Bill of Material - Essay Example

Bill of Material Bill of Materials In light of the changing business environments, organizations are embracing technological integration into their operations to minimize costs and maximize profits. Therefore, resource planning tops the list of core business aspects that needs close monitoring to drive the companies toward achieving profitability goals. A technological platform such as Enterprise Resource Planning (ERP) is in use in most organizations to help in resource planning. One component of the ERP is the Bill of Materials (BOM) software.

Technology and software application companies such as Microsoft Inc. and SAP Inc. design the BOM for many enterprises depending on the nature and ERP needs of the enterprise in question. Technology companies have to make the BOM application user-friendly so that the management may find ease and efficiency when using it.BOM is merely a list of the components required to build a product by detailing and providing the manufacturer's part number and the amount of quantity needed for a particular component.

For example, Microsoft deals with the production of computer hardware, which typically consists of different parts. The company, therefore, uses the BOM to track the components needed to complete single computer hardware. That enables the company to track the production cost per unit head. Similarly, SAP is a computer technology and hardware company that assembles computer hardware parts to supply to their clients. Consequently, SAP uses the BOM to track the cost of particular parts needed for the completion of a single product design.

Additionally, SAP management can use the information generated to manage its stock and plan for deliveries from suppliers on time. The policies concerning stock control effectiveness are easily monitored through BOMIn general, BOM benefits Microsoft Dynamics and Systems, Applications, and Products (SAP) in many ways. Some of the benefits include; facilitating and the location of items. Hence, it saves time spent. Additionally, the software identifies the changes that materials have undergone with respect to a particular time.

The rules that govern the use of materials can be useful using BOM. Lastly, BOM software, gives reports of the full audit of the material usage, all the approvals made during requisition of materials, and all the costing involved (Hua & He, 2010).