RisingERP - Bill Of Material (BOM)

Bill of Materials (BOM)

A Bill of Materials (BOM) serves as a comprehensive list detailing the items and sub-assemblies, along with their respective quantities, required for the manufacturing of a specific item. Additionally, a BOM may incorporate the necessary manufacturing operations essential for the production process.

At the core of the Manufacturing system, a BOM plays a pivotal role in generating other document types such as Work Orders and Job Cards. RERP is equipped to support multi-level BOMs, allowing for intricate manufacturing processes.

To ensure accurate Purchase Requests, maintaining accurate BOMs is imperative.

Access the BOM list by navigating to: > Home > Manufacturing > Bill of Materials > Bill of Materials

Please note that once a BOM is submitted, it cannot be edited. You can only cancel the existing one, duplicate it, and submit another. Given the various linkages to the Manufacturing module, making changes to a submitted BOM can be time-consuming. Therefore, it's advisable to carefully fill out the BOM before submission.

1. Prerequisites

Before creating and utilizing a BOM, it is recommended to create the following first:

1. Item
2. Operation
3. Workstation
4. Routing

How to Create a Bill of Materials

Navigate to the Bill of Materials list and click on New. Select the Item for manufacturing. The Item name, UOM, company, and currency will be auto-fetched. Enter the quantity of the Item to be manufactured. In the Items table, choose the raw materials (Items) required for manufacturing. Proceed to:

1. Specify the quantity of Raw Material used.
2. Set an Item operation to be fetched in Work Orders later.
3. If the Item is a sub-assembly, the default BOM for it will be fetched.
4. Choose the Source Warehouse for inventory tracking.
5. Enter the scrap percentage after using the raw material.

Under the Scrap section, select the scrap Item created during manufacturing and specify its quantity and rate if applicable. Skip this section if 100% of raw materials are utilized. If the scrap Item is the same as the Item to be manufactured, it is considered a Process Loss Item, and its quantity is subtracted from the manufactured Item quantity.

Save and Submit.

In the Items table, find the option 'Include Item in Manufacturing'. Raw Materials should have this checkbox ticked. If there are Operations or services not treated as manufacturing Items, uncheck this checkbox. For example, chemical treatment of plastic incurs costs but is not a distinct Item; its cost needs to be tracked.

2.1 Bill of Materials with Operations

To add Operations, check the 'With Operations' checkbox. An Operations table will be visible, allowing tracking of costs for various Operations performed during manufacturing. Operations can be added easily by setting a template with the Routing master.

In the “Operations” table, add the operations necessary for manufacturing the Item. For each operation, specify the Workstation where it will be performed. A default Workstation can be set from the Operation document. Enter the Operating Hourly Rate, Operation Time in minutes, and the Batch Size created with the Operation. The Operating Cost will be calculated based on these values.

Note: Workstations are defined for product costing and Work Order Operations scheduling, not for tracking inventory. Inventory is tracked in Warehouses set in the Items table of the BOM.

The 'Transfer Material Against' field must be set for a BOM With Operations. Materials can be transferred against a Work Order in bulk or individual Job Cards. This option influences whether the 'Material Transfer for Manufacture' is done against the Work Order at once or multiple times against individual Job Cards. This choice depends on factors such as the time taken to manufacture the item, the value of the items manufactured, the number of parts used in manufacturing, the skill of labor involved, etc.

2.2 Additional Options When Creating a Bill of Materials

1. Is Active: Uncheck to disable the BOM for manufacturing an item using an alternate set of materials/operations.
2. Is Default: This BOM will be selected by default in Work Orders when the Item is selected.
3. Inspection Required: Mandates 'Quality Inspection' for raw materials and finished goods. Select the Quality Inspection Template after checking this checkbox.
4. Allow Alternative Item: Permits the creation and selection of an alternative item from the Item Alternative list when specific materials are unavailable.
5. Allow Same Item Multiple Times: Enables the selection of the same item multiple times in cases where it needs to be added more than once.
6. Set Rate of Sub-assembly Item Based on BOM: Setting the rate of sub-assembly items based on their BOMs can be enabled. If unchecked, the rate is fetched from the Valuation Rate of the sub-assembly Item.
7. Rate Of Materials Based On: The rate of raw materials used can be calculated based on different parameters, such as Valuation Rate, Last Purchase Rate, or Price List.

Features

3.1 BOM Costing

The Costing section in a BOM provides an estimated cost of manufacturing the Item, considering the Valuation Rate of raw materials/sub-assemblies and Operation costs.

If the BOM was submitted when costs for Items/Operations were not updated, the costs can be updated using the 'Update Cost' button. This fetches the latest prices/costs.

Update Cost

BOM cost updating can also be set to occur automatically via Manufacturing Settings with the 'Update BOM Cost Automatically' option.

3.2 Materials Required (Exploded)

This raw materials needed to manufacture an Item, including raw materials for sub-assemblies and their quantities are regarded as "exploded". The non-exploded table excludes raw materials for producing sub-assemblies.

For instance, to manufacture a plastic shaving brush, you need raw materials and bristles as a sub-assembly. For the handle, you manufacture your plastic, but for the bristles, you use raw plastic crystals.

3.2.1 Do Not Explode

To exclude exploded items, enable the "Do Not Explode" checkbox in the BOM Item table.

Use Case: Laptop

1. Motherboard (Kept in stock)
2. Keyboard

Suppose a company manufactures laptops that require two sub-assembly items: Motherboard and Keyboard. The company performs the manufacturing once they receive customer orders. The manufacturing time required for the Motherboard is longer than for the Keyboard. Therefore, the company manufactures the Motherboard individually, irrespective of the sales orders, and keeps it in stock. As the item Motherboard is already in stock, it helps reduce the overall manufacturing time of the main item, Laptop. While preparing the BOM for the Laptop in RERP, they don't want to explode the BOM of the item Motherboard but want to explode the BOM of the item Keyboard. Therefore, they enable the checkbox "Do Not Explode" for the BOM Item of the Motherboard and not for the Keyboard.

3.3 Project and Website

The BOM can be linked to a Project to track progress, Project costing, etc. In the case of engineer-to-order, every order could be a Project, and the sub-assemblies would be Tasks. The completion can be tracked by linking to a Project in that case.

3.4 BOM Template

The BOM Template feature enables the creation of BOMs for template items, against which variant items are generated. These BOMs serve as default templates when generating Work Orders for the variants of the template item. Additionally, you can include the template items as raw materials in the template BOM. When creating a Work Order from the BOM Template in RERP, there is a provision to select the Item Variant corresponding to the template Item. For more details, refer to the screenshot below.

Variant Selection

Users can also formulate a BOM for the variant item utilizing the template BOM. To create the variant BOM:

1. Navigate to the BOM Template.
2. Click on the Create button.
3. Choose Variant BOM.
4. Select the Variant Item for which you intend to create the BOM.

If the raw materials in the BOM are a template Item, the system provides the flexibility to select the Item Variant during the process.