Skip to main content

Bill of Materials (BOM)

A Bill of Materials is the recipe for a finished product — the list of components (and how much of each) needed to make one unit. Operations uses it to raise work orders, reserve the right materials, consume stock as production runs, and roll the component costs up into the finished good's value. This page builds a real BOM for our 50 L HDPE Drum and follows it into a work order.

A bill of materials with components and quantities

What a BOM line holds​

A BOM belongs to a Finished Goods item and lists everything that goes into it. Each line carries:

ColumnMeaning
ComponentThe raw material, consumable, packaging or sub-assembly item used.
QuantityHow much of the component makes one finished unit.
UnitThe unit of measure for that quantity (Kg, Piece, Litre…).
Scrap %Expected wastage during production, added on top of the base quantity.
SourceWhere the component comes from — issued from stock, or supplied by the operator.

The requirement Raya plans and reserves is the quantity plus its scrap allowance, so a 3% scrap on 2.20 Kg reserves 2.266 Kg per drum built.

Worked example — the 50 L HDPE Drum recipe​

Open the 50 L HDPE Drum (a Finished Goods item) and go to its BOM tab, or Inventory → BOM → New. We add four components:

ComponentTypeQty / drumUoMScrap %Effective qtySource
HDPE Granules — Grade ARaw Material2.20Kg3%2.266 KgIssue from stock
Blue MasterbatchConsumable0.045Kg2%0.0459 KgIssue from stock
50 L Screw CapComponent1Pc1%1.010 PcIssue from stock
Drum LabelPackaging1Pc0.5%1.005 PcIssue from stock

Note that HDPE Granules is entered in Kg, an alternate UoM of its MT stock unit — Raya converts between them, so the drum recipe reads in kilograms while the granule ledger stays in tonnes.

How to fill it​

  1. On the drum's BOM tab, click ＋ Add component and pick HDPE Granules — Grade A.
  2. Enter Quantity 2.20 and Unit Kg — the amount that goes into a single drum.
  3. Set Scrap % 3 for the trim and purge loss at start-up. Raya shows the effective requirement 2.266 Kg beside the line.
  4. Set Source to Issue from stock (the default) so the material is drawn from the producing location's inventory.
  5. Repeat for the masterbatch, screw cap and label lines.
  6. Save. The drum can now be selected on a manufacturing work order.

:::tip Always express quantities per single unit Enter what goes into one finished drum. The work order scales the whole recipe by the number of units you plan to build — never pre-multiply the BOM yourself. :::

Cost roll-up​

Because each component carries a cost, Raya rolls the BOM up into a material cost per drum (scrap included):

HDPE Granules   2.266 Kg × ₹95.00/Kg  =  ₹215.27
Blue Masterbatch 0.0459 Kg × ₹450.00/Kg =  ₹20.66
50 L Screw Cap   1.010 Pc × ₹12.00     =  ₹12.12
Drum Label       1.005 Pc × ₹1.50      =   ₹1.51
                                        ----------
Material cost per drum                 ≈ ₹249.56

Add any routing / process cost (labour and machine time from the optional process steps) and overhead to reach the full standard cost. This rolled-up figure is what values the finished drum when it is produced — see Costing & Reports.

How work orders draw against a BOM​

When you raise a work order for, say, 1,000 drums at Vatva WH-1, Raya multiplies every BOM line (scrap included) by the build quantity:

ComponentPer drum (eff.)× 1,000Reserved from
HDPE Granules — Grade A2.266 Kg2,266 Kg = 2.266 MTVatva WH-1
Blue Masterbatch0.0459 Kg45.9 KgVatva WH-1
50 L Screw Cap1.010 Pc1,010 PcVatva WH-1
Drum Label1.005 Pc1,005 PcVatva WH-1
  1. On confirm, the required quantities are reserved (committed) at the producing location, reducing free-to-promise without yet moving stock.
  2. As production is recorded, components are consumed and finished drums added.

Each move writes to the stock ledger so the whole build is traceable:

Manufacturing Consumption  HDPE Granules  −2.266 MT   @ Vatva WH-1
Manufacturing Consumption  Blue Masterbatch −45.9 Kg   @ Vatva WH-1
Manufacturing Consumption  50 L Screw Cap  −1,010 Pc   @ Vatva WH-1
Manufacturing Consumption  Drum Label      −1,005 Pc   @ Vatva WH-1
Manufacturing Output       50 L HDPE Drum  +1,000 Pc   @ Vatva WH-1 (batch WO-1000)

:::caution Short components block the build If free-to-promise granules fall below the reserved 2.266 MT, the work order can't be fully issued. That is exactly why the granule reorder point is set at 40 MT — so a large drum run never stalls for want of polymer. Top up with a purchase receipt or a transfer from Odhav Depot first. :::

:::note Where the finished value comes from The Manufacturing Output line is valued at the rolled-up material cost (≈ ₹249.56 per drum) plus routing/overhead — not the drum's selling rate. Consuming the components and creating the drum keeps total inventory value conserved. :::