Bill of Materials (BOM)

A Bill of Materials (BOM) is a document that defines all the raw materials, sub-assemblies, components, and manufacturing operations required to produce a finished product. It serves as the foundation of the Manufacturing module in ERPNext and is used to generate production-related documents such as Work Orders and Job Cards.

ERPNext supports multi-level BOMs, allowing manufacturers to create complex product structures where sub-assemblies can have their own BOMs. This provides complete visibility into the manufacturing process and ensures accurate material planning, production scheduling, and cost calculation.

Prerequisites

Before creating a Bill of Materials, it is recommended to configure the following masters in ERPNext:

• Item – The finished product and all raw materials should be created as Items.
• Operation – Define the manufacturing operations required during production.
• Workstation – Configure the machines or work centers where operations will be performed.
• Routing – Create predefined sequences of manufacturing operations, if required.

Accessing the Bill of Materials

To create or manage Bills of Materials, navigate to:

Home > Manufacturing > Bill of Materials > Bill of Materials

Creating a Bill of Materials

Follow these steps to create a new BOM:

1. Open the Bill of Materials list and click New.
2. Select the Item to be manufactured.
3. ERPNext automatically fetches the Item Name, Unit of Measure (UoM), Company, and Currency.
4. Enter the quantity of finished goods that will be produced.
5. Add all required raw materials in the Items table.
6. Specify the quantity required for each raw material.
7. Select the manufacturing operation associated with each item, if applicable.
8. If a raw material is itself a manufactured sub-assembly, ERPNext automatically fetches its default BOM.
9. Select the Source Warehouse for each material.
10. Enter the Scrap Percentage, if applicable.
11. If manufacturing generates scrap or by-products, configure them under the Secondary Items section.
12. Save and Submit the BOM.

BOM Materials

The Items table contains all raw materials and components required for manufacturing.

For every material, you can configure:

• Required Quantity
• Associated Manufacturing Operation
• Source Warehouse
• Scrap Percentage
• Default Sub-assembly BOM (if applicable)

Each material also includes the Include Item in Manufacturing option.

• Enable this option for materials that will be physically consumed during manufacturing.
• Disable it for service costs or operational expenses that should be included only for costing purposes.

Consume Components Based On

ERPNext can automatically consume raw materials when a Work Order is completed. The consumption method determines how the system calculates material usage.

Two consumption methods are available:

BOM

ERPNext consumes raw materials according to the quantities defined in the Bill of Materials, multiplied by the quantity of finished goods being produced.

Material Transferred for Manufacture

ERPNext consumes only the materials that have actually been transferred to the Work In Progress (WIP) Warehouse through Stock Entries.

BOM with Operations

Enable the With Operations option to include manufacturing operations in the BOM.

This allows ERPNext to calculate production costs more accurately by considering machine time, labor, and operational expenses.

For each operation, specify:

• Operation Name
• Workstation
• Operating Hourly Rate
• Operation Time
• Batch Size

ERPNext automatically calculates the operating cost based on these values.

You must also specify how materials should be transferred during production.

• Against Work Order – Transfer all materials together before production begins.
• Against Job Card – Transfer materials separately for each manufacturing operation.

Additional Options

Is Active

Enable this option if the BOM should be available for manufacturing. Disable it when using an alternative BOM.

Is Default

Marks the BOM as the default BOM for the selected Item.

Inspection Required

Requires Quality Inspections for both incoming raw materials and finished goods before production can proceed.

Allow Alternative Item

Allows substitute materials to be used when the original raw material is unavailable.

Allow Same Item Multiple Times

Permits adding the same item multiple times in situations where individual quantities or dimensions need to be maintained separately.

Set Rate of Sub-Assembly Item Based on BOM

Calculates the value of manufactured sub-assemblies using their BOM costs instead of the Item valuation rate.

Is Phantom BOM

Creates a logical grouping of materials without manufacturing an intermediate stock item. Phantom BOMs are automatically exploded during production.

Rate of Materials Based On

Material costs can be calculated using:

• Valuation Rate
• Last Purchase Rate
• Price List

BOM Costing

The Costing section estimates the total manufacturing cost of the finished product.

The calculation includes:

• Raw Material Costs
• Sub-assembly Costs
• Operation Costs

If costs change after the BOM has been submitted, click Update Cost to refresh the calculations using the latest prices.

Materials Required (Exploded)

The Exploded Materials section displays every raw material required to manufacture the finished product, including materials contained within sub-assemblies.

This provides complete visibility into the total material requirements for production.

Do Not Explode

Enable the Do Not Explode option when a manufactured sub-assembly is already available in stock and should not be broken down into its individual raw materials.

This is useful when certain sub-assemblies are produced separately and stocked before final assembly.

Project and Website

A BOM can be linked to a Project for tracking manufacturing progress, project costs, and engineer-to-order production.

It can also be published on the website for organizations manufacturing open-source hardware products.

BOM Template

BOM Templates allow manufacturers to create Bills of Materials for template items used in Item Variants.

Using BOM Templates:

• Create a common BOM for template Items.
• Generate Variant BOMs automatically.
• Select appropriate Item Variants during Work Order creation.
• Reduce duplication when manufacturing similar product variants.

After Submission

Once a BOM has been submitted, it becomes the foundation for manufacturing activities and can be used to create production documents such as:

• Work Orders
• Job Cards
• Production-related transactions within the Manufacturing module.

Business Benefits

• Standardizes manufacturing processes.
• Improves production planning and material management.
• Provides accurate manufacturing cost calculations.
• Supports complex multi-level product structures.
• Reduces manual effort through automated material consumption.
• Enables efficient production scheduling and inventory planning.

Key Summary

The Bill of Materials (BOM) is the core document of ERPNext’s Manufacturing module. It defines the complete structure of a product, including raw materials, sub-assemblies, and manufacturing operations. By supporting multi-level BOMs, automated costing, material planning, and production workflows, ERPNext helps manufacturers improve production accuracy, optimize inventory, and streamline the entire manufacturing process.