ERP Bill of Materials System for Managing Production Costs

Posted by Gerry Poe

The Bill of Materials System in an ERP software solution facilitates an accurate expected cost against which to track actual production costs.  The complete bill forms the basis for material and capacity planning, shop floor control and costing.  The best ERP software give you the ability to create and maintain a model of your manufactured or assembled products as well as generate what-if costing scenarios.

The Bill of Materials system in an ERP software system enables you to construct quantity or percentage relationships between assemblies (final product) sub-assemblies (bulk batches) and components (raw materials) using up to 15 levels and you can assign each component to a selected operation in the parent routing.

Various types of bills can be added:

 erp check Planning bill

erp check  Batch bill

erp check  Single Level bill (kits)

erp check  Phantom part (part of a BOM for grouping purposes)

erp check  Notional part (part of a BOM for Co-Products)

erp check  Made-in bill

syspro bill of materials

The image you see above is an example screen shot from the award winning ERP software SYSPRO.

If you are considering an ERP software system, consider using a checklist for 'must have' features.

Bill of Materials Features in the best ERP software system:

erp check  Supports up to 15 levels

erp check  Multiple recovery rates per cost center, work center and employee

erp check  Track time and capacity in different units of measure

erp check  Define component requirements up to 6 decimal places

erp check  Document routing instructions and component notes

erp check  Link pictures and videos to Bill of Materials

erp check  Validate structures and operations and provide notification of potential problems

erp check  Calculate BOM costs per warehouse

erp check  Define movement time between operations

erp check  Calculate manufacturing lead times

erp check  ‘Where-used’ query with ‘replace where-used’ function

erp check  Import structure and routings from third-party systems (e.g. CAD)

erp check  Calculate dynamic-elapsed time and capacity required

erp check  Transfer rolled-up BOM costs to unit cost of item

erp check  Indicate move time between work centers

erp check  Capacity calendar per work center and productive units

erp check  Define components as quantity per, % of parent or specific quantity regardless of batch

erp check  Indicate scrap percentage and/or quantity with optional progressive scrap

erp check  Define and process parent and component quatities in a unit of measure other than stocking

erp check  Update work center information when associated cost center information changes

Possibly your company may fall into the category of "under-utilized" or "broken" production cost management where you have a disconnect between the expected cost vs. the actual cost.  An ERP software expert will break down the essentials for you and if they are worth their salt, pay for their services many times over.

The Bill of Materials system is an important piece in an ERP software solution.  Download the Bill of Materials by SYSPRO fact sheet today to learn more:

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Tags: Factsheet, Bill of Materials, SYSPRO

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