What is BOM? Significance of ‘Bill of Material’ in Manufacturing Business

From purchasing raw material items for production to assembling and then supplying them to their final destination is a lot more challenging than what it sounds. Especially, when you don’t have a well managed system to organize the business processes or track the progress of the project, things become even more complex. 

Maintaining the spread sheets related to the entire list of raw materials, equipment and other things needed to finish a project is always an option, but, the unreliable manual data entries and human calculations and predictions related to stock situation, machine verification, etc. often land the users in unprecedented situations. 

To end this big time struggle of the manufacturers and distributors once and for all, there’s a need for a system at place enabled with the advanced Bill of Material feature to better manage the production and supplying processes. 

Before understanding the systems with in-built BOM, let’s first understand what is BOM

What is BOM and what is its Significance?

‘Bill of Materials’ or ‘BOM’ comprises the complete list of materials required for manufacturing defined batches of an item including raw materials, machine components, and other sub-assemblies with their detailed quantities. This detailed list addresses the users while stocking up the raw materials, preparing for the new production project or supplying the deliveries well in time. 

With this insightful data in hand, users are empowered to make smart decisions on purchasing and investing in the other capitals. 

Also, not just this, but Bill of Material features helps users track the movement of each and every item entering, proceeding to the next stage of production, and going out of the premises for the delivery. Thus, giving the leaders maximum transparency and visibility across the entire unit to stay updated with all the ongoing activities.

So, now that we know what value propositions are rendered by Bill of Materials, we should understand the system as well that offers the BOM capabilities to the maximum Efficiencies.

BOM enabled SAP Business One ERP System 

Though, there could be many ERP solutions available in the markets which offer BOM capabilities, but, we have brought to you the globally accepted ERP solution that has been dominating the market for many years now. SAP Business One ERP solutions comes with in-built BOM management to streamline production and distribution related concerns of the leaders. 

There are 4 types of BOM in SAP Business One ERP and depending on the client’s requirements, an appropriate BOM type is added to the software at the time of implementation. 

The BOM types are:

  1. Production Bill of Material: It is used where there are standard production orders as per Material Resource Planning, and the list of raw materials and components is prepared based on the standard production list only.
  2. Sales Bill of Material: Here the list included the items related to just the selling products and not the production related raw material list. 
  3. Assembly Bill of Material: Just like Sales BOM, here also the list of individual items appears along with their relevant price.
  4. Template Bill of Material: This is a flexible list including both the production and sales related component and can be customized as per the requirements.

The end note basically is that SAP Business One supports all types of BOM needs for production and distribution efficiently. So, if you belong to the same domain, and wish to streamline your inventory and sales related BOM, then SAP Business One is the one-stop solution for all your unique requirements.