In a business venture, maintaining all the critical business processes in one place and keeping a track of it can be a tedious task. From procuring the raw materials to actually selling the finished product, there comes in a number of records detailing all the stages. In ERP solutions like SAP Business One, there is, however, something that reduces all the pains of production and overcomes the challenges. This feature makes the overall production process more efficient and accurate. This is the SAP Business One Bill of Materials (BoM).
In general, when a company starts off with producing a particular product, they procure the raw materials to begin the process. A document containing all the details of the materials and the steps, along with the timeframe it needs to finished is created which is called a Production Order. Now, SAP Business One itself generates a Bill of Materials against the materials required for production; the user can find the BoM in SAP. The Bill of Materials is constructed in a stratified arrangement that lists all the raw materials required and all the other components needed to assemble and finish the product.
The generation of Bill of Materials can be, however, a complex task if the solution is not an integrated ERP system. The challenges associated with manual data entry and legacy systems make the entire production flow more error prone.
4 Types of Bill of Materials in SAP Business One:
1. Production Bill of Materials –
For any standard production order, a Production Bill of Materials is required which is generated in SAP. The Production Bill of Material lists down all the finished parent items and the child item components that are required to finish the product (complementary items with the main product). Also, the states of components can be turned into finished products.
2. Sales Bill of Materials –
In case of a situation where the parent item is listed only as a sales item and not inventory item, a Sales Bill of Material is generated. This means that when the parent is selected in the sales document, all the child items become sub-items. In a Sales BoM, a user can edit the quantities of existing child items; but a user will not be able to delete or add new child or sub-items to the existing package in the sales document. A perfect example would be a printer where the parent item is the printer whereas all the necessary components within the printer fall under the child item category.
3. Assembly Bill of Materials –
In Assembly BoM, we can see a collection of individual items in a set with a particular price. Assembly Bill of Materials is just like Sales BoM; there is however a little difference – the final product is not managed as an inventory item, it is managed as a sales item. Also, when the final product appears in Assembly BoM, only the finished parent product is shown, unlike the case in Sales BoM, where the child components appear as sub-items.
4. Template Bill of Materials –
There are no restrictions in Template BoM – it is flexible. The parent item and the child item can be of any type. This type of Bill of Material can be used for both purchases as well as sales document with the parent item listed on top and then the child items. These items can be easily replaced, updated or omitted with/without other components.
By employing best-of-the-breed solutions that support the sharing of BoMs, manufacturers can now operate with greater efficiency and gain higher productivity. The sharing of the bills of materials within the organization, especially the engineers and the supply chain management, facilitates the free flow of business information and brings out a prospect for the manufacturers to gain a competitive edge in the market.