SAP PP Bill of Material (BOM)

A BOM (Bill of materials) deals with list of the raw materials, parts, components and quantities of each that are required for product manufacturing.

In simple words, the BOM is a complete list of items needed in order to build a product. A bill of material may be referred as a product structure and assembly component list.

A BOM is helpful to companies in the following aspects –

  • In plan purchases of raw materials
  • To estimate the material costs
  • To gain inventory control
  • To track and plan material requirements
  • To maintain accurate records
  • To ensure supply robustness and reduce waste

BOM structure –

A BOM has a clear structure: at the top you have the BOM header, and below it you have BOM items (and sometimes sub-items). The header holds data that applies to the entire BOM, such as the header material (finished product), plant, BOM usage (e.g., usage 1 = production), base quantity, status, and validity dates. SAP help explains that header data is valid for the whole BOM and all its components.

Each BOM item represents one component, like a raw material or subassembly. Item data includes component material number, quantity, item category (stock item, non-stock, text item, etc.), and sometimes scrap, backflush indicators, and more. SAP’s documentation notes that the item overview lists the individual components needed to manufacture the product and that component quantities refer to the base quantity in the header.

BOM Common Methods –

Below are the common methods of representing a BOM –

  • Single-level bill of materials –

    A single-level BOM is basically a straightforward list of all the components required to build a product. In this type of structure, every assembly or sub-assembly appears only once, along with the exact quantity needed to produce the final material.

    While this format is simple and easy to create, it doesn’t work well for complex products. The main reason is that it does not clearly show the relationships between parent items and their child components, nor does it explain how assemblies and sub-assemblies connect to each other.

    Because of this limitation, troubleshooting becomes harder. If a finished product fails, a single-level BOM doesn’t help you quickly trace where the issue occurred or which specific component needs repair or replacement.
  • Multilevel bill of materials –

    A multi-level BOM takes a little more time to create, but it gives a much clearer and more detailed picture of the entire product structure. It shows every parent item along with its child components, as well as how assemblies and sub-assemblies are connected.

    In this type of BOM, the total required quantity of each material is clearly defined. The product structure is displayed in a hierarchical way, making it easy to understand how each level contributes to the final product.

    Because of this, a multi-level BOM offers better visibility and control, especially for complex materials where understanding parent–child relationships is essential.

BOM Types –

SAP Help lists several BOM categories you can use:

  • Material BOM – used in PP to describe the components required to manufacture or assemble a material (finished or semi-finished). This is your main BOM type in SAP PP.
  • Equipment BOM – attached to a specific piece of equipment, used mainly in Plant Maintenance (PM) to show spare parts or components for that equipment.
  • Functional Location BOM – attached to a technical location (like a plant section or machine location) in PM, used for maintenance planning.
  • Document BOM – BOM referenced by a document (CAD, drawing, spec), often in engineering contexts.
  • WBS / Order BOM – BOM structures linked to projects (WBS elements) or orders (like sales order BOMs or order BOMs for special builds).

BOM Role in SAP PP –

In SAP PP, the bill of materials is used for –

  • Material Requirement Planning (MRP)
  • Product costing
  • Material Consumption

Usage of BOM –

Usage of BOM in MRP –
  • A BOM is useful in MRP for calculating required raw materials or semi-finished goods and quantity of components for customer demand of finished materials.
  • MRP executes the Net Requirement Calculation at all level of BOM by exploding it to get the shortage quantity.
Usage of BOM in Costing –
  • While finished good product costing, a SAP system conducts costing of its component by exploding bill of materials.
  • A product costing includes raw material, activity and overhead costs. In this the raw material price is maintained in material master and its quantity needed for a specific finished good is maintained in BOM.
  • In product costing process, an SAP system multiplies the quantity in BOM with price of material master to get the cost against the specific finished good.
Usage of BOM in Production Consumption –
  • When a production order is created for an assembly or finished good, its bill of materials items are copied to order.
  • In case of goods issue against order, the system will posts the consumption depending on the BOM components specified in an order.

What is BOM Explosion? –

A BOM explosion means breaking an assembly down from its higher-level structure into all the components that exist at the lower levels. In SAP, when you explode a BOM, the system automatically displays each assembly along with all its underlying parts based on their low-level codes.

These low-level codes are assigned by the system as soon as a material is included in any BOM. They help SAP understand the position of each item in the product hierarchy. If the same material appears in multiple assemblies across different levels, SAP automatically assigns the lowest possible low-level code, ensuring that planning and processing run efficiently.