Many businesses sell both end products and the subcomponents that go into them. Sage 50 handles this with a BOM tab on the product record for each end product.
The BOM combines stock assembly and process costing with the stock module. It also supports trial kitting, maximum build calculators and work ticket processing.
Requirements
A BOM is a way of tracking the component parts that make up an end product. It can also be used to track the costs of each individual component. It’s useful for tracking production processes and identifying potential shortages, which can then be addressed by raising purchase orders. BOMs can also be used to improve quality by defining the correct sequence of operations and the required resources.
A good BOM should contain as much information as possible so that stakeholders can understand it. It should include a description of the product, a brief summary of the manufacturing process, and a list of the components needed to complete the process. It should also indicate the quantity of each component needed to create the final product. A BOM should also be able to identify potential issues with the product, including any part shortages and the amount of time required for each operation.
Unlike Sage 50, Cim50’s BOM has full assembly and stock management functionality. It allows you to create works orders and record the build quantities of finished products, manage raw material and work-in-process stock, record serial or batch numbers and control barcode stock. It also includes comprehensive costing analysis and a flexible resource register for labour, machine and tool resources that can be associated with individual BOMs and appear on any Works Orders created from those BOMs.
Sub-components
The BOM is a fully featured inventory that defines the raw materials, assemblies, sub-assemblies, components and parts needed to manufacture a finished product. It also includes facilities to capture operational items, costs and timings such as machine setup, run and close-down. It can be used on its own for light manufacturing or in conjunction with other Sage 200 modules such as Works Orders and Material Requirement Planning.
Many Sage users find that their bill of materials needs extend beyond what Sage 50 has to offer. The Stock50 manufacturing add-on provides intelligent assembly and works order functionality that works hand in hand with stock management and barcode stock control. It can create a full works order from an existing BOM, calculate finished product build quantities, manage serial numbers and batching and automatically record raw materials and finished goods stock transfers.
When adding or amending a BOM, it is important to understand the different bits of information that can be included in each line item. These include the reference, description, unit of measurement and version of the BOM, the person who created or amended it and the date. These fields are important because they determine how the BOM is interpreted in future transactions. For example, a revision made to a BOM will only be effective for transactions dated after the date of the modification.
Assembly
If your product is a kit, assembles or bundles you will need to set up a Bill of Materials. This is a comprehensive inventory list of raw materials, sub-assemblies and components required to build your finished product. It also includes detailed item descriptions, part numbers and quantity on hand. This allows you to track production costs and improve quality by avoiding misplaced parts. It also allows you to record engineering changes and bill revisions which will increase product quality.
Sage 50’s assembly feature is ideal for stock management, however if you regularly manufacture products from scratch you will quickly outgrow the standard BOM features. In this situation it may be more beneficial to use a fully integrated ERP solution that offers intelligent works order management and barcode stock management. This will allow you to create production recipes, verify work orders, calculate machine and labour overheads, record assembly builds and manage raw material and finished goods stock.
To use the assembly feature simply select a product in the database and click on the Bill of Materials tab within Maintain Inventory Items. Then, select the Revisions button and a window will appear listing all the existing BOM revisions for that item. The original BOM is listed as Revision 0 and any changes made to it will be listed as the next revision.
Costing
If the product you are building consists of multiple components, each of these components must have its own inventory item record in Sage 50 Accounting. This is a necessary step for enabling costing functionality in ESC and Sage 50.
Once you have configured the bill of materials, you can begin tracking actual costs against your end products using the built items feature. The built item screen displays each of the component parts that are used to build your product along with a list of quantity required and available on hand. If the quantity on hand is less than the amount required, you can enter a purchase or inventory adjustment transaction to replenish the stock.
You can also track the cost of each of the individual component parts in a recursive build scenario. This is handled in a special tab within the product record for the end product. The tab provides a list of the component parts and a full costing breakdown that is rolled up through all BOM levels and visualised on an on-screen chart.
If you need more advanced inventory management functionality than Sage 50 Premium offers, consider a powerful solution like Cim50. It combines stock assembly and production accounting with advanced features such as trial kitting, maximum build calculators and work ticket processing. It also enables you to verify stock, calculate machine and labour overheads and accurately record built items.