Recipes: bill of materials (BOM)
A BOM (Bill of Materials) is the recipe for a product. It says what goes into a fixed quantity of the product. Every work order uses a BOM to know what materials to issue and what the product costs.
Before you start
- The finished good and all raw materials and packaging exist as items.
- Know the real recipe for one production run, including packaging and normal losses.
Steps
Create a BOM
- Go to Manufacturing > BOM and click + Add BOM.
- In Item, choose the finished good, for example "Corn snack 50 g, cheese".
- In Quantity, enter the quantity this recipe makes, for example 1,000 (packs).
- In Rate Of Materials Based On, choose how materials are costed, usually Valuation Rate (what you paid). Your consultant may set this for you.
- In the Items table, add each ingredient and packaging item with the quantity for 1,000 packs:
| Item | Qty | Unit |
|---|---|---|
| Corn grits | 42 | Kg |
| Sunflower oil | 8 | Litre |
| Cheese seasoning | 4 | Kg |
| Printed film, cheese | 3 | Kg |
| Carton | 21 | Nos |
- Click Save. Check the costs (see below).
- Click Submit. Only a submitted BOM can be used in a work order.
Record scrap and normal loss
Some material is always lost: broken snacks, corn dust, film trim.
- In the Scrap & Process Loss section, add a row in Scrap Items for anything you keep or sell, for example "Broken snacks", 2 Kg, with its rate.
- If part of the output is simply lost, enter the % Process Loss.
Scrap items go into stock when you record production. Their value reduces the cost of the finished good.
Check the cost
After saving, the Costing section shows Raw Material Cost, Scrap Material Cost and Total Cost. Divide the total by the BOM quantity to get the cost per pack. Example: total ETB 9,885 for 1,000 packs = about ETB 9.89 per pack (example prices only).
When material prices change, open the submitted BOM and click Update Cost to refresh the figures.
Change a recipe (versions)
You cannot edit a submitted BOM's items. To change a recipe:
- Open the current BOM, click the ... menu and choose Duplicate. Or create a new BOM for the same item.
- Change the quantities and submit the new BOM.
- Tick Is Default on the new BOM, so new work orders use it.
- On the old BOM, untick Is Active when you no longer want anyone to use it.
Good to know
- One item can have many BOMs, for example a trial recipe and the standard one. Only one is the default.
- Write the recipe for a real run size (for example 1,000 packs). Small quantities give rounding errors.
- Include packaging in the BOM. If you forget the film and cartons, their stock will never go down.
- With Operations adds steps (mixing, frying, packing) and Job Cards. Leave it off unless you want to track each step.
- Old work orders keep the BOM they were made with. A new default only affects new work orders.