Right from the procurement of raw materials to selling the finished product, manufacturing operations go through a series of business processes. Manufacturers, particularly SMEs, find it challenging to maintain the records across all production stages.
To streamline the entire production process, manufacturers can leverage the capabilities of the Bill of Materials in SAP Business One or SAP B1. For example, let’s say a product manufacturer needs to procure the raw materials to begin their production process. The Production Order is generated, which contains the list of raw materials, their details, and the timeframe needed to make the final product. This production order can now be automatically generated using Bill of Materials or BoM in SAP Business One.
What is a Bill of Materials (BoM)? Let’s first understand this concept.
What is BoM in SAP B1?
In SAP Business One, the Bill of Materials (BoM) refers to the list of materials or product components needed to build the final product. BoM in SAP B1 is automatically generated against the inventory of items including the costs needed to produce the final product.
The list of BoM items is arranged in a hierarchical order of parent and child items, where the parent item refers to an assembled product, and the child item is one of the components or parts used to assemble the parent item.
Typically, a BoM is made of the following components:
- BoM hierarchy level
- Part name and number
- Manufacturer’s name
- Part phase (in the product lifecycle)
- Part description and quantity
How many types of BoM are there in SAP B1?
Depending on your product requirements, you can essentially use four types of BoM in SAP Business One. Let us look at each of these four types:
1. Production BoM
The Production BoM in SAP Business One is generated for any standard production order. This Production BoM automatically generates a list of parent and child inventory items or components required to complete producing a finished product. Individual components can also be turned into finished products during the production phase.
The Production BoM can also be used in ERP and materials requirements planning or MRP.
2. Sales BoM
The Sales BoM in SAP Business One is generated when the parent item is listed for sales and not for inventory purposes. The Sales BoM defines the product details before its final assembly in the sales stage. In this case, all child items become sub-items to the parent item in the sales document.
Also Read: SAP Business One Helps In Implementing Best Practices Of Inventory Management
In a Sales BoM, you can change the quantities of child items but cannot add or remove a new child item to the existing sales document. For example, a laptop computer can be the parent item, while other components like hard disk and display will be child items.
3. Assembly BoM
The Assembly BoM in SAP Business One is a collection of individual items in the assembled set with their price. This BoM is similar to the Sales BoM with only one difference. In this BoM, the finished product is listed as the sales item and not an inventory item. The product components do not appear as child items or sub-items in the Assembly BoM. However, components appear on the order pick list.
Also Read: SAP Business One–Price List feature
4. Template BoM
The Template BoM in SAP Business One is the most flexible type of BoM, where any item can be designated as either parent or child item. This BoM can be used for both production and sales documents. Typically, it shows the parent item on the top and the child items under the parent item. The Template BoM allows you to add, update, replace, or remove any item to modify the production and sales documents.
Besides these four Bill of Material types in SAP Business One, another type is the Engineering BoM which defines the list of assemblies and assembly parts used in engineering. The Engineering BoM displays the entire structure from a functional standpoint and is represented in the form of a mechanical drawing of the engineering product. To create engineering BoMs, engineers use CAD software tools to create the product design.
Conclusion
In summary, manufacturers can improve their production efficiency and productivity by using the Bill of Materials functionality in SAP Business One. With manual BoM processes, the production phase can be vulnerable to human errors. An integrated ERP tool such as SAP B1 can improve the accuracy and timeliness of BoMs.
As an award-winning SAP partner, Praxis Info solutions has enabled manufacturing companies to leverage the various capabilities of SAP Business One to grow their business. Our SAP solutions have enabled business enterprises to turn into intelligent enterprises. Here is a blog about how companies can boost their productivity by integrating SAP B1 with other applications.
We can answer any queries you may have about the Bill of Materials. Contact us today.