Understand Your Product Structure Options in Dynamics AX 2012

Editor's Note: Join Dr. Scott Hamilton at Decisions Spring 2012 on June 18 at 9am EDT for the session Managing Food Products Manufacturing Using Dynamics AX 2012.

Product structure information is a key aspect of producing a manufactured item.  The product structure is typically called a bill of material (BOM) in the context of discrete manufacturing, and a formula in the context of process manufacturing.  These terminology differences have a special significance within Microsoft Dynamics AX 2012, since the production type assigned to a manufactured item (of BOM or Formula) impacts software functionality.  The terms BOM approach and formula approach will be used to differentiate the two approaches. 

This article focuses on process manufacturing scenarios, and how to choose between the BOM approach versus formula approach for modeling product structure.  Many scenarios can be modeled using either approach or a combination of the two approaches, so understanding the functional differences is key to making the right choice.   

The two approaches reflect the design history of Dynamics AX, which initially employed the BOM approach and subsequently added the formula approach.[1]  The formula approach supports additional functionality for addressing the requirements of process manufacturing, such as co/by-products, catch weight items, substitute ingredients and formula size considerations.  A combination of the two approaches can be used within one product structure, such as a BOM approach for a parent item and the formula approach for a manufactured component (and vice versa). 

In order to compare the two approaches, we'll start with an example product structure for a typical food product, and then cover the arguments for using each approach to model ...