BOM - Bills

Inv. item Item Defining attribute. BOM allowed Status attribute for an item to have a
BOM.
Resources : Men, Material, Machine, Method and time.
Setup parameters :
Max bills = 60. Choose suitable config options.
Resource Groups : Setup Resource Groups.
Grouping of resources under a same name will facilitate capacity requirement / loading
of resources.
Department Classes : Setup Department Classes
Same as above.
Simulation Sets : Setup Simulation sets
Temporary additions / deletions of resources in a department to offset the excessive
loading of resources in a department by the planning process. Re-launch the planning
process by including the simulation set. If they are permanent, they should be corrected
in the resource availability of the concerned department.
Cost Elements : Matl, MOH, Resource, Overhead and Outside Processing.
Material Cost : Purchase price of an item. MOH : Freight Charges, Loading / unloading
charges, Stacking charges.
SUB-ELEMENTS :
Material Sub-Elements : Classify the item as Plastic, Steel or Aluminum. Determine the
basis type ( allocation charge method) and assign an appropriate amount. ( Preferable
one sub-element for material account) MOH Sub-Elements : Purchasing, duty, matl.
Handling, freight.
Basis Type :
Item : Fixed amount per item
Lot : Fixed lot charge to items or operations. Cost per item = Fixed cost / standard lot
size ( MTL and MOH SE).
Total Value : Used only with MOH.
Activity : Used with Matl and MOH only. MOH calculation is based on activity.
Activity occurrences = No of items = Activity rate
If snap shot is enabled an alternate bill is created. we can run the indented bill for the
alternate , even if the primary bill has changed.
Standard BOM : Contain mandatory components. Eg. Bills for manu assemblies, PTO
bills, kit bills and phantoms. Configuration bills is a set of options made from a model bill
which contains a buildable and sellable product. Create configuration bills from a SO or
manually.

Model BOM : Contains list of options and option classes. It specifies mandatory
components or included items that are required for configuration. A model bill can be
either ATO or PTO.
Option Class BOM : An Option class is an item that groups optional components on a
bill. This a level in Model BOM. Option classes can also have mandatory components.
Eg. In a computer model BOM, Monitor is an option class and the specific make monitor
you choose is an option within the option class and the monitor stand is a mandatory
component in the option class.
Planning BOM : It includes a percentage distribution of components. Cum % need not
be 100%. we can define alternate and common planning bills. MRP explodes level by
level and applies plg. % at each level.
Engineering BOM : This can be an alternate to the manu BOM. This is to prototype
variations from the primary BOM. Catalog descriptive elements can be specified in an
engineering bill. when they are released to manufacturing, Cat. Descriptive elements are
assigned values during configurations. Oracle Engg. can use both Engg and manu
items as components in an engg bill whereas BOM users can assign only BOM items in
a manu. Bill.
Phantoms : It is a non-stocked Sub assembly ( SA). we can define routings. we can
compute manu and cum lead times also. As a bill ( assembly) it behaves normally for
creation of a discrete Job. But WIP ignores phantoms and their routings during job or
rep. Schedule creation if it is a sub assembly.( Its components are only picked )
Substitute components : (N) Bills Bills. Query for the bill. Choose the component.
Press the button substitutes. Enter component and qty.
Assigning Reference Designators : They are sequenced comments and instructions that
pertain to a component. If qty related, the max ref designators is limited to the qty of
component.
Indented bills : displays all levels and displays item details, bill details, quantitiesd,
effectivity, order entry and shipping details.
Comparison of bills : The differences are compared and displayed.
Check for loops : (N) Bills Bills. Query your bill. Tools Check for loops. Identify the
level and put an end date to that level bill.
Assembly cost roll up : Aftet defining the bills and routings, the expected cost of
production can be found by rolling up. (N) Bills Bills . Tools Rollup Costs under a
cost type.
Alternate bills : First define the alternate name tag. And mention that in the alternate
field of the primary bill. Create it as a normal bill.
Bill Revision : (N) Bills Bills PB Revision button. You cannot define a revision for an
alternate bill.
Bill Copy : (N) Bills Bills Choose an item. Tools Copy from . Bills can be copied

across organisations also. Bills of same item type can only be copied. It is a single level
copy. Every level has to be copied separately. All components must also be assigned to
destination organization. While coping across org, the supply SI and locators are not
copied.
Common Bills : Two items of same bill type can share common bills and routings. We
can not reference a bill, if that bill also reference another bill. ( Nested reference is not
possible). A manu bill must refence only a manu bill. The alternate name has to match in
both the bills. If referenced across org, the referenced bill can only be viewed and not
altered from here. (N) Bills Bills Tools Assign Common Bill.
Effecting multiple changes : (N) Bills Mass Changes : Make changes for a set of
items.
Component Supply types :
Assembly Pull : On completion of assemblies, components are issued to discrete jobs
and rep. Sch. This is choosen for In-Process materials that is pulled from a floor stock
sub inventory. when we need raw materials from main Inv, we prefer Push supply type.
Based on Bill : It is WIP specific. Changes from Based on Bill to Assembly pull are
possible.
Bulk : They are not back flushed and do not default while issuing components for
assembly. eg. Nails, nuts, washers etc.
Operation Pull : Pull components are issued to discrete jobs and rep. Sch. when you
complete backflush operations. If an assembly has no routing, this supply type can not
be assigned. However if an assembly has a routing with no operation or all disabled
operations, this supply type can be applied. But they are automatically changed to
assembly pull. Normally for the In-process matl. From floor stock SI, will have supply
type of operation pull. If lead time is large, use push ( raw matl. from main SI to shop
floor)
Phantom : Phantom components can be assigned to BOM component SA. Phantom
behaves normally when master scheduled or manufactured on a DJ. As SA, they loose
their identity. Set Phantom lead time to zero to avoid lead time offset. when assembly
costs are rolled up the routing costs of Phantom SA are ignored for the higher level
assemblies.
Push : Push components are issued directly to DJ and Rep. Sch.
Supplier : This is for indicative purpose only and they are not transacted. For report
purpose.
Negative components : They are wastes and by-products generated from specific
operation. Perform Negative Component Issue by WIP transaction.eg. If the negative
component nc1 requires a qty 100 with supply SI as waste godown, when we complete
10 assemblies with operation pull, a total 1000 nc1 will be sent to waste Godown SI. The
reverse of this Negative component return which will have a positive qty.
A hybrid model will have both ATO and PTO models and option classes. Any number of
optional classes with an option class. If any of the options under an option class is

selected, the included item gets selected.

Optional = Yes
Optional = No

ME = Yes
Choose 0 or 1
Choose one and only one

ME = No
Choose none or any
Atleast one option

ME can be checked only for a ATO or PTO optional class.

If the basis is Option class, we cannot modify the extended order quantity.
If check ATP is checked in the item, its value is updatable in a bill. Otherwise not. ATP
components is set to yes for both model and Phantom items for calculating the items
with ATP check enabled below them.
Use common bills to assemble ATO models in other organizations. Normally create
common bills in IMO and reference them in individual organisations.
ATO items can be catalogued with descriptive elements concatenated with hypen
separation.
Parent BOM Type
Planning
Model
Option Class
Standard

Planni
ng

X
X
X

Component BOM Type

Model
Option Class
Standard

BOM - Routing
Cost Elements : Matl, MOH, Resource, Overhead and Outside Processing.
Material Cost : Purchase price of an item.
MOH : Freight Charges, Loading / unloading charges, Stacking charges.
Resource : Anything of value, except material and cash used to manufacture, schedule
or cost the product. Resources include Machine, machine operators, assemblers, labour
hired from a supplier, tools, physical space, etc
Overhead :
1. Resource Overhead : PF, Gratuity, Conveyance, paid holidays, subsidised food,
medical, cost of maintaining the resources.
2. Department Overhead : In-Process material carriers, sweepers, head workers, Air
Compressors, Air Conditioners.
3. Other Overheads : Traveling expenses, Postages, Telephone Bills, Insurance,
Brokarage, Working Capital Interest.
OSP : Expense incurred due to outside processing of an assembly / item.

SUB-ELEMENTS :
Material Sub-Elements : Classify the item as Plastic, Steel or Aluminum. Determine the
basis type ( allocation charge method) and assign an appropriate amount. ( Preferable
one sub-element for material account)
MOH Sub-Elements : Purchasing, duty, matl. Handling, freight.
Resource Sub_Elements : Each resource is a SE. They can be charged at standard
costs and may generate variance.
OH SE : They are usually production OH. They are applied in the routing. Based on no.
of units or lot moved through operation or based on Resource units or value charged in
operation.
OSP : Service provided by the suppliers. Each OSP is a SE. Charged at actual or
standard costs. May generate variances.
Activities : An action or task you perform that uses a resource or incurs cost. Associate
product costs to activities. Define activities and assign them to any sub-element. we can
also assign costs to your activities and build your item costs based on activities. This is
called activity based costing.
Basis Type :
Item : Fixed amount per item
Lot : Fixed lot charge to items or operations. Cost per item = Fixed cost / standard lot
size ( MTL and MOH SE). For routing : Fixed cost / Standard Lot size moved thro
operation associated with resource, OSP or OH SE.
Resource Value : Associated only with OH SE. Resource value earned in the operation
= OH rate.
OH amount = OH rate * Value
Resource Units : Associated only with OH SE. Resource units earned in the operation =
OH Rate.
OH amount = OH rate * Value.
Optionally use Resource units and resource value to earn MOH when you complete
units from a job or rep. Schedule.
Total Value : Used only with MOH.
Activity : Used with Matl and MOH only. MOH calculation is based on activity.
Activity occurrences = No of items = Activity rate
Standard Operations : (N) Routings Standard Operations.
CP , AC and backflush can be ON
Usage rate : Time taken to complete one assembly.
Scheduling = Yes. Offset = 50% means that this resource will be used only when the
operation is half completed.
Primary Routing : A list of operations most frequently performed to complete the
operation. One primary and many alternate routings can exist. One operation can repeat
with diff. seq. number. Primary routing must be defined first and later all alternate
routings. ( Define the alternate routing name under setup-alternates and mention that

alternate name in the Alternate name field of the primary routing. All operations thus
defined belong to the alternate routing)
Copying Routings :
(N) Routings Routings Choose Item A02. Tools Copy routing Choose Item A01
and copy.
It can be copied across organisations.
Assign Common routings : Tools Assign common routing. The routings can not be
made common across organizations. Changes in original will reflect in the referenced
routings also.
Assembly cost roll up : Aftet defining the bills and routings, the expected cost of
production can be found by rolling up. (N) Bills Bills . Tools Rollup Costs under a
cost type.
Alternate bills : First define the alternate name tag. And mention that in the alternate
field of the primary bill. Create it as a normal bill.
Bill Revision : (N) Bills Bills PB Revision button. You cannot define a revision for an
alternate bill.
Bill Copy : (N) Bills Bills Choose an item. Tools Copy from . Bills can be copied
across organisations also. Bills of same item type can only be copied. It is a single level
copy. Every level has to be copied separately. All components must also be assigned to
destination organization. While coping across org, the supply SI and locators are not
copied.
Common Bills : Two items of same bill type can share common bills and routings. We
can not reference a bill, if that bill also reference another bill. ( Nested reference is not
possible). A manu bill must refence only a manu bill. The alternate name has to match in
both the bills. If referenced across org, the referenced bill can only be viewed and not
altered from here. (N) Bills Bills Tools Assign Common Bill.
Use common bills to assemble ATO models in other organizations. Normally create
common bills in IMO and reference them in individual organisations.
If op. seq 25 for 486 processor of the bill is not selected, its corresponding routing op.
seq. step 25 will not be charged.
We can inherit the op. seq. from their parent option class or model if BOM : Inherit
option class operation seq no. = Yes. All items below the parent will have a op. seq. of 1
meaning that it inherited its parent op. seq.
ATO items can be catalogued with descriptive elements concatenated with hypen
separation.
Scheduled ship date is offsetted by the lead time [ Fixed lead time = quantity X variable
lead time ] and the expected release date for all ATO model items is assigned to sales
orders. Auto create configuration items with release offset days = 10, will create
configuration items for sales orders whose work orders must be released within 10 days.
ATO item numbering can be in one of three ways 1) Seq. no. 2) Order no / line no 3)

Model no with seq no.

The model and option class will appear in the configured item as phantom components,
only for consuming forecast and for consuming master schedules.
If option dependent is set to NO, that routing will be included for scheduling and costing
even though the bill component is not opted. A single level cost roll up for the configured
item is performed to establish accurate costs. All components cost, their routing costs
plus material OH are summed up. The manu and cum. Lead time is also calculated for
the options choosen.
Fixed resource cost in two ways :
Method
Res. Type
UOM

Resource
unit cost

Res. Rate /
amount in
routing

Fixed Resource
cost = Res. Unit
cost in res. X
Res. Amount in
routing
1 X 15 = 15

Fixed
Currency
USD
1
Amount = 15
charge on
the routing
Fixed
Labour
Hour
20
Rate = 1
20 X 1 = 20
Charge for
the
resource
Since currency cannot be scheduled in a OSP operation, enter another uncosted
resource in the operation for scheduling.
Configuration of bills :

1. Define model and option class bills for Order Entry, MRP, WIP and Costing.
2. Forecast demand for Model & Option Class ( Explode forecast through planning
bill, model and / or option class.
3. Master schedule ATO Models and Options.
4. Enter sales order for ATO Models and options.
5. Check ATP for component availability.
6. Auto Create configured items. ( Bills & Routings).
7. Auto Create final assembly orders ( Discrete jobs). Reserve WIP job to Sales
Order.
8. Complete final assembly and convert WIP res. To Inv. Res.
9. Pick Release all configured sales orders for which WIP jobs are completed.
10.De-activate auto generated configuration items whose orders are x days old.

Routing Exercise :
Tea Manufacturing Process :
Two purchased materials water and tea powder, in a pre-defined proportion, is
boiled together in a boiler by a cook to form a product called black tea. The
prepared black tea is filled in suitable containers and temporary stocked in a

subinventory floor stock.

The black tea undergoes an operation called filtering by which another product
called filtered black tea is formed. A cook does the filtering operation using a
filter. The filter black tea is filled in suitable containers and temporarily stocked in
the same subinventory called floor stock.
Another purchased material, Milk, is boiled in a Milk Boiler to form a product
called Boiled Milk. This operation is also done by a cook. The two earlier
manufactured products, Boiled Milk and Filtered Black Tea, and a purchased
material, Sugar, are mixed and subsequently tested to form the final product
called tea. The operation of mixing is done by a cook and the Testing is done by
an inspector. The tea after testing is transferred to the finished goods
subinventory called FGI.
This organization, which works three shifts in a day with half an hour break in
each shift, has three departments called Cooking, Filtering and Mixing. All the
Cooks belong to the cooking department. The cooks required for the filtering and
mixing operations are borrowed from the cooking department. The filters are
owned by the filtering department. The inspector belong to the Mixing
department.
A bye-product named used tea powder is generated from the operation filtering.
This bye-product is transferred to a subinventory called Waste Godown.
-------------------------------------

METHODOLOGY OF PREPARATION OF BOM :

Levels of Manufacturing Process :
Level 1 :
Operation : Testing
Operation : Mixing

Res : Inspector
Res : Cook
Components : 1) Filtered Black Tea. 2) Boiled Milk.
3) Sugar

Level 2 :
Operation : Filtering.
Black Tea.
Operation : Milk Boiling
Component : Milk.
Level 3
Operation : Black Tea Boiling.

Res : Filter, Res : Cook,

Res : Cook, Res : Milk Boiler
Res : Boiler, Cook
Components : Water, Tea Powder.

Create and assign the following items :

S.No
1.
2.

Item Code
T001
T002

Item Description
Water
Chain Tea

UOM
Liter
Kg

Item Type
Purchased
Purchased

Component :

3.
4.
5.
6.
7.
8.
9.
10.

T003
T004
T005
T006
T007
T008
T009
T010

Tata Tea
Milk
Sugar
Black Tea
Filtered Black Tea
Used Tea Powder
Boiled Milk
Tea

Kg
Liter
Kg
Liter
Liter
Liter
Liter
Liter

Purchased
Purchased
Purchased
Sub Assembly
Sub Assembly
Sub Assembly
Sub Assembly
Finished Good

Make Sub Inventories : Chain Stores, Floor Stock, Chain FGI and Waste Godown.
Make three departments Cooking, Filtering and Mixing.
Prepare resource details for Water Boiler, Cook, Filter, Milk Boiler and Inspector with
suitable hourly rate in three shift working and the total nos. of available resources.
Mentioned the borrowed resources. Make charge type as WIP Move.
Define standard operations for the following :
1. Black Tea Boiling : Water Boiler and cook resources for 30 minutes. Cook is not
scheduled.
2. Filtering : Filter and cook resources for 15 min. Cook not scheduled.
3. Milk Boiling : Milk Boiler and cook resources for half an hour. Cook not scheduled.
4. Mixing : Cook resouce for 15 minutes. Scheduled.
5. Testing : Inspector resouce for 15 min. Scheduled.
Prepare the primary routings for the Sub assemblies for items Black tea, Filtered Black
tea and Boiled milk with operation sequences 10 on every routing . Prepare the routing
for the finished good Tea with op. seq. 10 for Mixing operation and 20 for testing
operation. Black tea, Filtered Black Tea and Boiled milk will be kept at Floor stock SI as
completion SI. Tea will be sent to Chain FGI.
Prepare the component details for all the above 4 routings as follows :
1. For Black Tea use Water 1 Litre and Chain Tea 0.1 kg from Stores.
2. For filtered black tea use Black Tea 1 Litre from Floor stock. Mention a negative
component of 0.1 kg of Used Black tea to be returned to Waste Godown.
3. For Boiled Milk , use milk of 1 litre from stores.
4. For tea use the Filtered Tea(0.5 kg) ,Boiled Milk (0.5 kg) and a purchased item
Sugar(0.2 kg).
5. All items from stores will have a supply type of Push and all items from Floor stock
will have a supply type of Assembly Pull.
Answers :
Resource details :
No
.
1.
2.
3.
4.
5.

Resouce

Type

UOM

Machine
Person
Machine
Machine

Charge
Type
WIP Move
WIP Move
WIP Move
WIP Move

Boiler
Cook
Filter
Milk
Boiler
Inspector

Shifts

Dept.

Nos.

Hr
Hr
Hr
Hr

Rate /
Hr
5
10
2
6

3
3
3
3

Boiling
Boiling
Filtering
Boiling

10
15
5
10

Person

WIP Move

Hr

15

Mixing

Standard Operations :
No.
1.

Operation
BTB

Description
Black Tea Boiling

2.

FILT

Filtering

3.

MB

Milk Boiling

4.
5.

MIX
TEST

Mixing
Tea Testing

Resources
Water Boiler
Cook
Filter
Cook
Milk Boiler
Cook
Cook
Inspector

Usage Rate
0.5
0.5
0.25
0.25
0.5
0.5
0.25
0.25

Schedule
Yes
No
Yes
No
Yes
No
Yes
Yes

Primary Routings :
No.
1.
2.
3.
4.

Item
T006
T007
T009
T010

Item Description
Black Tea
Filtered Black Tea
Boiled Milk
Tea

Operations
BTB
FILT
MB
MIX

Completion SI
Floor Stock
Floor Stock
Floor Stock

TEST
Component Details :
S. Component Description UOM
Qty
No
Bill Item : T006 ( Black Tea) UOM : Liter
1.
T001
Water
Liter
1

Yield

Supply SI

Supply Type

Push

2.

Chain
Stores
Chain
Stores
Floor Stock
Waste
Godown

Ass. Pull
Push

Chain
Stores

Push

T002

Chain Tea

Kg

0.1

Bill Item : T007 ( Filtered Black Tea) UOM : Liter

1.
T006
Black Tea
Liter
1
1
2.
T008
Used Tea
Kg
-0.1 1
Powder
Bill Item : T009 ( Boiled Milk) UOM : Liter
1.
T004
Milk
Liter
1
1
Bill Item : T010 ( Tea) UOM : Liter
1.
T007
Filtered
Liter
Black Tea
2.
T009
Boiled Milk
Liter
3.
T005
Sugar
Kg

Push

0.5

Floor Stock

Ass. Pull

0.5
0.2

1
1

Floor Stock
Chain
Stores

Ass. Pull
Push