Reverse BOM (Bill Of Materials)
What is reverse BOM? When do I need to reverse a Bill Of Materials? Can I reverse a BOM in ERP/MRP software solution?
In some types of manufactures, it is possible to separate the previously assembled (or received) final product into its constituent components. Such disassembled components may be used to build new products or sell them.
If materials or semi-finished products in the manufacturing process have changes (physical, chemical, etc.) that make it impossible to return them to their original state, then the “reverse BOM” will not be applicable. Example: if we have a pipe that is bent in the process, if we “disassemble” the product we will get a bent pipe, not the straight one that it was at the beginning. In these cases, the “bent pipe” goes to write-off or some additional processing (eg correcting if possible) if the bent pipe cannot be sold.
We will explain the reverse BOM in the simplest cases where the material can be “restored” to its original state.
We will take an example where a customer returned us a bicycle that we sold him.
2. Bill Of Materials example
Our “Bike Speedy” consists of several sub-components, while sub-components consist of different components.
We manufactured the item and sold it to our customers.
After that, we did a “customer return”, our finished product ‘appeared’ back in our stock.
3. Work order – reverse BOM
To reverse a BOM, we have to go through the “Standard – Work Order” option.
When you want to add the BOM based item in the Work Order manually, we have ‘reverse’ and ‘reverse (raw materials) options.
“Reverse” option will form only the first level, in case you have the multi-level BOM. In our example, that would be the sub-components.
The final product will now be in the Work Order as an input item, while the sub-components will be in the output items (as products). If you select this option, the sub-components will come back to stock, so if necessary, if you need to “disassemble” them again, you must re-do the work order. We can add the “Bill of materials” items indefinitely in one work order. If the same items exist, the quantities will be summed up.
Example of adding sub-components.
And our stock after the work order is completed will look like this:
5. Reverse (raw materials)
We use this option if we have a multi-level BOM that needs to be disassembled to component levels, and we are too lazy to form work orders separately for each level.
The components will be automatically summed up in the ‘output items’.
The result in our stock list would be the same as in our previous example.
2019. ERPAG Inc.