Formula or BOM

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Posted on by EGrotberg

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Hi all

When should you use formula and when should you use BOM production?

What is for and against?

Thanks

Erik

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Komi Siabi 13,093 Most Valuable Professional on at

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Please, refer to

Bills of materials and formulas

Formulas, co-products, and by-products

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Adis 6,048 Super User 2025 Season 2 on at

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Hey,

The only question is, what kind of production do you have, discrete or process manufacturing.

Discrete manufacturing:

You are using items (purchased) and assemble them into other items or change them like in a molding process => in this case "BOM" is used

Process manufacturing:

You are mixing ingredients (powder, liquids etc) together. This is used in the food or pharmaceutical industry => in this case "Formula" is used.

Kind regards, Adis

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Drew Lencsak 411 on at

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This depends on use cases. Generally speaking, Formulas are designed for Process manufacturing and BOMs are designed for Discrete manufacturing. Most of the functionality offered with formulas to manage the consumption and handling of ingredients, liquids, and food and going through Batch production orders is not needed for discrete manufacturers using Production orders and BOMs.

Bills of materials and formulas - Supply Chain Management | Dynamics 365 | Microsoft Learn

However, in design and implementation, even discrete manufacturing companies would implement Formulas occasionally because they offered features and functionality such as Rework orders, and Plan groups for alternative/substitution planning and you could implement similarly to discrete without being required to use all of the Formula line, coproduct, byproduct, and other functionality and just take advantage of features you needed. However, a few months ago Microsoft introduced substitution related to BOMs as well so that disparity has been resolved:

Item substitution for formulas - Supply Chain Management | Dynamics 365 | Microsoft Learn

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