The Bill of Material (BOM) is used to identify which raw material items can be used to produce a specific finished goods item when creating a work order. Multiple raw material codes can be used to create a finished good item. If the finished good item can be produced from more than one raw material, one (and only one) of the raw material items can be identified as the primary raw material. The primary raw material is used for planning purposes on the Planning Report and Production Planning Report. Raw material items that are used infrequently can be set up on the BOM and will appear in the Infrequent Finished Goods Item selection box when creating a work order.
Manufacturing cost standards can be added to the finished good item and can be different per raw material since the costs are based on the raw material source used. Manufacturing costs can be added to the finished good item if the Manufacturing Costs Accrued field in Ledger Options is set to Y (Y = Yes) and production-type cost adjustments have been defined.
Other raw material (ORM) items or components can be added to the BOM to identify the other ingredients, packaging, etc. items used to produce the finished good item.
There are two methods of adding ORM:
1. The other component item can be added to the BOM as Other Raw Material Standard. The quantity needed to produce the finished good item is entered on the BOM. When the work order is completed, the ORM item is deducted from inventory at the standard amount needed. The user cannot change the standard amount to the actual amount used.
2. The other component item can be added as Other Raw Material Actual. When the work order is opened or completed, the user can select the lot used and change the quantity to the actual amount used for the work order. The standard usage quantity will default as the next available lot.
A scrap factor can also be added to the ORM Standard usage quantity to increase the total standard quantity needed to account for waste and damaged ORM items. For example, to produce a finished goods item that is packed 10x5 lbs, the Other Raw Material Actual usage standard is one 50-lb master carton and ten 5-lb inner boxes. The Other Raw Material Actual usage would be one master carton and ten inner boxes. If the scrap factor on the master carton is 5% and the scrap factor on the inner boxes is 10%, the scrap factor would be entered as .05 for the master carton and entered as .10 for the inner box. The total standard quantity needed would be calculated as 1.05 for the masters and 1.10 for the inners to produce one finished goods item..
See Bill of Material for a detailed description of the fields used in Bills of Material.
Use the Available Actions links below for more information.
| Available Actions | Adding | Changing | Printing | Voiding |
Security Required : Inventory - Bill of Materials
| See Also |