Supports three types of bills of material :production bill of material, sales bill of material, and assembly bill of material.

Production Bill of Material

Describes a finished product made up of different quantities of different components. During a production process, the components are turned into the finished product. The production process could be a manufacturing, assembly, packaging, or other sort of process. Components can be physical items (such as a screw or a wooden board) or virtual objects (such as one hour's work).

Sales Bill of Material

Describes a finished product that is assembled and is about to be sold. The difference between an assembly bill of material and a sales bill of material is that only the finished product appears as a single item in the sales order for an assembly bill of material, whereas both the finished product and the components appear as separate items in the sales order for a sales bill of material.

When displaying a Sales BOM in documents, the user can choose whether to display price and total for parent item only or to display prices of child items as well.

Assembly Bill of Material

An assembly bill of material describes a finished product that is assembled and is about to be sold.

For example, the finished product could be a set of garden furniture. The finished product is not stored as an entire set in the warehouse. However, the individual components of the set (garden chairs, tables, and parasols, for example) are all items that are kept in stock. If a customer buys a set of garden furniture, the various components are put together to make a set, and the set is sold to the customer.

The difference between an assembly bill of material and a sales bill of material is that only the finished product appears as a single item in the sales order for an assembly bill of material, whereas both the finished product and the components appear as separate items in the sales order for a sales bill of material.

SAP Business One supports three types of production orders.

Standard production order is based on the bill of material and is used to produce a regular production item. It manages material transactions of the regular production process. In addition, users can change components at the production stage. When a new standard production order is opened, all the components are filled automatically. 

Special production order is used to produce and repair items, or to perform activities that are not necessarily bill of material items, for example, repair orders for customer equipment cards, or repair orders for rejected assemblies. Special production orders handle components manually.

Disassembly production order is used to disassemble a parent item of a regular product to its components. The product is disassembled into separate parts, which can then be put into stock and sold. For example, users can purchase a used car, take it apart, and sell the individual components. 

It is possible to change the planned quantity of components in production orders of all types after the production order is added. In addition, it is now possible to print only the production orders that have not yet been printed.

The user is able to create, maintain, run, and save MRP scenarios, analyze MRP results.

Users can display the list of all MRP recommendations before the release, according to user defined selection criteria. The report shows which items have to be purchased and which items have to be manufactured.

In addition, the report runs in accordance with the results of the MRP recommendations. It enables users to automatically create production and purchase orders. Users can also change quantities and items, and delete the recommendations.  

Supports drop shipment, or stockless retailing, which allows companies to sell products without carrying any inventory. Instead, companies send incoming orders to distributors that hold the inventory. The distributors supply the order to the customer, while the drop-ship company receives a commission from every sale.

Enables users to define a drop-ship warehouse in order to use the drop-ship method. Automatically adds a purchase order when users create an order for items defined with a drop-ship warehouse. SAP Business One will not calculate stock postings for this warehouse.

Enables companies which import goods, to calculate the cost prices of the imported items allocating customs, transport and insurance fees, taxes and other landed costs to the original price of the imported items.

Supports purchase order (PO) splitting. This allows a single PO to be split into multiple parts where items need to be shipped to multiple warehouses. The split or revisions are required so that unique packing slips and delivery notes can be created for each shipment.

Enables users segregate warehouses by geographic locations.

Helps to track items, such as medications, using their batch numbers. The batch number can provide additional information such as an item's manufacturing date, warranty data, and so on.

The user enters the batch numbers during stock entries for items that have a definition of batch numbers management. Then the user chooses the relevant batch numbers for stock transfer and release documents.  

Users can transfer stock from one warehouse to another. A stock transfer can also be carried out as a consignment for a customer. The items are then stored in the customer's warehouse and are sold from there.

Enable users to record goods receipts and issues that are not directly related to a sales or purchasing document.

Enables companies to keep track of items released for picking and manage item status and actual quantities. Use the Pick & Pack Manager to:

• Create Pick Lists based on the contents of Sales Orders and/or AR Reserve Invoices
• Print Pick Lists to be used by the picker when actually picking the goods in the warehouse
• Copy the partially/fully picked contents of the Pick Lists into a Delivery Note, which functions as the Pack document in the system.

In addition, you can specify packaging related information. 

The Pick & Pack process supports also bill of materials items of assembly and sales types.

Users can create a list of items that can be suggested to the customer as alternatives if the required item is not available. Substitutes can be ranked on the basis of similarity of item, price, and/or quantity.

The application enables companies to run a perpetual inventory system, which reflects the value of stock postings in terms of monetary transactions in the accounting system. These monetary transactions are carried out only when items defined as warehouse items are received or released from stock.

SAP Business One supports the following valuation methods: standard price, moving average, and FIFO. The default valuation method for new items can be defined in the company level and/or in the item group level. Users can assign to each item the relevant valuation method.

Although it is not recommended from the accounting perspective, SAP Business One 2005 tolerates situations of negative inventory and performs the required adjustments to ensure accurate calculation of inventory values. This can be relevant only when using moving average and FIFO valuation methods.