According to APICS Dictionary, a phantom bill of material (or simply phantom bill) is a bill of material that is physical built, but rarely or never stocked, before being used in the next step of manufacturing.
This means that we have a bill of material that we never build so we can put it into inventory. Instead we build it and immediately use in the manufacturing process.
Unlike many other ERP systems, NAV doesn’t require you to create and associate an item with a phantom bill if we never plan to stock the sub-assembly. Instead we can just use the phantom bill straight into other bill of materials.
Let’s take a look at an example:
Notice how the front and back wheels have a type of Production BOM instead of Item? That’s because the wheels are phantom bills and won’t be stocked in inventory, but only created when a bicycle is manufactured. So when a production order see a phantom bill it will explode the bill and use the components on the bill instead or the bill itself.
So what if we later found out we needed to stock some wheels for future use or as replacement items for our customers? In that case we just need to have the wheels created as items and associate each of them with a BOM. Below see how that would look for the front wheel:
If you like to learn more about phantom bills or the manufacturing process in Dynamics NAV please contact us.