The Bill of Materials — The Design Document for Every Product

In iVendNext Manufacturing, nothing gets made without a Bill of Materials. The BOM is the foundational document that defines exactly what goes into a finished good — every raw material, sub-assembly, and component, in the quantities required, through the operations that transform them, at the costs that will be rolled into the finished product's valuation. It is the single source of truth that connects product design to procurement, production planning, costing, and kit selling at the POS.

Every work order references a BOM. Every MRP calculation draws from BOMs. Every kit sold at the POS is backed by a BOM. Getting the BOM right is therefore the most important setup task in the entire manufacturing workflow.

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Single-Level vs. Multi-Level BOMs

A single-level BOM lists the direct raw materials needed to make a finished product. This is sufficient for simple products where all inputs are purchased items that go straight into production.

A multi-level BOM — also called a nested or exploded BOM — includes sub-assemblies that are themselves manufactured items with their own BOMs. For example, a packaged gift set might contain a candle (itself manufactured from wax, wick, and fragrance), a holder (manufactured from glass and metal fittings), and a box (purchased). The BOM for the gift set references the candle and holder as sub-assemblies, each with their own BOM underneath.

Multi-level BOMs allow iVendNext to calculate the full material requirement for a finished product all the way down to the lowest-level raw material. When a production plan is generated, the system can explode multi-level BOMs to identify every purchase that needs to be triggered, at every level of the assembly hierarchy.

BOM Costing

The BOM is not just a material list — it is a costing document. iVendNext calculates the cost of a finished good by rolling up the cost of every raw material and operation in the BOM. This gives you a standard cost for the finished good that can be compared against actual production costs to identify variances.

Raw material costs in the BOM can be sourced in three ways: from the item's valuation rate (the average or FIFO cost at which stock is currently held), from a price list (useful when you want to cost against a standard buying price), or from the last purchase rate. The method is configurable per BOM.

Multi-currency BOM costing is particularly useful for retailers who import key raw materials. You can cost a BOM in the supplier's currency — Japanese yen for imported components, euros for European ingredients — while the system automatically converts and posts all financial entries in the company's base currency. This means your cost calculations reflect the true import cost without requiring manual currency conversion.

Automatic BOM cost updates can be scheduled to run daily, refreshing the rolled-up cost of every BOM based on the latest purchase rates or valuation rates. This ensures that your standard costs, pricing calculations, and margin analysis always reflect current input costs rather than stale historical rates.

BOM Versioning and Amendment

Products change. Recipes are refined, suppliers change, materials are substituted. iVendNext handles this through BOM versioning — when a BOM needs to be updated, you cancel the current version, amend it, make the changes, and submit a new version. The system maintains the full history of every BOM version, so you can always see what changed, when, and why.

The BOM Comparison Tool makes this history actionable. Select any two versions of a BOM and the system displays a side-by-side comparison showing exactly which components were added, removed, or changed in quantity or cost. This is invaluable during supplier negotiations, reformulation projects, or cost reduction exercises.

When a sub-assembly BOM changes — for example, a component's specification is updated — the BOM Update Tool propagates that change across every parent BOM that references the sub-assembly. This eliminates the need to manually find and update every affected BOM, which in a large catalogue could mean hundreds of documents.

Secondary Items — Co-Products, By-Products, and Scrap

In process manufacturing, a single production run often yields more than one output. iVendNext handles this through the Secondary Items table in the BOM, which supports four output types:

Scrap is waste material produced during manufacturing that has minimal or no resale value. Scrap quantities can be estimated in the BOM so that expected scrap is factored into material requirements and costing. At the point of manufacture, actual scrap is posted to a designated scrap warehouse with correct valuation.

Co-Products are planned outputs produced alongside the primary finished good that have significant commercial value. A classic example is oil refining, where crude oil yields petrol, diesel, kerosene, and LPG simultaneously. Each co-product is valued by allocating a percentage of the total raw material cost to it.

By-Products are unplanned outputs that arise as a consequence of the manufacturing process. They may or may not have value, but they need to be accounted for in stock and financials.

Additional Finished Goods are planned, valuable outputs that are produced separately from leftover capacity or extra materials — similar to co-products but typically arising from a different stage of the process.

For each secondary item, you can specify both a process loss percentage (the proportion of the expected output that is lost during production) and a cost allocation percentage (what share of the raw material cost is attributed to that output). This gives finance an accurate picture of the true cost of every item that leaves the production floor.

BOM Management Tools

With hundreds or thousands of BOMs in a large retail operation, managing them efficiently requires dedicated tools. iVendNext provides three:

BOM Stock Analysis answers the question "Can we make this, and how many?" In detailed mode, enter a production target and the system shows which raw materials are in stock, which are short, and the cost to bridge the gap — with shortfalls highlighted in red. In summary mode, leave the target blank and the system calculates the maximum producible quantity based on current stock levels alone.

BOM Search allows you to find any BOM by the raw materials it contains. If a supplier notifies you of a quality issue with a specific ingredient, you can instantly identify every finished good that uses it — a critical capability for product recall management or substitution planning.

Kits — Manufacturing BOMs at the Point of Sale

One of the most commercially valuable applications of the BOM in a retail context is the Kit. A kit is a group of individually sellable items that are sold together as a single product — a formal office wear set comprising a shirt, trousers, tie, and cufflinks, for example, or a skincare starter kit containing a cleanser, toner, and moisturiser.

To create a kit in iVendNext, you create a BOM listing all the constituent items and their quantities, then create a new item for the kit itself and reference the BOM in the item master. That's the entire setup.

At the POS, when a cashier scans the kit item code, it appears on the transaction as a single line — one product, one price. The cashier does not see the individual constituents, the customer receipt shows the kit as a single item, and the transaction is clean and fast. Behind the scenes, however, iVendNext automatically deducts each constituent item from inventory at the point of sale, keeping stock levels accurate at the SKU level without any manual intervention.

This makes kits a powerful merchandising tool. Seasonal gift sets, bundled promotions, equipment packages, and curated product collections can all be set up as kits and sold seamlessly at the POS, with full inventory accuracy maintained throughout.

Summary

The Bill of Materials is the most important document in iVendNext Manufacturing. It defines product composition, drives costing, enables multi-level production planning, handles complex output scenarios through secondary items, and powers kit selling at the POS. Investing time in accurate, well-maintained BOMs pays dividends across every other part of the manufacturing workflow — from procurement to production to the point of sale.