Product lifecycle management in SAP covers all product-related data and processes in the system. Two major data objects used in SAP Product Lifecycle Management are the bill of materials and the routings or master recipe. This document will focus on the Bill of Materials.
A bill of material represents essentially a physical or logical structure of a semi-finished or finished product.
This can be used for different purposes in SAP. Those purposes are explained in the following section regarding BOM usages.
BOM Usages
Production
This is the one that can be used with a master recipe. This BOM is used in the context of manufacturing. The finished product being manufactured is usually decomposed into a packaging product and a semi-finished material that itself contains raw materials. For example:
A sauce manufacturing company distributes thousands of different products around the world.
Those thousands of products are different finished products.
Each finished product has one semi-finished product. The same semi-finished product can be used by various finished products, because we have actually the exact same sauce being sold in different packaging. Therefore, my finished product does contain essentially two things: a semi-finished product and packaging products. By packaging product, we mean not only the recipient in which the semi-finished product is contained but also the labels (with barcodes) that have to be put on the recipient.
The semi-finished contains its own bill of materials as well. To produce the sauce, different raw materials such as sugar and salt are mixed with other ingredients to eventually constitute the semi-finished sauce.
Engineering
An engineering bill of material in SAP is used mainly when we want to manage changes on the bill of material. It is not relevant for sales or manufacturing. It is mostly used for « design » purposes. However, the functionality of « engineering change management » in SAP does cover that requirement.
Universal
A universal BOM is a bill of material that can be used for different purposes: sales, production, maintenance, etc.
Plant Maintenance
2 types of BOM scan be used for plant maintenance usage: equipment and functional location BOM.
An equipment BOM is used to display the structure of an equipment as well as the spare parts required to perform the equipment maintenance.
A functional location BOM contains the functional location, some documents and some material masters relevant for the maintenance of the functional location.
Sales and Distribution
The best practice recommends using a sales-related BOM when doing make-to-order production according to the customer requirements. This BOM is linked to the material master and the sales order either at the header or the item level. We can also use the variant configuration function to execute this process.
A good example would be the DELL laptops: on the online store, you can customize the laptop according to your requirements. The laptop will be built and shipped to you accordingly.
Costing
Costing BOMs are used for the purposes of product costing. They are cherished by FICO consultants on most manufacturing projects! A costing BOM is a material structure viewed with the lens of cost control. The cost of every single component is being rolled up in order to figure out the actual product cost.
Other BOM Functions
BOM Validity
The validity of a Bill of Material can be asserted in the system from two different angles:
Area of validity
Period of validity
For the area of validity, we are referring to the logistics organizational level for which the BOM is valid. There are two levels at which a BOM can be created: plant and client* levels.
* Client level is the highest organizational level in SAP. Plant is an organizational level that usually represents a site or a physical address where inventory is stored, maintenance and manufacturing operations are being executed.
For the period of validity, the two fields « valid from » and « valid to » enable us to manage the effectivity of a bill of material. This is particularly useful for seasonal products or companies that produce thousands of products and regularly terminate some of them.
Engineering Change Management
The engineering change management functionality in SAP product lifecycle management enables to not only put validity dates on a a BOM, but also to TRACK those changes in the meantime by creating version numbers for a specific bill of material.
This is particularly useful in a manufacturing environment. Engineering change orders are created with the Bill of Material as a reference.