Bill Of Materials

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Bill Of Materials

A bill of materials is a list of the components and subassemblies along with their necessary quantities for producing an item.

A BOM may also list the manufacturing processes necessary to create the item.

The most crucial document that will aid in the creation of other document kinds, such as Work Orders and Job Cards, is a Bill of Materials (BOM), which is at the center of the manufacturing system. Multi-level BOM is supported by ERPNext. Please visit this page to learn more.

A finished good or sub-bill assembly's of materials (BOM) is a list of all the materials (either purchased or made) and processes used in production. Each item (sub-assembly) in ERPNext could have its own BOM, resulting in a tree of items with several levels.

You must constantly have accurate BOMs in order to submit precise Purchase Requests.

To access the BOM list, go to:

Home > Manufacturing > Bill of Materials > Bill of Materials

Remember that a BOM cannot be changed once it has been submitted. Just the existing one can be canceled, duplicated, and submitted again. Making changes to a BOM can be laborious and time-consuming because it is connected to numerous locations in the Manufacturing module. So, it is a good idea to thoughtfully consider and complete the BOMs before submitting.

1. Prerequisites

It is suggested that you first create the following before making and using a BOM:

  • Item
  • Operation
  • Workstation
  • Routing

2. How to create a Bill of Materials

  1. Click on New in the Bill of Materials list.
  2. Choose the product that will be produced. The name of the item, UoM, business, and currency will be automatically fetched.
  3. The amount of the item that will be produced using this bill of materials must be entered.

  4. Choose the raw materials (Items) needed to make the item from the Items table. then carry out:

  5. Decide how much raw material will be used.

  6. Establish an item action for subsequent retrieval in work orders here.
  7. The item's default BOM will be retrieved if it is a sub-assembly.
  8. To track inventories, choose the Source Warehouse.

  9. Input the amount of scrap that will be left over after this raw material has been used.

  10. Choose the item and its quantity that will be produced as scrap under the Scrap section. If the scrap item is a by-product rather than waste, it may also have a rate. If all raw materials have been used, skip this section. The quantity of the process loss item is deducted from the quantity of the manufactured item if the scrap item is the same as the item to be created.

  11. Save and Submit.

You'll find the option to "Include Item in Manufacture" in the Items table. This checkbox needs to be selected for Raw Materials. Uncheck this option if there are any operations or services that you need to include in the BOM but which aren't necessarily manufactured goods. For instance, using a chemical to cure plastic incurs some expense, but since it is not an item, the cost must be monitored.

2.1 Bill of Materials with Operations

Choose the "With Operations" checkbox to add operations. Now, a table for operations is visible. This option is helpful for keeping track of the costs associated with the numerous Operations carried out to produce the item. By setting a template with the Routing master, operations may be readily introduced.

  1. Include the operations required to produce this specific item in the "Operations" table.
  2. You will be required to enter a workstation where the operation will be carried out for each operation. From the Operation document, a default Workstation can be selected.
  3. Input the Operating Hourly Rate, the number of minutes the operation took, and the size of the batch that was produced. These values will be used to compute the Operational Cost.

Workstations are only established for the costing of products and the scheduling of Work Order Activities; inventory tracking is not included. Warehouses, which are defined in the BOM's Items table, are used to track inventory.

A BOM with operations requires the setting of Transfer Material Against. Materials can be transferred against a Work Order in bulk or individual Job Cards. If this is changed, it will determine whether the "Material Transfer for Manufacturing" is performed once against the Work Order or repeatedly against the many Job Cards. Selecting this choice depends on a number of variables, like the amount of time it takes to create an item, its price, the quantity of parts it uses, the level of labor skill required, etc.

2.2 Additional options when creating a Bill of Materials

  • Is Active: Another set of materials and procedures could be used to create an item. If so, uncheck the box to remove this BOM from use and use another one.

  • Is Default: When the Item is chosen, this BOM will automatically be selected in Work Orders and other forms.

  • Inspection Required: As a result, "Quality Inspection" will be required for both raw materials and final goods. Check this box, then choose the Quality Inspection Template.

  • Allow Alternative Item: There are occasions when specific materials are not readily available for the manufacture of a final object. You can create and choose an alternative item from the Item Alternative list if you check this box. Using plastic beads rather than plastic crystals, as an illustration. To learn more, go to this page.

  • Allow Same Item Multiple Times: The same component might need to be added twice throughout some manufacturing processes. For instance, two 0.5 m long metal pipes can be combined to create another shape. As the UoM will show 1m as the total but we need 0.5m + 0.5m in the form of two pipes for production, the amount cannot simply be set to 2 and completed. This option enables you to choose the same thing more than once.

  • Set rate of sub-assembly item based on BOM: By checking this option, the rate of sub-assembly components will be determined by their BOMs. If left unchecked, the rate will be taken from the sub-assembly item's valuation rate.

  • Rate Of Materials Based On: Several factors can be utilized to compute the Rate of raw materials utilised.

    • Valuation Rate: the Item Master's specified Valuation Rate.
    • Last Purchase Rate: The most recent Sales Order/Invoice is used to retrieve the Rate.
    • Price List: The item price will be used to retrieve the Rate. To learn more, go to this page.

3. Features

3.1 BOM Costing

A BOM's Costing section estimates the item's production costs.

The valuation rate of the included raw materials/subassemblies and the operational costs are used to determine the costing.

If the costs for the Items/Operations were not updated when the BOM was submitted, you can amend the costs by clicking the Update Cost button. This will retrieve the most recent price and charges.

Via the Manufacturing Options' "Update BOM Cost Automatically" option, the BOM cost can also be set to be updated automatically.

3.2 Materials Required (Exploded)

The raw ingredients needed to make each item are listed in the following table. Together with the amounts, it also retrieves the raw materials for the sub-assemblies. The raw materials necessary to make the sub-assemblies will not be listed in the non-exploded table.

For instance, you need some raw materials and the bristles as a sub-assembly to make a plastic shaving brush. You create your own plastic for the handle, but you use unprocessed plastic crystals for the bristles.

3.2.1 Do Not Explode

The "Do Not Explode" checkbox in the BOM Item table must be enabled if the user wants to exclude the exploded items.

Case of Use:

  • Laptop
  • Motherboard (Kept in stock)
  • Keyboard

A business created a laptop that needed a keyboard and a motherboard as subassemblies. As soon as the business receives a consumer order, it begins manufacturing. Because the manufacturing time for the motherboard is longer than that for the keyboard, the corporation manufactures each motherboard separately, independent of sales orders, and keeps them in stock. Due to the Motherboard's current supply status, the manufacturing time for the main item, the Laptop, has been reduced overall. The BOM for the laptop is now being prepared in ERPNext, however instead of exploding the BOM for the item Motherboard, they wish to exploding the BOM for the item Keyboard. As a result, we have introduced the "Do Not Explode" checkbox for the BOM Item. By doing this, the user will turn on the "Do Not Explode" checkbox for the motherboard but not for the keyboard.

3.3 Project and Website

To monitor progress, project costs, etc., the BOM can be connected to a project. Every order may be a Project in the case of engineering to order, and the subassemblies would be Tasks. In that situation, it is possible to monitor the completion by connecting to a project.

The website for open-source hardware goods can also display the BOM. Similar to open-source software, where the item specs are made available to the public, is open-source hardware.

3.4 BOM Template

You can make BOMs for template items using the BOM template (against which you create variant items). When creating Work Orders using the variants of the template item, these BOMs can be used as the default BOM. The template items can also be added to the template BOM as raw materials. When creating a work order using a BOM template, ERPNext offers the option to choose an item variant in place of the template item; see the following screenshot for more information.

Using the template BOM, the user can also create the BOM for the variation item. To create the modified BOM:

  • Go to the BOM Template.

  • Click on Create button.

  • Click on Variant BOM.

  • Select the Variant Item for which you want to make the BOM.

  • If the raw materials in the BOM is a template Item, then system gives provision to select the Item Variant.

3.5 After Submitting

The following document kinds can be created against the BOM from the Dashboard after the BOM has been submitted:

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