There are many challenges faced by the small to medium sized enterprises as they try to keep track of the production process. Luckily, SAP Business One has provided a solution in which case the businesses can keep track of their inventory among other stage-by-stage processes that can be cumbersome. The availability of Bill of Materials (BOM) have contributed significantly to the ways in which enterprises manage, track, and record inventory across multiple warehouse locations, timely ordering and delivery as well as proper inventory accounting practices (Magal and Word, 2011).
Four categories of BOM can be realized using the SAP ERP. First, the production BOM that involves two essential divisions; the engineering division and the production division. A production Bill of Materials begins with a function planning exercise by the engineering unit followed by a production planning exercise by the production unit. It lists the finished products and its complements such that the complements are represented as child items of the finished (parent) item. Second, a sale BOM that refers to the finished product in a sales document. In this case, the parent item happens to be sales item while the children can be classified to be sub-items. Update operations are possible while the delete and add operations are not incorporated in this type (Ayyagari, 2011).
Further, an Assembly BOM has a similar representation as the sales BOM just that the Assembly BOM has no components as sub-items since only the finished products are represented in the sales document. Besides, the end product is not managed as an inventory item but a sales item just like in the case of Sales BOM. Finally, the template BOM refers to an open form of BOM that has no specific restrictions. It has no specific parent or child, and it’s so flexible that it can be used both as sales BOM and a production BOM. In addition, it offers room for deletion, update, and the addition of components (Ayyagari, 2011).
These four categories of SAP ERP are diverse to handle all types of business inventory, production, and accounting solutions. According to Magal and Word (2011), they have been the backbone of numerous small and midsized businesses offering its various solutions.
References
Ayyagari, R. (2011). Hands-on ERP Learning: Using OpenERP®, an Alternative to SAP®. Journal of Information Systems Education, 22(2), 123.
Magal, S. R., & Word, J. (2011). Integrated business processes with ERP systems. Wiley Publishing.
