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Phantom Bills of Material in Microsoft Dynamics NAV

“Phantom” Bill of Material,manufacturing bill of material,engineering bom vs manufacturing bom and bill of materials manufacturing.

There are times when the engineering department will construct a Bill of Material for a functional part of a design, but in production the Bill of Material is never produced as a sub-assembly, but rather is built as part of the final assembly process. A Bill of Material used in this manner is called a Phantom Bill of Material.

Definition taken from the APICS Dictionary:

A bill-of-material coding and structuring technique used primarily for transient (non-stocked) subassemblies. A phantom bill of material represents an item that is physically built, but rarely stocked, before being used in the next step or level of manufacturing. This permits MRP logic to drive requirements straight through the phantom item to its components. This technique also facilitates the use of common bills of material for engineering and manufacturing. Phantom Bills of Material are also known as blow-throughs, transient bills of material or sometimes pseudo bill of material.

Most ERP systems require that a “Phantom Item” be created and a Phantom Bill of Material associated with that item. The Phantom Item is then placed in a Bill of Material. When MRP runs or a production order is created, the system “blows through” the Phantom Item and plans only for the components in that Phantom Bill of Material.

Dynamics NAV handles Phantom Bills of Material in a different (and what we think is a better) way.

If we look at a Bill of Material for a bicycle, we can see that there is a front and back wheel in the Bill of Material.

Phantom” Bill of Material, manufacturing bill of material,engineering bom vs manufacturing bom and bill of materials manufacturing

Figure 1 - Bill of Material for a bicycle includes a front and back wheel

Now, if we create a Production Order for a bicycle and take a look at the component list, we can see that the front and back wheel are required to produce the bicycle. The system assumes that the front and back wheels have been built up previously as sub-assemblies.

To set up a Phantom Bill of Material in Dynamics NAV, you select the option of “Production BOM” when you enter the line for the sub-assemblies.

Phantom” Bill of Material, manufacturing bill of material,engineering bom vs manufacturing bom and bill of materials manufacturing

Figure 2 – Setting up a Phantom Bill of Material

We have selected Production BOM for the type of line for both the front and back wheels.

Phantom” Bill of Material, manufacturing bill of material,engineering bom vs manufacturing bom and bill of materials manufacturing

Figure 3 – Front and back wheel sub-assemblies have been set to “Production BOM”

We refreshed the Production Order, and now when we look at the component lines, we see that the front and back wheel Bills of Material have “blown through” and we only see their components required. When the bicycle is produced, it won’t be using previously built up front and back wheel sub-assemblies, but will be built up as the bicycle is being built.

Phantom” Bill of Material, manufacturing bill of material,engineering bom vs manufacturing bom and bill of materials manufacturing

Figure 4 – Refreshing the Production Order shows the front and back wheel required components

A benefit of handling Phantoms this way is that it is not necessary to create “Phantom Items”. In Dynamics NAV, a Bill of Material can be stand-alone and not necessarily associated with a parent item.

This method also gives you the opportunity to run the factory lean by not building sub-assemblies ahead of time, but if the need occurs for a service replacement part be produced, it can be done without adding new and unnecessary items to the system.

To find out more about various Dynamics NAV costing topics, please contact ArcherPoint.

Read more "How To" blogs from ArcherPoint for practical advice on using Microsoft Dynamics NAV.

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