A Bill of Materials (BOM) outlines the components and quantities needed to manufacture an item, including any necessary sub-assemblies. It can also include the manufacturing operations required for production.

The BOM serves as a central document in the Manufacturing system and is pivotal for creating other documents like Work Orders and Job Cards. BizCentric supports multi-level BOMs.

It comprehensively lists all materials, whether purchased or produced in-house, and the operations involved in creating a finished product or sub-assembly. In BizCentric, each item, or sub-assembly, can have its own BOM, thus forming a hierarchical structure of items with multiple levels.

To make accurate Purchase Requests, you must always maintain correct BOMs.

To access the BOM list, go to: > Home > Manufacturing > Bill of Materials > Bill of Materials

Note that once a BOM is submitted, it cannot be edited. You can only cancel the existing, duplicate it and submit another one. A BOM is also linked to multiple places in the Manufacturing module, so making changes to it can be time-consuming and tedious. Hence it is a good practice to carefully think and fill out the BOMs before submitting.

1. Prerequisites

Before creating and using a BOM, it is advised that you create the following first:

• Item
• Operation
• Workstation
• Routing

2. How to create a Bill of Materials

1. Access the Bill of Materials list and initiate a new entry.
2. Specify the item intended for production, where details like item name, unit of measure (UoM), company, and currency are automatically populated.
3. Input the quantity of the item to be manufactured according to this Bill of Materials.
4. Within the Items table, designate the necessary raw materials (items) required for manufacturing the item. Then proceed to:
   • Define the quantity of each raw material needed.
   • Allocate an item operation associated with this item, which will be referenced in Work Orders later.
   • If the item is a sub-assembly, its default BOM will be automatically retrieved.
   • Choose the source warehouse to track inventory.
   • Specify the expected percentage of scrap material after utilizing each raw material.
5. In the Scrap section, designate the scrap item expected during manufacturing and its quantity. Optionally, assign a rate if it’s a by-product rather than waste. Skip this section if all raw materials are fully utilized. If the scrap item is identical to the item being manufactured, categorize it as a Process Loss Item, with its quantity deducted from the manufactured item quantity.
6. Save and Submit the BOM entry.
7. In the Items table, ensure the “Include Item in Manufacturing” checkbox is selected for raw materials. If there are non-item operations or services to be included in the BOM, uncheck this checkbox. For instance, if a chemical treatment incurs a cost but isn’t an item itself, uncheck this box to exclude it from the manufacturing process.

2.1 Bill of Materials with Operations

Activate the “With Operations” checkbox to include Operations in the BOM. This option facilitates tracking the costs associated with various operations involved in manufacturing the Item. Operations can be easily added by configuring a template within the Routing master.

1. In the Operations table, list the operations required to manufacture the item.
   • Specify the workstation where each operation will be conducted. A default Workstation can be set using the Operation document.
   • Input the operating hourly rate, operation time in minutes, and the batch size associated with each operation. The operating cost will be automatically calculated based on these values.

Note: Workstations are primarily defined for product costing and scheduling operations in Work Orders, not for inventory tracking. Inventory management is handled within Warehouses specified in the Items table of the BOM.

The setting for “Transfer Material Against” is crucial for a BOM With Operations. Materials can be transferred in bulk against a Work Order or individually against Job Cards. Altering this setting impacts how “Material Transfer for Manufacture” is executed, either in a single transfer against the Work Order or multiple transfers against individual Job Cards. The choice of this option depends on various factors such as manufacturing time, item value, number of parts utilized, skill level of labor involved, etc.

2.2 Additional options when creating a Bill of Materials

1. Is Active: This checkbox allows for the possibility of manufacturing an item using an alternative set of materials or operations. If unchecked, it disables this Bill of Materials (BOM), allowing the use of another one.
2. Is Default: This designation ensures that this BOM is automatically selected in Work Orders when the corresponding item is chosen.
3. Inspection Required: Enabling this option mandates a quality inspection for both raw materials and finished goods. After checking this box, select the appropriate Quality Inspection Template.
4. Allow Alternative Item: This feature permits the substitution of specific materials with alternatives if they are unavailable. By checking this option, you can create and select an alternative item from the Item Alternative list. For instance, substituting plastic beads for plastic crystals.
5. Allow Same Item Multiple Times: In certain manufacturing scenarios, it may be necessary to include the same item multiple times. For example, using two metal pipes, each 0.5m in length, to form a specific shape. Checking this box allows for the selection of the same item multiple times to accommodate such requirements.
6. Set rate of sub-assembly item based on BOM: Enabling this option establishes the rate of sub-assembly items based on their respective BOMs. If unchecked, the rate will be derived from the Valuation Rate specified in the Item master.
7. Rate Of Materials Based On: This setting determines how the rate of raw materials used in the BOM is calculated, providing flexibility in pricing methodologies.
   • Valuation Rate: The rate is based on the Valuation Rate set in the Item master.
   • Last Purchase Rate: The rate is fetched from the last Sales Order/Invoice.
   • Price List: The rate is sourced from the Item Price defined in the Price List.

3. Features

3.1 BOM Costing

The Costing segment within a BOM provides an estimated manufacturing cost for the item.

This calculation is based on the Valuation Rate of the raw materials and sub-assemblies, along with the associated Operation costs.

If the BOM was finalized before the costs for items or operations were updated, you can refresh the costs by clicking the “Update Cost” button. This action retrieves the latest price/cost information.

Alternatively, you can enable automatic updating of BOM costs via the Manufacturing Settings, specifically by selecting the ‘Update BOM Cost Automatically’ option.

3.2 Materials Required (Exploded)

This table enumerates all the necessary raw materials needed to produce an item. It also includes the raw materials required for sub-assemblies, along with their respective quantities. The non-exploded table does not display the raw materials needed for manufacturing the sub-assemblies.

For instance, in manufacturing a plastic shaving brush, you require certain raw materials for the handle and bristles, with the latter being a sub-assembly. While you may manufacture the plastic handle using your own materials, the bristles may necessitate raw plastic crystals.

3.2.1 Do Not Explode

If the user wishes to exclude exploded items, they can enable the “Do Not Explode” checkbox in the BOM Item table.

Use Case: Laptop

• Motherboard (Kept in stock)
• Keyboard

For example, a company manufactures laptops that require two sub-assembly items: the motherboard and the keyboard. The company performs manufacturing once they receive the order from the customer. Since the manufacturing time required for the motherboard is longer than that for the keyboard, the company manufactures the motherboard individually regardless of sales orders and keeps it in stock. As the motherboard is already in stock, it helps reduce the overall manufacturing time of the main item, the laptop. Now, when preparing the BOM for the laptop in BizCentric, the company doesn’t want to explode the BOM of the motherboard but does want to explode the BOM of the keyboard. Therefore, we have added the “Do Not Explode” checkbox for the BOM item. With this feature, the user will enable the “Do Not Explode” checkbox for the motherboard and not for the keyboard.

3.3 Project and Website

The BOM can be associated with a Project to monitor progress, project costing, and other related aspects. In scenarios like engineer-to-order, where each order represents a project and sub-assemblies serve as tasks, linking them to a project facilitates tracking completion.

Furthermore, the BOM can be displayed on the website for open-source hardware products. Open-source hardware operates similarly to open-source software, where product specifications are publicly available.

3.4 BOM Template

Using the BOM template, you can generate BOMs for template items, which are utilized to create variant items. These BOMs serve as default templates when generating Work Orders for the variants of template items. Additionally, you can include the template items as raw materials within the template BOM. When generating a Work Order from the BOM Template, BizCentric offers the option to select the Item Variant corresponding to the template Item.

Furthermore, users can create BOMs for variant items using the template BOM. Here’s how:

1. Access the BOM Template.
2. Click on the “Create” button.
3. Select “Variant BOM.”
4. Choose the Variant Item for which you wish to establish the BOM.
5. If the raw materials in the BOM are template items, the system provides the ability to select the Item Variant.

3.5 After Submitting

Once the BOM is submitted, the following document types can be created against the BOM from the Dashboard.

 

4.Related Topics

1. Scrap Management
2. Material Consumption