BILLS OF MATERIAL(Part 1)

As far as I am concerned the answer is simple, every bit of material that goes into the product during the manufacture of a parent and anything that is used to produce the parent such as process material or consumables should be included. The only requirement is that the usage can be related to a quantity per. This approach ensures that all the material required to produce a parent is ordered in line with the actual requirement. Further, a secondary ordering system is not required and when the product mix alters or overall volumes alter the correct quantities of these items are ordered. The product cost becomes more accurate as it reflects what is actually used. 
 

A bill of material (single level bill) is defined as a listing of all the sub-assemblies, intermediates, parts, and raw material that goes into a parent assembly, showing the quantity of each required to make an assembly. 

A product structure or multi-level bill, is a display of all the components directly or indirectly used in a parent, together with the quantity required of every component. If a component is a sub-assembly, blend, or intermediate, all of its components will also be exhibited and all of their components, down to purchase parts and materials. 

A product structure record is a computer record defining the relationship of one component to its immediate parent and containing fields such as quantity per, engineering effectivity dates, and scrap factor. 
 

This is the BOM that most users think of. It details the parts required to build a parent by being a collection of product structure records. It is used to create the picking list enabling the correct items to be issued from stores in the correct quantities. The MRP module creates requirement records for each component on the BOM for each planned order established during the MRP netting process. 

A basic principle of BOM's is that the parent will be produced and booked to stock. This parent is subsequently issued out of stock as a component on another higher level BOM. In the real world though, there are many cases where from a practical point of view, parts need to be grouped in a bill of material for manufacturing purposes but it is not practical to put it into stores and then issue it out again. 
 

An assembly is identified to be a phantom either by a field in its item master record or where it is called up as a component on the higher level bill of material. In other words, an item may be a phantom in every case or only when linked to a specific bill of material. When an assembly is identified as a phantom you should change the lead time to zero and build any extra lead time into the high level assembly lead time if it is needed. Also you need to change the order policy to "lot-for-lot" so that the correct requirements for the assembly is passed through to its components. 

A good example of a phantom is the pastry case for a meat pie. First the pastry is made (a sub-assembly) and then used by adding the filling to produce the meat pie without the pastry going back to stores. 

We say the sub-assembly is consumed during the manufacturing process. When the picking list for the higher level parent is produced it includes the parts to make the phantom and not the phantom sub-assembly itself. 

Having now had a look at the structuring content and use of a standard or traditional bill of material and the application of phantoms, I will leave the other types for discussion in my next article. Next time I will look at common parts bills, batch bills and breeder bills.