Bill of Materials for Food & Beverage Manufacturers

A Bill of Materials is one of the most important tools in manufacturing. It outlines what goes into production, how much each component contributes to total cost, and how a product moves from raw materials to finished goods. Managing this information in Order Time keeps costs accurate, tracks materials in real time, and connects each stage of the production workflow so every step reflects the same Bill of Materials data. This overview explains what a Bill of Materials is and how Order Time’s inventory control and order management platform supports a connected production process.

Table of Contents

• What is a Bill of Materials?
• What is an Indented Bill of Materials?
• What Is The Difference Between Routes and Stages?
• How Order Time Connects Workflows
• Turn Your Bill of Materials into a Complete Production Workflow with Order Time
• Frequently Asked Questions

What is a Bill of Materials?

An important tool for manufacturers is the Bill of materials, also known as the BoM or recipe. The Bill of Materials is a listing of the raw materials and quantities of each needed to manufacture a finished product. It has multiple purposes, including:

• Pricing: A labor and overhead element can also be included in the Bill of Materials. By listing each raw material and the associated labor, you can derive a cost for your products. Then you can compare that to the market price to ensure you will be producing a profit!
• Production: The BoM is the basis for manufacturing the product. It is used for pick-sheets and routing. It can also be used for raw material backflushing.
• Backflushing: The Process of determining the number of parts that must be subtracted from inventory records. This number is computed by referring to the number of parts withdrawn from the inventory (and delivered to the shop-floor) and the number of parts assumed (according to the Bill of Materials) to have been consumed in a manufacturing line at one or more deduct points. - Business Dictionary
• Purchasing: The BoM is used to forecast the raw materials demand based on the quantity of finished products that need to be produced.

What is an Indented Bill of Materials?

The term indented Bill of Materials refers to a product that has multiple stages of production. The typical manufacturing process has at least one work-in-progress (WIP) stage and a packaging stage. At each stage, the product is inventoried which implies that a separate SKU or Item should be created for each stage. The indented Bill of Materials will show a hierarchical nature of a finished goods with the top level representing the finished product, which may be comprised of raw materials and work in progress. The following is an example of 2 stages in production:

• Batch: The raw ingredients are mixed, and one or more batches are created. Lot or batch #s are used to distinguish between batches made at different times. The Bill of Materials will contain the raw materials necessary to create the batch.
• Package: The batch will be combined with other raw materials to create the finished product. The Bill of Materials will contain the quantity of the batch necessary to create a unit of the finished product.

What Is The Difference Between Routes vs. Stages?

The route refers to a step in the production process to achieve a certain stage. For example, in producing the batch, there may be multiple steps, including pouring, mixing, cooking, and cooling. Understanding routes and stages is an important part of learning what a Bill of Materials supports inside the workflow.

You draw the line between a step and a stage by determining if you need to keep track of the inventory of work in progress (WIP). If you need to inventory WIP, then it should be a stage and it should have its own SKU and Bill of Materials. Otherwise, it should be a route or step.

How Order Time Connects Workflows 

Order Time fits directly into the Bill of Materials workflow. Once the BoM is defined, the system uses that information to support every part of production. It keeps data consistent, updates inventory in real time, and helps you move smoothly from raw materials to finished goods. OrderTime makes the entire workflow easier to manage by connecting each stage of production under one system.

Order Time helps you:

• Use Bill of Materials data to manage raw material ordering, work orders, and production steps
• Support nested or indented BoMs for multi-stage manufacturing
• Track inventory, lots, and batch numbers as materials move from WIP to finished goods
• Bring sales, purchasing, warehouse, and production together in one connected workflow

With the full workflow connected, manufacturers can use the Bill of Materials as a reliable foundation for consistent and predictable production.

Frequently Asked Questions