Adding Bill of Materials

What is a Bill of Materials?

A Bill of Materials (BOM) is a list that includes the final product to be manufactured, the raw materials involved in the manufacturing process, and the waste materials generated from it. It also includes the manufacturing operations (workstations) and the direct expenses related to the production process. Based on the BOM and its contents, you can create manufacturing orders, and the manufacturing order will carry the same details from the BOM, with the option to modify them.

How to Add a Bill of Materials?

1. Click on “Manufacturing“.
2. Choose “Bill of Materials“.
3. Click on “Add Bill of Materials“
4. Enter the bill of material information as follows:
   • Name: Add a name for the bill of material.
   • Code: An automatic number generated by the system for each Bill of Materials.
   • Turn on the “Active” button if you want to activate the BOM.
   • Turn on the “Default” button if you want this BOM to be automatically selected in a manufacturing order after the final product is chosen.
   • Products: Select the final product to be manufactured from the dropdown list.
     • The product must be added already in your system to appear here. For more information on how to add a new product, refer to this guide.
   • Account: Choose an account from the chart of accounts to assign to the BOM.
     • You can modify the chart of accounts and add a new account for this BOM. For more information, refer to this guide.
   • Quantity: Enter the quantity of the product to be manufactured.
   • Production Routing: Choose the production route to assign to the BOM.
     • For more information on how to add a production routing, refer to this .
   • Materials
     • Products: Choose the raw materials used in manufacturing the product.
       • For a raw material to appear here, it must be added as a product in the system. For more details, refer to the guide for adding a new product.
       • Click the “+Add” button if you want to add more than one raw material.
     • Quantity: Enter the required quantity of raw material to produce the specified quantity of the product.
       • The unit of measurement is based on what was defined when adding the raw material to the system.
     • Price: This is automatically determined based on the price entered when adding the raw material in inventory. It will either match the average cost price or the purchase price if there is no average cost price from various purchases.
     • Production Operation: Select the production operation during which this raw material is needed.
   • Expenses
     • Account: Enter the account to link this expense to from the chart of accounts.
       You can modify the chart of accounts and add a new account for this expense. For more details, refer to this guide.
       • You can modify the chart of accounts and add a new account for this expense. For more details, refer to this guide.
     • Cost Type: There are three different types based on how the cost is calculated. The difference between them becomes clear when issuing a manufacturing order with a different quantity than the one listed in the BOM.
       Choose from the following options:
       • Fixed Amount: In this case, the cost remains fixed even if the number of products in the manufacturing order changes.
         • Example: If an expense costs 100, and the BOM lists a quantity of 5, but the manufacturing order is modified to 7, the cost remains 100 and will be allocated to the 7 products instead of 5.
       • Based on QTY: In this case, the cost is distributed based on the quantity of products in the BOM. If the quantity in the manufacturing order changes, the total cost will be recalculated based on the new number of units.
         • Example: If an expense costs 100 and the BOM lists a quantity of 5, but the manufacturing order is changed to 7, the total cost will change to 140.
       • Formula: A flexible method where you can input variables to calculate the cost. The default system formula is:
         • Amount in BOM * (Quantity in BOM / Quantity in Manufacturing Order) This is the same as calculating the cost based on quantity.
     • Amount: Enter the value of the expense.
     • Description: Add a description of the expense, if needed.
     • Production Operation: Select the operation of production where this expense occurs.
   • Manufacturing Operations
     • Workstation: Select the workstation from the list of workstations you have previously added to the system.
     • Operating Time: Specify the operating time based on the unit set for the workstation.
       • Example: If the workstation unit is “minutes” and you want the operating time to be one hour, enter “60.” If the unit is “hours” and you want the operating time to be one hour, enter “1.”
     • Description: Add any description related to the workstation.
     • Production operation: Select the production operation for this workstation.
   • Scrap Items
     • Products: Enter the product to be considered as waste.
     • Quantity: Enter the quantity of the waste product.
     • Price: Enter the price of the waste product.
     • Production Operation: Select the production operation where the waste material is generated.
5. Click the “Save” button.