A bill of materials, written ideally, says a product needs exactly so much of each component. Real production is rarely that perfect: there is scrap, there is loss, there is yield below one hundred percent. This piece is about reflecting scrap and yield in Odoo bills of materials.
The gap between the ideal BOM and reality
An idealised BOM lists the exact quantity of each component that ends up in a finished product. But production consumes more than ends up in the product. A material is cut and some is offcut. A component is occasionally damaged in assembly. A process loses a fraction of its input. So the quantity of a component a manufacturer actually needs to produce a unit is often more than the quantity that ends up in the unit. If the BOM only ever reflects the ideal, the manufacturer's planning will consistently under-provide, and its costing will understate what production really consumes.
Why this matters for planning and cost
The BOM drives planning and costing. If the BOM says a unit needs ten of a component, but in reality producing a unit consumes eleven because one is lost, then planning based on the ideal BOM buys and makes too little, and costing based on the ideal BOM understates the true material cost. Reflecting scrap and yield in the BOM is what closes that gap, so planning provides enough and costing tells the truth.
Reflecting realistic consumption in the BOM
The practical approach is to make the BOM reflect what production genuinely consumes, not the perfect-world quantity. If producing a unit reliably consumes a certain amount more of a component than ends up in the product, because of cutting loss, breakage, or process loss, then the BOM quantity for that component should reflect the real consumption. The BOM should describe production as it actually happens, including its normal, expected losses, so that the quantities planning and costing use are realistic.
The figure to use is the manufacturer's genuine, observed loss rate for that component in that process. This is where having real data on consumption matters: a manufacturer that knows its actual scrap and yield rates can set BOM quantities that match reality. One that guesses will be wrong in whichever direction the guess leans.
Yield on the output side
There is also the output side. A process intended to produce a certain quantity may produce slightly less because of yield below one hundred percent, this is especially true in process and batch manufacturing. A manufacturer should be conscious of expected yield so that, when planning how much to produce to meet a need, it plans for the yield it actually achieves, not a perfect yield. Production that is planned at perfect yield will tend to fall short.
Distinguish normal loss from genuine waste
One honest point. Reflecting scrap and yield in the BOM is about normal, expected loss, the routine, predictable consumption above the ideal that is simply how the process works. It is not a licence to bake genuine, avoidable waste into the BOM and forget about it. Excessive scrap is a problem to be reduced through process improvement, not a number to be permanently absorbed into the BOM. The BOM should reflect realistic normal loss; persistent high scrap is a signal to investigate, not to accept.
The takeaway
Production rarely consumes materials perfectly, so an Odoo bill of materials should reflect realistic consumption, including normal scrap and loss, rather than the ideal quantity that ends up in the product. This keeps planning provisioning enough and costing telling the truth. Use genuine observed loss rates, account for expected yield when planning output, and treat the BOM's loss allowance as normal loss only, while reducing genuine waste through process improvement. For how we approach Odoo for manufacturers, see our manufacturing work.