1.2.SAP Bill of Materials (BOM) - Free SAP PP Training

5/8/2018 SAP Bill of Materials (BOM) - Free SAP PP Training
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SAP Bill of Materials (BOM)
Written by Velmurugan Saravanavelu and last updated on April 30, 2017.
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Welcome to the tutorial about SAP Bill of Materials (BOM)

in SAP PP. This tutorial is part of our free SAP PP Training
course. In this tutorial, we will explain what is BOM in SAP,
how to create it, meaning of various fields in BOM master
data, and how to change existing bills of materials.
SAP bill of materials (BOM) is one of the elements of SAP

PP master data which contains information like list of
components and their quantities required to produce an
assembly or a finished good (FG). In SAP, different BOM categories are available which
are used in different applications or functional areas of an organization.
Bill of Material Application Used
Material BOM Production Planning
Equipment BOM Plant Maintenance
Functional Location BOM Plant Maintenance

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Order BOM Sales and Distribution
WBS BOM Project System
Role of SAP Bill of Materials (BOM) in SAP PP
In SAP production planning, SAP bill of materials (BOM) is used for the following functions:
1. Material Requirement Planning (MRP)

2. Product costing
3. Material Consumption
Usage of BOM in MRP
MRP uses BOM to calculate required raw materials or semi-finished goods (SFG) or
components quantity for customer demand of finished materials.
MRP performs ‘Net Requirement Calculation’ at all the level of BOM by exploding it to
determine the shortage quantity.
Usage of BOM in Costing
During finished good (FG) product costing, the SAP system performs costing of its
component by exploding BOM.
Product costing comprise of raw material, activity and overhead costs. Here, raw
material price is maintained in a material master and its required quantity for a particular
FG is maintained in BOM.
During product costing, the SAP system multiplies quantity in BOM with material master
price to determine its cost against the particular FG.
Usage of BOM in Production Consumption
When production order is created for an assembly or FG, its BOM components are
copied to the order.
At the time of goods issue against order, the system posts the consumption based on
this BOM components in an order.
Technical Types of SAP Bills of Materials
There are 3 different types of BOM that are used in SAP PP:
1. Simple BOM
2. Multiple or Alternate BOM (technical type ‘M’)
3. Variant BOM (technical type ‘V’)
Simple Bill of Material
A Simple Bill of Materials
Alternate or Multiple BOM
An Alternate Bill of Materials
Here, the end product is same but its components are different.
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Variant BOM
A Variant SAP Bill of Materials
Here, the end products are different but having common or similar parts like frame,
saddles, etc. and a variant part.
What is BOM Explosion?
BOM explosion means break down of an assembly from a higher level to components in
lower levels. The SAP system breaks down the assembly by means of its lower level
codes. Lower level codes will be assigned by the system automatically when an item is
linked with the BOM. When one material is appearing in several assembly BOM at different
levels, the system represents the lowest low level code.
BOM Explosion
We can display the lower level code of a material in a material master (transaction MM03)
(additional data menu item or by clicking button).
Low-Level Code in a Material Master
How to Create SAP Bill of Materials?
SAP Bill of Materials can be created by accessing the transaction code mentioned below
Transaction Code Description
CS01 Create Material BOM
or by navigating to the following menu path:

Create an SAP Bill of Materials Transaction in SAP Menu
Create SAP Bill of Materials – Initial Screen
A material master must exist for all assemblies and components before creating a BOM.
Here BOM Usage controls application or business function that can use this Bill of
Materials.
For example, BOM of a product in a design phase will have the usage ‘2’ which cannot
be used for production purposes.
Different Values of BOM Usage Parameter
In component overview, the SAP system shows all the components required to produce the
assembly (for base quantity).
SAP Bill of Materials Header Data (Base Quantity)
Overview of Components of SAP Bill of Materials
SAP Bill of Materials (BOM) Structure
Each BOM has a unique structure which is applicable for all BOM types as illustrated
below.
SAP Bill of Materials Structure
BOM Header
BOM header contains below information:
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BOM NUMBER
This number is assigned internally by the system. System uses this for linking with
transaction data and other PP applications like MRP, production order, etc.
A LT E R N AT E B O M
This field represents an alternate BOM if more than one BOM exists for the material.
TECHNICAL TYPE
This field tells which technical types the BOM belongs to.
When we create a BOM for an assembly, the SAP system creates Alternate ‘1’ with
technical type “ “ (Blank).
When we create a BOM the second time for the same assembly, it creates Alternate ‘2’
and changes technical types as “M”
For products that have common similar parts, BOM will be created as a Variant BOM
(Technical types ‘V’)
B O M BA S E Q UA N T I T Y
This is the quantity for which component quantity will be entered. This base quantity will be
used in BOM explosion at the time of MRP and costing.
BOM Items
I T E M C AT E G O RY
Each BOM components is assigned an item category which classify the BOM items. Here
are the possible item categories for BOMs:
Item can be kept in stock. The SAP system

Stock Item generates reservation at the time of order
creation.
Item cannot be kept in stock, may be

procured directly at the time of
Non-Stock Item consumption. The SAP system generates
PR or Planned order at the time of Order
creation.
Variable Size Item Different sized materials are assigned with

this item category. Required quantity is

calculated based on Sizes and Formula
entered.
This item category will be used only for

PM Structure Item
Plant maintenance BOM.
Temporary material which exist between 2

Intra Material operations/phases. Commonly used in
Process Industry.
Document (design, drawing, photos, etc.)

can be assigned to the BOM as an item
Document Item
using this Item category. A valid document
master record is required for this.
A text required for shop floor paper can be

Text Item
maintained here.
This item category is used for configurable

Class Item
material to classify the materials.
Basic Data in BOM Items
F I X E D I N D I C AT O R
When component quantity is not based on an assembly quantity and always consumed in
fixed amount, this indicator can be used.
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Example:
Catalyst used for a chemical process is always fixed without respect to quantity of FG
produced.
COMPONENT SCRAP
Scrap that occurs when a component is converted into a final assembly is called
‘Component Scrap’. Component scrap can occur by means of any one of the following:
Losses during storage

Losses during delivery from a vendor
Losses during transportation to production facilities
Component scrap can also be entered in BOM as well as in a material master. Component
scrap maintained in a material master is applicable for all BOM products. When different
component scrap percentage is required for particular product, it can be maintained in
BOM.
Example:
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Let’s say 1 PC of Assembly A1 requires 2 PC of Raw material R1 which has 20%

component scrap in Bill of Materials. Assume that there is no stock available for A1 and
R1. When demand of 500 PCs is received for an assembly, MRP calculates requirement
quantity as follows:
Example – Component Scrap
O P E R AT I O N S C R A P W I T H N E T I N D I C AT O R
Here, the system will only consider the operation scrap percentage entered here and not
include assembly scrap (if any) entered in the MRP-1 view of a material master.
Example:
Let say requirement quantity of R1 and R2 is 100 PCs.
Example – Operation Scrap with Net Indicator
G E N E R A L DATA
General Data of BOM Component
Co-Product Indicator is activated if more than one finished product is produced in a

production process.
Material which are defined as co-product will be entered with (negative sign). This
means, that a particular material will be considered as “Output Material” along with the
header material.
Material entered with a negative sign but no co-product indicator is activated will be
consider as a “By-product”.
RECURSIVE ALLOWED
When the same material is as a header material as well as BOM item, the BOM is called
“Recursive BOM”. This case frequently happens in Process industry as well as
Pharmaceutical industry. For instance, consider an example below:
In foundry process, liquid metal is produced by melting charge materials like ion, brass,
etc. They are melted and poured into a mold to form a casting.
During the melting process unconsumed liquid metal also consumed in every cycle.
Liquid metal (Unconsumed) + Charge Material (Ion, Brass etc.) under High Temperature
-> Liquid metal
Here input and output materials are the same which cause recursion in BOM. It leads to
the situation when BOM will be exploded indefinitely without stopping.
By setting the indicator recursive allowed at BOM item level BOM explosion will be
stopped.
A LT E R N AT E I T E M G R O U P
We can group to gather all alternate items using Alternate Item Group. Alternate Item
Group uses 3 keys to determine the alternative material:
Usage Probability
Priority
Strategy
MRP uses Usage Probability and Priority to create dependent requirements. Production
order also creates reservations based on Usage Probability. But consumption is based on
Strategy defined in the alternate item group.
This can be explained with the following example:
Let say a company manufactures a car where different brands of tires are used to fit in the
car. Depending upon availability, a suitable tire will be used by the system. Let’s say
requirement for a tire (based on car requirement) is 1000 PC and below settings were
maintained in BOM items for an Alternate Items Tire Brand A, Tire Brand B, and Tire Brand
C.
Example – Alternate Item Group
Alternate Item Strategy
D I S C O N T I N U AT I O N I T E M
Discontinuation material is a material which is replaced by its follow-up material. We can

maintain a discontinuation material in SAP material master as well as in SAP bill of
materials. Bill of materials setting override material master record setting. MRP will transfer
the dependent requirement to follow-up material if discontinued component is no longer in
stock or has insufficient stock.
The following conditions must be fulfilled for discontinuation:
Conditions for Discontinuation
There are certain cases where we cannot activate discontinuation logic:
1. We cannot activate discontinuation logic for Alternate Items.

2. Co-products cannot be discontinuation items.
3. Non-stock items cannot be discontinuation items.
SORT STRING
Based on Sort String, the SAP system will sort the component’s display in report and PP
transactions.
S TAT U S / L O N G T E X T
Status/Long text in a Component of SAP Bill of Materials
P R O D U C T I O N R E L E VA N T I N D I C AT O R
This Indicator will be activated by default for BOM usage ‘1’ and ‘3’.
If this indicator is activated, the item is relevant for material planning and production
orders.
For items which you want to use only for costing purposes but not for planning and
production orders uses like bulk materials, this indicator can be deactivated.
E N G I N E E R I N G / D E S I G N I N D I C AT O R
This Indicator will be activated by default for BOM usage ‘2’.

Usage of this BOM in other application like costing, production is optional.
P L A N T M A I N T E N A N C E I N D I C AT O R
Item that is relevant for Plant Maintenance will be set by default for usage ‘4’.
S PA R E PA R T I N D I C AT O R
It is generally used in Plant Maintenance (equipment BOM) which can be assigned to

the equipment operations.
C O S T I N G R E L E VA N C Y
Item relevancy for costing is decided by this Indicator.

On deselecting this Indicator, Particular BOM Item will be excluded from Costing but not
relevant for Production/Planning.
M AT E R I A L P R OV I S I O N I N D I C AT O R
This Indicator controls relevancy for MRP. Generally, it is used for subcontracting materials.
If subcontracting components are provided by the production plant, no need to activate

this indicator. So that MRP generates dependent requirement for the components.
If components are not provided by the production plant and are already available at a
vendor’s location, activate this indicator. So that MRP will not plan or generate
dependent requirements.
B U L K M AT E R I A L
Material which are available directly at the machine location(s) like grease, washers can be
defined as bulk materials. For bulk materials:
Item will not be relevant for costing.

Dependent requirement will not be generated by MRP.
There will not be any production storage location for this item to issue store from, as it is
directly available at Machine/Work center location.
Replenishment is based on consumption based planning.
If a Material is used as a bulk material for all products, we can set it in its material
master (MRP2 view).
If it is used for some products and not for every product, we can set it at BOM item level.
P R O D U C T I O N S T O R A G E L O C AT I O N
Location from which raw materials /components are consumed for production. On release
of a production order, a warehouse person will issue the material from the warehouse to a
production storage location. Production storage location in BOM item has a higher priority
than the location in a material master (MRP2 view).
Production Storage Location in SAP Bill of Materials
S U P P LY A R E A
Supply area can be defined in any of the master data elements mentioned below:
1. SAP Work center

2. SAP Bill of Materials
3. SAP Material Master
Selection or determination of a Supply area is also performed in the same order. Supply
area is assigned with a storage location. Supply area is used in the following scenarios:
1. KANBAN
2. Warehouse Management
How to Change SAP Bill of Material?
The transaction CS02 is used to change an existing SAP Bill of Materials. We can also
change many BOMs at the same time using the transaction CS20. This transaction
enables us to:
Replace items in all BOMs

Change item data like quantity, etc.
Did you like this tutorial? Have any questions or comments? We would love to hear your
feedback in the comments section below. It’d be a big help for us, and hopefully it’s
something we can address for you in improvement of our free SAP PP tutorials.
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0 0
15 thoughts on “SAP Bill of Materials (BOM)”
Puneet
March 28, 2017 at 8:01 pm
How to do addition for a new material in number of FG materials collectively where

reference material is also not present
Cleo Isco
March 29, 2017 at 2:22 am
You need to use a different transaction for this purpose: CS20 and/or CEWB. I hope that
we will make another tutorial on this topic in the future. Thank you for the question!
prasad
May 11, 2017 at 8:35 am
I am SAP FICO consultant and learning this PP training material. Such a wonderful one. I
received upto lesson 1.5. I didnt receive after that. Pls continue and i dont want to lose this
opportunity. Thanks – Prasad
Jerry Hardman
August 30, 2017 at 5:54 pm
Wonderful training – thanks for putting this together and making it available.
BZ
October 5, 2017 at 6:48 pm
Does anyone know a SAP transaction where if I have a raw material code, I can find all the
finished goods the raw material is contained in? So for example, I input the Saddles item
code, and the results give me Bicycle Model A, Bicycle Model B, and Bicycle Model C.
Thanks!
Cleo Isco
Have you tried transaction CS15?
BZ
Awesome, that works. Thank you!
Michael Cave
I’m analysing consumption (MB51), and I’m trying to work out if a particular consumption is
assigned to a BOM. How do I do this?
Cleo Isco
I don’t think you can see it from MB51.
Tirivanhu
October 31, 2017 at 12:43 pm
Hallow I am a Zimbabwean resident so is there any company in Zimbabwe where I can get
access to SAP practice
Dirk Burger
November 3, 2017 at 8:35 pm
Try Zimbabwe Dairy Board – I implemented it SAP-PP there back in the late nineties.
They will be using SAP.
As far as training goes, I think you will need to attend training at SAP in South Africa.
MP
Is there any way to add alternative “production storage location” – (psl). I’ve got material
that is on two different storage location. For me it would be greate if there will be 0 on stock
at psl A, and then system is loking for stock at psl B.
Velmurugan Saravanavelu 
Hello ,
We can define only default storage location in BOM item level . For determining stock
based on some rule we need to define “Stock determination group” in customization where
you can maintain it for a plant and enter in which sequence you want to determine the
storage locations. This stock determination group need to be assigned with Material master
MRP2 View.
Regards,
Velmurugan S
MP
Thank You for such quick reply. Do You have any manual to do “Stock determination
group”?
Vignesh Veerasamy
December 20, 2017 at 12:01 pm
Sir,
Pl let know how to map single child with multiple header in Engineer change number in
SAP.
Vignesh V
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Home » SAP PP » SAP PP Training » SAP Bill of Materials (BOM)

SAP Bill of Materials (BOM)

Written by Velmurugan Saravanavelu and last updated on April 30, 2017.

Welcome to the tutorial about SAP Bill of Materials (BOM)

SAP bill of materials (BOM) is one of the elements of SAP

Bill of Material Application Used

Material BOM Production Planning

Equipment BOM Plant Maintenance

Functional Location BOM Plant Maintenance

Order BOM Sales and Distribution

WBS BOM Project System

Role of SAP Bill of Materials (BOM) in SAP PP

1. Material Requirement Planning (MRP)

Usage of BOM in MRP

Usage of BOM in Costing

Usage of BOM in Production Consumption

Technical Types of SAP Bills of Materials

Simple Bill of Material

A Simple Bill of Materials

Alternate or Multiple BOM

An Alternate Bill of Materials

A Variant SAP Bill of Materials

What is BOM Explosion?

Low-Level Code in a Material Master

How to Create SAP Bill of Materials?

Transaction Code Description

CS01 Create Material BOM

or by navigating to the following menu path:

Create an SAP Bill of Materials Transaction in SAP Menu

Create SAP Bill of Materials – Initial Screen

Different Values of BOM Usage Parameter

SAP Bill of Materials Header Data (Base Quantity)

Overview of Components of SAP Bill of Materials

SAP Bill of Materials (BOM) Structure

SAP Bill of Materials Structure

BOM header contains below information:

Item can be kept in stock. The SAP system

Item cannot be kept in stock, may be

Variable Size Item Different sized materials are assigned with

this item category. Required quantity is

This item category will be used only for

Temporary material which exist between 2

Document (design, drawing, photos, etc.)

A text required for shop floor paper can be

This item category is used for configurable

Basic Data in BOM Items

Losses during storage

Let’s say 1 PC of Assembly A1 requires 2 PC of Raw material R1 which has 20%

Example – Component Scrap

Let say requirement quantity of R1 and R2 is 100 PCs.

Example – Operation Scrap with Net Indicator

General Data of BOM Component

Co-Product Indicator is activated if more than one finished product is produced in a

This can be explained with the following example:

Example – Alternate Item Group

Alternate Item Strategy

Discontinuation material is a material which is replaced by its follow-up material. We can

The following conditions must be fulfilled for discontinuation: