Understanding BOM in SAP SD

Introduction to BOM in SAP SD

Let’s start with a simple analogy. Imagine you're at a coffee shop ordering a cappuccino. What you're really getting is a combination of ingredients—espresso, steamed milk, and foam. In SAP SD, this kind of grouping is handled through something called a Bill of Materials (BOM).

BOM in SD (Sales and Distribution) refers to a structured list of components that make up a finished product. Instead of manually entering each item into a sales order, the BOM allows for automation and better control, particularly in product bundling, kits, or configure-to-order scenarios.

Prerequisites for Working with BOMs in SD

Before diving into BOM configuration, there are a few things you need in place.

First, make sure material master records are maintained. This means both the finished product (the BOM item) and its individual components need to exist in the system.

Second, the correct item category groups must be set in the material master. The two most common ones used in BOM processing in SD are:

  • ERLA – Structure is treated as a single item.
  • LUMF – Structure is exploded into components at the time of sales order processing.

Item Category Group & Item Category Basics

SAP uses item category groups and item categories to control how sales items behave.

Here's a breakdown:

  • ERLA is used when pricing applies to the finished good (header), and the components are informational.
  • LUMF is used when pricing applies to the components (sub-items), not the header.
The default item categories typically used are:
  • NORM – Standard item
  • TAQ – Used for ERLA, relevant for pricing at header level
  • TAP – Used for LUMF, not relevant for pricing
  • TAN – Standard item, relevant for pricing
  • TAE – Not relevant for pricing (used for components under ERLA)

Creating a BOM in SAP SD

Creating a BOM is straightforward if you follow the correct transaction path.

Here’s how:
Path: Logistics → Sales and Distribution → Master Data → Products → Bills of Material → Material BOM → Create (Transaction code: CS01)

You’ll need to input:

  • Material: The finished product (BOM header)
  • Plant: Where it’s manufactured or sold from
  • BOM Usage: Choose “5” for SD
  • Alternative BOM: Used when there are multiple configurations
On the overview screen, you can add the components and specify their quantities. These components are typically stock or non-stock items, labeled with indicators like L (stock) or N (non-stock).

Once saved, SAP will use this BOM to determine sub-items automatically during sales order creation.

How BOMs Behave in Sales Documents

Now, here’s where things get cool.

Let’s say you’re creating a sales order and you input the finished product (the BOM item). Depending on the configuration, SAP will automatically explode this into its components.

For example:

  • If the item category group is ERLA, the system shows only the finished product in the invoice and delivery documents.
  • If it’s LUMF, the components will be listed and delivered/priced individually.

Customizing BOM Explosion in Sales Documents

For BOMs to explode properly in sales documents, you need to tweak a few settings in customizing (SPRO).
If you’re using:
  • ERLA, the item category is TAQ
  • LUMF, the item category is TAP
Both need to have the structure scope set to “A”, which tells SAP to explode the BOM at a single level.

Why only single-level? Because in SD, we usually care about what we’re selling and delivering directly—not every bolt or screw that goes into a part.

Pricing Logic in BOMs

Let’s dig into pricing, because this is where many people trip up.

ERLA – Pricing at Header Level

  • The BOM item is priced (TAQ – relevant for pricing)
  • Components are not priced (TAE – not relevant for pricing)

LUMF – Pricing at Component Level

  • The BOM item is not priced (TAP – not relevant for pricing)
  • Components are priced (TAN – relevant for pricing)
This behavior is critical when quoting customers. You need to know whether you’re charging for the kit as a whole or each part separately.

Item Categories Explained by Use Case

Here’s how it usually plays out:

ERLA – You’re selling a complete product like a washing machine. The customer sees and pays for the product, not its internal components.
LUMF – You’re offering a bundle like a home office kit. The customer gets a table, chair, and lamp, and sees them listed and priced individually.

Common Pricing Scenarios and How SAP Handles Them

Sometimes, you want the BOM item to appear on the sales document but not influence pricing. That’s where statistical values (X or Y) come in. You can mark TAP items as statistical so they show up for reference but don’t mess with totals.

This is handy when:

  • You need visibility on bundled items
  • You want to exclude packaging or promotional items from price calculations

Displaying Alternative BOMs in Sales Documents

You might have several configurations for a single finished product. Maybe one includes a premium cable, another doesn’t.

To allow for manual selection of alternative BOMs during sales order creation, make sure the “Manual Alternative” checkbox is activated in the BOM item category.

This gives sales reps flexibility to choose the right variant on the fly.

BOM Item Category Determination Logic

Here’s a quick summary table for reference:
 
Sales Doc Type Item Category Group Usage HL Item Category Default Item Category
OR ERLA – – TAQ
OR NORM – TAQ TAE
OR LUMF – – TAP
OR NORM – TAP TAN
OR NORM – – TAN
OR NORM – TAE TAE
OR NORM – TAN TAE

Goto:
SAP SD Pricing

Goto:
Billing / Shipping

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SAP SD (Sales and Distribution) Configuration Hints and Tips

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