This blog article aims to introduce the concept of bill of materials (BOM) and manufacturing within the Sage 200 Evolution application and how this functionality can be effectively used to streamline the manufacturing process within an organisation.
Within an economy the manufacturing sector plays a vital role. The process of converting raw materials into a finished product is the basis upon which many organisations are established.
The BOM Manufacturing concept consists of three elements within the Sage 200 application viz. Bill of Materials, Manufacturing Process and Work in Progress. To gain an understanding of each concept let’s take a detailed look at the role each concept plays in the manufacturing environment.
Bill of Materials
The Bill of Material (BOM) is the starting point in a manufacturing process and is often referred to as the manufacturing recipe. The BOM specifies the item to be manufactured and the ingredients/ raw materials required to produce the finished item. For example when manufacturing a tennis racquet the BOM would look something like this:
Manufacturing Item: Series 429 Senior Racquet with Blue Trim
Components: Graphite Frame Size Nine (1 Unit)
Handle Grip White ( 1 Unit)
Plastic Stopper Grey ( 1 Unit)
Blue Trim decals (4 Units)
Racquet String White ( 2,1 metres)
Series 429 Branding Stickers ( 1 Unit Standard Pack)
So there we have it. The item to be manufactured and the required components/ materials and quantities to create the finished item ie . A Series 429 Senior Racquet with Blue Trim.
At this point within Sage 200 Evolution the BOM is created whereby the manufactured item is specified and the components required to complete the process are defined. When creating the BOM further information about the finished item and components can be specified. User Defined Fields can also be linked to individual BOMs should additional information be required.
The manufacturing process is the physical activity that occurs resulting in the components/raw materials being processed/ converted into the finished product. In the above example the components are assembled/processed/ refined to create the completed tennis racquet.
After creating the BOM within the Sage 200 Evolution database the manufacturing process can be created. The manufacturing process specifies the item to be manufactured and the quantity to be manufactured. Each manufacturing process is allocated reference a number for identification purposes. On the manufacturing process a start date, manufacture lead time and projected completion date can be specified which is useful for production planning. The line items on a manufacturing process are based on actions. Each line item is processed via an action. The available manufacturing actions are the following:
- Draw Inventory: This process is used to allocated materials onto a manufacturing process. Materials can be drawn individually or automatically via an auto draw option.
- Auto Return: This option allows for items which have previously been drawn on a manufacturing process to be returned to stock.
- Manufacture Inventory: This procedure performs the actual manufacturing process.
- Sub Manufacture: In some instances an existing BOM forms part of the manufacturing process. This process enables the manufacture of the sub assembly within the main BOM.
- Return Inventory: This process returns any unused materials into stock once the manufacturing process is completed.
- Waste Item: During a manufacturing process, materials could be damaged or deemed to be unusable, in these instances the ‘Waste Item’ action can be used.
- Create a By-Product: Some manufacturing processes can lead to a by product being created. This action is used to specify the by product which was created during the process.
- Replace Item: During a manufacture process an alternate product might be required to be used due to the unavailability of the original product. For these scenarios the ‘Replace Item’ action can be used to substitute one item for another.
- Un-Manufacture: This action is a break-up of a BOM. The components are returned into stock and the quantity of the manufactured item is reduced.
- Variance In: This action brings materials into the manufacturing process and adjusts the cost price.
- Variance Out: This action removes materials from the manufacturing process at the item cost price.
- Over and Under Manufacturing: This action allows for either the increase or decrease in the quantity of the manufactured items without impacting the items that have been drawn on the manufacture process.
Work in Progress
As the name implies, work in progress refers to an activity which has been started but is yet to be completed. In many instances a manufacturing activity may occur over a lengthy period of time so the manufacturing process is referred to as a work in progress. It is important for an organisation to be aware of manufacturing processes which are deemed to be work in progress for various reasons. These include adequate planning, ensuring that sufficient raw materials and labour resources are available to complete the process and that the process will be completed within the required time frame amongst others.
A work in progress report within the BOM module allows for a detailed analysis of manufacturing processes which are still in progress.
Other BOM Manufacturing Functionality
Other functionality within the BOM module in Sage 200 Evolution include the following:
Mass Replace: This process enables one item to be replaced by an alternative item across multiple BOMs.
Update Costs: This function lets you synchronise costs between the bill of materials file and the inventory item file, and lets you calculate top-level costs on a bill of materials.
Bill Breakup: This process is a reverse of the manufacturing process. Items are disassembled using the BOM structure.
There are a variety of reports available within the BOM module which include the following:
- BOM Explosion Report: This report displays details of each BOM
- BOM Implosion Where Used Report: This report shows the BOM where a specific item is used
- Manufacture Order Report: This report displays sales orders, showing manufacturing requirements
- Manufacture Process Report: This report shows details of manufacturing processes
- Material Requirements Planning Report: This report is useful for manufacturing planning. The report shows details of the components required to complete manufacturing processes based on a specified manufacturing quantity.
- Work in Progress Report: This report displays manufacturing processes which are still in progress
Click here for a video presentation on the Sage 200 Evolution YouTube channel on ‘How to create a Bill of Material’.