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Bills of materials: what they are and how they help in the production process

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One of the challenges faced by companies with a complex production process is the management of components with bills of materials. It is essential to have control of all the materials involved in production because if one of the parts fails, the product remains unfinished. And this situation would jeopardise the survival of any company, as it would not be able to meet two of the requirements demanded by the market: delivery of products on time and meeting quality standards.

For this reason, more and more companies are moving away from manual processes to solutions that allow them to manage, control and monitor every step of the production process in real time. One such solution is Microsoft Dynamics 365 for Finance and Operations, specially designed to help companies manage specific business functions, including bills of materials to keep track of the components needed to manufacture products.

The production process in the manufacture of articles

The production of products, also known as the product life cycle, is defined as the specific steps that are necessary to complete the manufacture of an item. The life cycle begins at the point of creating the production order and ends with a finished manufactured item ready for delivery to the customer or for another phase of production. Each step of the life cycle requires different types of information to complete the process. As each step is completed, the production status changes, so that the entire company has real-time information at its fingertips.

To start the production process it is necessary to know the components to be used, as well as their quantity. And throughout the manufacturing process it is essential to keep track of the materials needed at each stage, hence the importance of linking the bill of materials lines to a productive operation of your route, as we will see throughout this article.

What are bills of material?

Bills of materials refer to the raw materials, semi-finished products or ingredients that companies need to manufacture a product. A clear example is found in vehicle manufacturing: when a production order is generated for the car, all the components listed in the BOM must be consumed in order for the production to be carried out, without errors.

What the material lines are for

Las líneas de materiales tienen la función de seleccionar los componentes que se necesitan para la fabricación, así como la cantidad, en cada una de las fases de la producción. Otra de sus funciones es la de añadir instrucciones en cada paso, con el fin de reducir los errores. De esta manera, ante cualquier incidencia en el proceso de fabricación es posible localizar el paso donde se produjo el fallo.

How the bill of material line is linked to each operation in the route

In those bills of materials with a large number of components (or in those processes with a long duration) it is likely that these are consumed in different stages of the production process. For these cases, each bill of material line can be linked to a specific production operation within its route.

An example of a bill of material with three components is shown below:

lista de materiales microsoft dynamics 365

And its production route with three operations:

ruta dynamics 365 for finance and operations

We access the existing designer option in the product:

codigo articulo lineas de materiales dynamics 365

To link the component in the bill of material (on the left-hand side of the screen) to an operation in the route (on the right-hand side of the screen), you have to position on the component code and tick the “component required in” checkbox of the relevant operation:

código artículo listas de materiales

As an example, raw material 1 has been linked to operation 10:

vinculacion lineas materiales con dynamics 365

Raw material 2 has been linked to operation 20:

cómo vincular lineas materiales con dynamics 365

And finally, raw material 3 has been linked to operation 30:

vinculación líneas materiales proceso de producción

If we now look at the bill of materials of this product, the first line with raw material 1 its consumption is linked in operation 10:

lineas de materiales dynamics 365 finance and operations

The second line with raw material 2, its consumption is linked in operation 20:

vinculacion lineas materiales ejemplo practico

And the third line with raw material 3 its consumption is linked in operation 30:

If the operation is modified from this screen, this change will be reflected in the item designer. As an example, if I modify the operation to 20 in the third line (raw material 3):


The designer would be linked to this operation:

dynamics 365 finance and operations lineas de materiales

Microsoft Dynamics 365 for finance and operations

Microsoft Dynamics 365 Finance & Operations is a powerful ERP software equipped with the best artificial intelligence tools and specially designed to help manage the processes and resources of medium and large companies.

Its main functions:

  • Dynamics 365 Finance: centralises financial data in one place and enables sound decision making through advanced analytics.
  • Dynamics 365 Supply Chain Management: centralises the supply chain in one place. It also optimises planning, production, storage and other systems. This application improves production with intelligent applications, automates warehouse management and optimises purchasing processes.

Do you want to implement Microsoft Dynamics 365 in your company?
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At Emiral we know how much your company is worth, whether small, medium or large. That’s why we want to offer you the best ERP management solutions to keep your business growing.





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