In the world of manufacturing management, the BOM (Bill of Materials) is likened to a factory's "recipe." To make a smartphone, a wooden table, or a batch of medicine, you absolutely must have a BOM that specifies exactly how many components or how many grams of chemicals are needed. However, in many SMEs, the BOM often only resides in the heads of shift leaders, or is loosely stored on outdated Excel files. The consequence? Just a 1% over-dispatch error scaled across millions of products will make billions of VND in profit "evaporate" annually. The Manufacturing module of Xbook ERP was born to turn the BOM into a sharp weapon for optimizing Cost of Goods Sold (COGS).

1. Multi-level BOM Structure

A complex product cannot merely have a flat list of materials. It is a combination of multiple Sub-assemblies. Real-world Example: To produce a Bicycle, you don't just dispatch "Wheels" and "Frames" from the warehouse. You have to manufacture the Wheels from "Rims," "Spokes," and "Tires." Xbook ERP supports creating Multi-level BOMs up to dozens of levels. When a Bicycle production order is placed, the system automatically breaks it down and orders Workshop A to make Wheels, Workshop B to make Frames, and Workshop C to perform final assembly. This breakdown helps the production manager precisely control every single screw at the lowest level.

2. Scrap & Wastage Rate Management

No machine operates at 100% efficiency. When cutting a steel plate to make a casing, you will inevitably discard the scrap edges. If Accounting doesn't factor this scrap into the COGS, you are selling at a loss without knowing it.

Xbook ERP allows setting a Scrap Rate directly in the BOM. For example: It takes 1.05 meters of fabric (5% wastage) to sew a 1-meter shirt.
When calculating costing, the system automatically adds this wastage cost to the finished product's COGS, ensuring financial reports always accurately reflect reality.

3. Flexible Version Control

The market constantly changes, and so do product designs. This week you use Screw Type A, but next week the supplier runs out, so you have to switch to Screw Type B. If you use Excel, updating thousands of files leads to catastrophic errors. With Xbook ERP:

The system manages BOMs via Version Control.
When R&D engineers change a component, they create BOM v2. The system keeps a history log for traceability. New production orders will automatically use BOM v2, while older ongoing orders retain BOM v1. There is never any confusion on the assembly line.

4. Automated Material Requirements Planning (MRP)

The ultimate value of an accurate BOM on Xbook ERP is its ability to automate procurement. Upon receiving an order to produce 50,000 chairs, the software "runs" the BOM through the MRP system. It automatically calculates:

Total required raw materials.
Minus the quantity already available in the warehouse.
Minus the quantity on the way (ordered but not yet received).
Result: It provides the exact quantity of Wood, Nails, and Paint that must be purchased immediately. The procurement team simply approves and sends the Purchase Order to the supplier. Conclusion Managing BOMs with Excel is like driving a race car blindfolded. By digitizing and integrating the Bill of Materials into the Xbook ERP system, manufacturing businesses will completely master their costs, eradicate waste, and build a solid foundation for scaling up factory operations.