A bill of materials (BOM) is a structured list of all the components, sub-assemblies, raw materials and quantities required to manufacture or assemble a finished product. Think of it as a recipe for a product. In Microsoft Dynamics 365 Business Central, bills of materials are the foundation of manufacturing and assembly planning. They drive MRP calculations, production orders, cost of goods calculations and picking lists.
How bills of materials work in Business Central
Business Central supports two BOM types. Production BOMs are for items manufactured through work centres using a routing. Assembly BOMs are for items assembled from components without a formal production process. Each BOM lists components with quantities per finished unit and can be multi-level, with sub-components having their own BOMs. When an order is raised, Business Central uses the BOM to calculate component requirements, generate picking lists and calculate the standard cost of the finished item.
Bill of materials in practice
- A manufacturer maintains 800 BOMs in Business Central, each versioned so engineering changes are tracked and historical production costs can be reviewed.
- A kitting business uses assembly BOMs to bundle components into sales kits, with the system automatically exploding the BOM on sales orders to reserve the correct component stock.
- A food manufacturer uses multi-level BOMs to track ingredients through sub-recipes into finished products, supporting both production planning and allergen traceability.
- A business uses BOM cost explosion to calculate the standard cost of each finished product, feeding accurate gross margin data into management accounts.
How Advantage sets up bills of materials in Business Central
Accurate BOMs are the foundation of reliable manufacturing ERP. Advantage works with production and engineering teams to review, clean and import BOM data as part of every manufacturing implementation. We also set up version control and change management processes to maintain accuracy over time.
Frequently asked questions
What is the difference between a production BOM and an assembly BOM?
A production BOM is for items manufactured through a formal production process with routing through work centres. An assembly BOM is simpler, listing components for items assembled without a production order, such as kits or bundled products. Business Central supports both.
How does Business Central handle BOM version control?
Business Central allows multiple BOM versions with effective dates. Engineering changes can be prepared and activated on a future date without disrupting current production.
What is a phantom BOM?
A phantom BOM represents a sub-assembly that is always consumed immediately in the parent assembly rather than stocked as an intermediate item. Business Central supports phantom BOMs, which simplify planning while maintaining accurate component requirements.
