12 December 2022
Sales BOM (Bill of Materials): What you need to know
What is a Sales BOM (Bill of Materials)?
A Sales Bill of Materials is a business document that lists the components and products necessary to complete a sale. It typically includes product descriptions, SKUs, part numbers, quantities and prices for each item. The Sales BOM serves as the “blueprint” for your sales order processing system by providing all the information necessary to complete a sale.
The Sales BOM is an essential document as it provides the framework for ensuring accurate and consistent cataloguing of products, inventory management and order fulfilment. It can also be used by customer service representatives to answer questions about products, pricing and availability efficiently. Additionally, it’s essential for accurately forecasting demand for inventory and other products as well as in budgeting.
Creating one can be time-consuming, but it is worth the effort as it ensures that everyone involved in the sale – from sales staff to customer service personnel – has a clear picture of what’s needed to complete the transaction. It also helps optimise inventory management, ensuring that the right products are in stock at all times.
What does a BOM usually include?
A Sales BOM usually includes the following information
• Product descriptions and SKUs
• Part numbers
• Item weight and dimensions
• Shipping information
• Payment terms
• Special instructions (such as tax rate, delivery date, etc.)
It’s important to ensure that the Sales BOM is kept up-to-date as products, prices and other details can change over time. Furthermore, all stakeholders involved in the sale should be made aware of any changes as soon as possible to ensure that everyone is working with the latest version.
How do you create an effective Sales BOM (Bill of Materials)?
When creating a Sales BOM, it’s important to include product descriptions and SKUs so that customers know exactly what they’re ordering.
Additionally, pricing should be included for each item as well as any discounts or other promotions that apply. Finally, quantities should be indicated to ensure that enough items are ordered to meet customer demand.
To ensure accuracy, it’s a good idea to double-check the BOM before submitting it. This includes verifying that all the products and pricing are correct as well as ensuring that all necessary components are included.
Additionally, it’s important to cross-reference the Sales BOM with the Production BOM to make sure that all necessary items are included in the sales order.
A Sales BOM is a critical component of any business’s sales and order processing system, as it provides the information necessary for accurate order fulfilment. By properly constructing your Sales BOM, you can ensure that your customers are getting the products they need, when they need them. Properly managed Sales BOMs help ensure that all customer orders are completed in a timely and efficient manner.
How does Sales BOM (Bill of Materials) help a business?
A Sales BOM helps a business in a variety of ways. It can be used to quickly identify the materials needed to fulfil customer orders, provide accurate pricing, and identify cost savings opportunities.
It can also be used to streamline the manufacturing process by providing a detailed list of components needed to create a product. Additionally, a Sales BOM can be used to track inventory levels and ensure that all necessary components are in stock.
What are the advantages of BOM (Bill of Materials)?
A Sales BOM has several advantages for businesses. It can help streamline order processing by providing an accurate list of all components needed to complete a sale.
Additionally, it helps customers quickly identify the products they need and their associated costs. It can also help businesses forecast demand for products and plan inventory levels accordingly. Finally, it can provide cost savings opportunities by identifying cost-saving alternatives.
What are the two BOM (Bill of Materials) structures?
The two most common BOM structures are the hierarchical BOM and the flat BOM. The hierarchical BOM is an organised list of components that are arranged in a top-down fashion with the highest-level component at the top, and each lower-level component listed beneath it. The flat BOM is an unorganised list of components with no hierarchy or structure. There are also companies that use the terms 'single-level' and 'multi-level' respectively.
When creating a Sales BOM, it’s important to choose the right structure for your business needs. The hierarchical BOM is best suited for complex products with many components, while the flat BOM is better suited for simple products with fewer components.
What does Explosion and Implosion mean in Bill of Material (BOM)?
Explosion and implosion are two terms used in the context of a Bill of Material. Explosion is when the components of a BOM are broken down into their individual parts and listed separately, while implosion refers to the process of combining multiple items in a BOM into one item.
Explosion and implosion can be used to create more organized and efficient BOMs, making it easier to identify the components needed for a particular product or project.
Other types of Bills of Material (BOM)s
Yes, there are other types of BOMs that can be used in a variety of different industries.
Used to identify the components that go into creating a product. Manufacturing BOMs help manage production and inventory, while Supply Chain BOMs are used to identify and track the materials going into a product.
Used to identify the different configurations of a product that are offered for sale. These BOMs can also help create custom products with specific features, as well as identify the components needed for product servicing and repair.
Provide a detailed list of components needed to produce a particular product. Engineering BOMs provide an organized view of the parts and components used in constructing a product, while Manufacturing BOMs provide a detailed list of the materials needed for production.
Assembly BOMs are used to list the components and materials needed for assembling a product. An Assembly BOM includes items such as screws, nuts, and bolts, as well as details about how the product is assembled.
A Production BOM is used to help streamline the production process. Production BOMs list the steps and materials needed for each stage of the production process, helping to ensure that all necessary components are available when needed.
A production BOM can be used in conjunction with a Sales BOM to ensure that customer orders are fulfilled quickly and accurately. The production BOM will contain the steps and materials needed to create a product while the sales BOM lists all components needed for an order. By combining both of these lists, businesses can ensure that they have everything needed to fulfil orders and minimise production delays.
Template BOMs are used to create custom Bill of Materials for similar products. By creating a template, businesses can quickly and easily produce BOMs for products that have similar components. This makes it easier to identify cost savings opportunities, streamline order processing and manage inventory levels.
Bill of Materials in Inventory Management
The proper management of a Sales BOM is essential for an efficient inventory management system. By properly tracking and updating your BOM, you can ensure that your inventory levels are accurate and up to date. This helps ensure that all customer orders are fulfilled on time and in full, as well as avoiding unnecessary over- or under-ordering.
Additionally, a Sales BOM can help identify cost savings opportunities by tracking inventory levels and identifying alternative components and materials that may be cheaper.
Parent and Children Items in BOM
The terms “Parent” and “Children” are used in the context of a Bill of Material (BOM). A Parent Item is the highest-level component of a BOM while Children items are the components that make up the Parent Item.
For example, a laptop may have a Parent Item of “Laptop” and Children Items such as “Motherboard,” “Screen,” and “Battery.”
By tracking Parent and Child Items in a BOM, businesses can better track components and manage inventory levels.
How ERP Systems help with BOM (Bill of Materials) Management
ERP (Enterprise Resource Planning) systems are invaluable tools when it comes to the management of a Sales BOM. These systems can automate many tasks associated with BOM management, such as inventory tracking and cost-saving analysis.
Additionally, ERP systems can help businesses maintain accurate records of their sales BOMs, ensuring that all customer orders are fulfilled correctly and on time.
Finally, ERP systems can help provide real-time insight into inventory levels and costs, so businesses can make informed decisions about their operations.
The Sales Bill of Materials (BOM) is an essential tool for businesses that need to accurately track the components and materials needed for their products or services. It helps businesses quickly identify what they need and their associated costs, allowing them to forecast demand and manage inventory levels accordingly.
Additionally, BOMs can help provide cost savings opportunities by identifying alternative components and materials.
Finally, ERP systems can help automate many tasks associated with BOM management and provide real-time insight into inventory levels and costs.
If your business is in need of BOM Management, Inventory Management or ERP Systems, do send us a message and we'll be glad to offer support.