Understanding Bill of Materials
In this document, you can view the detailed breakdown of the Bill of Materials module, how it works, and its benefits in Zoho ERP.
Bill of Materials in Zoho ERP
The Bill of Materials (BOM) helps you plan the production of an existing item in your organization by defining two key elements required for manufacturing:
- Components – Raw materials to produce the item.
- Operations – Processes involved to produce the item.
It acts as a detailed blueprint and keeps your entire manufacturing flow organized.
Difference Between Bill of Material and Manufacture Order
| Aspect | Bill of Materials (BOM) | Manufacturing Order (MO) |
|---|---|---|
| Definition | A bill of material defines the list of components, and operations required to manufacture a item. | A manufacturing order is used to initiate and track the actual production of the item. |
| Purpose | It acts as a blueprint to manufacture an item. | It initiate and track the manufacturing process. |
| Usage stage | Created during the item manufacturing planning stage. | Created during the production execution stage. |
| Inventory impact | Does not affect inventory directly. | Components quantity decreases and item to produce quantity increases |
| Example | 2 screws, 1 motor, and 1 casing to make 1 fan. | Manufacture 100 fans using the defined bill of material. |
Benefits of Bill of Materials
Provides a clear structure of required components and operations required to manufacture an item, helping businesses plan production accurately.
Helps track material consumption and control manufacturing costs effectively.
Ensures consistency in production by standardizing components and operations.
Lifecycle of Bill of Materials
The lifecycle of a Bill of Materials in Zoho ERP typically follows these stages:
Draft – The Bill of material is created but not finalized. You can still edit components, operations and quantities.
Confirmed – The Bill of material is confirmed and ready to be used for production.
Create Manufacturing Order – A Manufacturing Order is created using the confirmed bill of material to start manufacturing the defined item.
Pre-requisites to Create Bill of Material
To create a bill of material, complete the following steps in Settings:
Once these are set up, create a bill of material.