Reduce Manufacturing Cost by Identifying Lowest Cost Alt BOM
Developing a Lowest Cost Alt BOM Tool
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Every company needs help in identifying opportunities for direct material cost reduction. For a product, there can be several alternative bills of materials (Alt BOMs), which can have varied costs based on market conditions. In standard SAP, there is no report to identify the lowest cost BOM; the system may be using a high cost BOM when a lower cost alternative exists.
This article will explain an approach for developing a tool to find the lowest cost Alt BOM based on current cost, which can be used for production and help reduce direct material cost, a critical issue for companies facing current high inflation rates. You can analyze the historic and going forward analysis of the available Alt BOMs.
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