) is basically a list of raw materials or components, quantities, times, and steps required to manage the production or assembly of finished goods.

BoM supports better planning, inventory management, costing and production efficiency—especially when built into a comprehensive Enterprise Resource Planning (ERP) solution.

SAP Business One is the leading ERP for small, medium to large manufacturers (manufacturing companies), with strong capabilities in terms of ongoing production planning, including BoMS management.

What types of Bill of Materials are available in SAP Business One?

SAP Business One allows you to create three types of BoM:

Production BoM: helps you process standard production orders by converting various raw materials into finished products by utilizing machines and labor.

Sales and Assembly BoM : allows you to group individual sales items in stock to sell a 'master' product consisting of several components that are then removed from inventory once the order is shipped. The two BoMs function as a fixed item combination, but if you use Sales BoM then the customer requires confirmation of each component or if the customer wants to change the quantity.

BoM Template: Lists items for sale at the same time and gives you the flexibility to change quantities, exchange, and delete items to customize sales orders.

SAP gives you greater control over production with multi-level BoM

You can configure BoMs to suit your production processes using SAP Business One, including creating a single BoM with multiple stages and complex routing and instructions.

Managing production BoMs in SAP Business One also includes the ability to:

     ·        Add text as line items so you can provide detailed instructions on techniques and methods.

     ·        Group line items based on your process flow so you can break down the BoM by stage.

     ·        Apply bulk updates to the BoM and add or remove paths for easier maintenance.

SAP's best BoM helps you understand and improve profitability

SAP is able to provide an overview of how many products are made and how much it costs.

You can allocate static costs for set-up machine setup time and standard costs per minute/hour for processing time. Then you can spread those costs across multiple GL accounts.

With SAP Business One Each component item has a price, which is often based on its cost price. The system can track the last cost price and average cost for items.

Because BoMs in SAP Business One allow for precise costing, when you review operations, you may decide production margins for some products are too low. It's easy to apply a price increase (for example, a 10% increase) based on the criteria you enter and apply this to all relevant BoMs. Find the convenience of other management systems on SAP Business One in the following article: Financial Reports that Companies Must Have

BoM plans inventory management and purchasing with complete visibility

The production BoM is useful as a 'shopping list' to guide manufacturing processes. BoM is also useful in terms of understanding demand, lead times and stock availability.

When you select a production BoM in SAP Business One, you can include products in a Materials Requirement Planning (MRP) run, to gain high-level visibility of supply and demand, materials, and capacity constraints.

SAP Business One MRP gives you very useful recommendations about initiating production orders and generating purchase orders to meet future demand.

Your company certainly needs an ERP solution that handles the Bill of Materials and contributes to better planning, right? SAP Business One makes it easy to manage materials, processes and overall profitability.