This chapter explains the role that outputs play within bills of manufacturing and how they are properly set up and used.
What are BOM outputs?
BOM outputs are the finished items derived from a bill of manufacturing. Each BOM has a primary output, which is the BOM parent, and can have multiple secondary outputs. Secondary outputs are used for these purposes:
Primary Output
This is the parent item that you are manufacturing and is the main driver of MRP Jobs. MRP only responds to the net demand associated with the primary output. When multiple outputs exist, it is imperative that you define the primary output as the Item ID that has the most sales/usage demand in the system.
Byproducts
A byproduct is one that is derived while producing the primary output. Usable scrap material, for example, is a byproduct from the virgin material that was incorporated into the BOM parent.
Co-Products
A co-product is made from a common BOM. A mold or tool, for example, may produce two separate items with each machine cycle.
Disassembled Items
If you disassemble used products, the parts that get disassembled from the parent item can be set up as secondary outputs.
NOTE: If the disassembled items are known in advance and are expected to be derived from each disassembly job, they should be defined as secondary outputs in the BOM. If disassembled items are not known in advance, however, and can only be determined during the course of each job, outputs can be added as needed to job details.
Cut Pieces
You may set up a BOM where you cut a purchased material piece into several cut pieces. For example you may purchase a 10 foot PVC pipe that you cut into a 5 foot, 3 foot, and 2 foot piece. Each cut piece will have a unique item ID. You would choose the piece with the most usage demand to be the primary and the other two pieces would be secondary outputs.
Knowledge Base - Handling Cut to Size Materials
How to create a secondary output
A secondary output must first be created as an M item and then given a bill of manufacturing assigned to the ‘Secondary’ BOM type. A ‘Secondary’ type BOM has a BOM parent with no revisions, routing, components, or outputs of its own. Once the ‘Secondary’ BOM has been created, the secondary output item can be added on the Outputs tab to all the BOMs where it is an output item.
Secondary outputs are not subject to MRP generation
Secondary outputs are not subject to MRP generation. MRP only responds to the net demand associated with the primary output. So if you have two co-products that share the same BOM, use the one with the greatest demand as the primary output (BOM parent).
This means that you may have to apply manual planning to some secondary outputs. For example, you may wish to attach a review note in the MRP Settings screen to the primary output item that reminds you to check demand for its secondary outputs so that you can increase the planned job quantity if needed.
Use the Cost Ratio to establish the secondary output cost
Use the Cost Ratio to give each secondary output a proportionate share of the total estimated cost within each BOM for which it is an output. There is no useful formula to help with this entry, so it is a judgment call as to what you feel is an appropriate percentage share of total cost.
If a secondary output is used in multiple BOMs, keep in mind that the cost basis for each BOM may likely differ. The secondary output’s estimated cost will be calculated based on whichever of its associated BOMs happens to be rolled up last. The secondary output’s receipt cost and inventory value will likely vary somewhat from job to job.
