What it means
A BOM is a product’s recipe. It drives three things: what to buy (raw material needs for planned output), what to issue to the shop floor, and what a unit costs. A BOM can be multi-level: a chair’s BOM uses a “seat assembly”, which has its own BOM. Operations (cutting, assembly, polishing) with time and workstation add labour and overhead cost.
Example
A Mysuru furniture unit’s BOM for one teak chair:
| Component | Qty | Rate | Cost |
|---|---|---|---|
| Teak leg | 4 | ₹350 | ₹1,400 |
| Seat assembly (own BOM) | 1 | ₹900 | ₹900 |
| Screws | 0.2 kg | ₹400/kg | ₹80 |
| Polish | 0.25 litre | ₹480/litre | ₹120 |
| Assembly and polishing | 2 hours | ₹150/hour | ₹300 |
| Cost per chair | ₹2,800 |
An order for 200 chairs needs 800 legs, 200 seat assemblies and 40 kg of screws.
Common mistakes
- Leaving out scrap and process loss, so material always runs short.
- Changing a BOM in place for one order instead of making a new version.
- Using last year’s rates, so the cost rolled up is out of date.
In MyRecords
Bills of materials hold items, quantities, operations, by-products and scrap, and cost, with sub-assemblies having their own BOMs. Build a multi-level BOM makes a product’s BOM and its sub-assemblies’ in one go, and BOM explorer shows the tree with the cost of every level. To change a submitted BOM, make a New version and Make default. A work order created from a BOM lists the required items and quantities on save. When moving from Tally, BOMs come in as drafts to check; that import has been tested on Tally’s own sample export only.