Convert formulations to production BOMs

Formulation Management • Article • 2/2/2026 •

The convert formula to production BOM, routing and item production scenario functionality transforms certified formulations into standard Business Central manufacturing structures. This automated conversion creates production BOMs from ingredient lists and routings from processing operations, enabling seamless transition from R&D formulation to production manufacturing.

Conversion process

When initiated, the system presents conversion options to the user. Based on the selected parameters, it creates production BOMs from ingredient lines and routings from phase/operation lines, maintaining full traceability between the original formulation and generated manufacturing structures.

The system handles different line types appropriately: ingredient items become BOM components with calculated quantities, catalog items are converted to regular items first, phase/operation lines become routing operations, and comment/instruction lines are preserved as documentation in both BOMs and routings.

Prerequisites

Before conversion can occur, the formulation must meet specific requirements:

Requirement	Description
Certification Status	Formulation must have a certified version.
Product Information	Must specify product type (Item/Catalog Item) and product number.
Output Configuration	Must have output quantity and output unit of measure defined.
Manufacturing Setup	Production BOM numbers and routing numbers must be configured.
Formulation Setup	Production BOM version numbers and routing version numbers must be configured.

To convert a formulation to production structures, follow these steps:

Select the Search icon , enter Formulations, and then choose the related link.
The Formulations page opens.
Select the formulation you want to convert to open the Formulation Card page.
On the action bar, select Convert Formulation.
The Formulation Conversion Parameters page opens.
On the General FastTab, configure the basic conversion options.
Turn on the Create Production BOM toggle to select whether to generate a production BOM from ingredient lines. When turned on, the system converts all item, catalog item, and production BOM lines into BOM components with calculated quantities.
Turn on the Create Production Scenario toggle to create a production scenario that links the BOM and routing for integrated manufacturing planning. For more information, see Aptean Production Scenarios.
On the Routing Options FastTab, specify how to handle routing creation.
In the Routing Assignment field, select the routing handling method:
- Retain routing: Uses the existing routing number stored on the formulation header
- Assign existing routing: Allows you to select an existing routing to assign to the item
- Create new routing: Creates a new routing from phase/operation lines in the formulation
In the Routing no. field, if you selected Assign existing routing, select the existing routing to assign to the item.
On the BOM options FastTab, configure the BOM calculation method.
In the BOM Calculation Type field, select how quantities are calculated:
- Per Unit based: Creates per-unit quantities by dividing by the formulation output quantity.
- Batch based: Maintains batch-level quantities (requires Process Manufacturing).
Select OK to start the conversion process.

Production BOM creation

The system creates Production BOMs with the following logic:

BOM header: Uses the formulation's output unit of measure and description. Links back to the source formulation for traceability.

BOM lines: Each ingredient Line type field becomes a BOM component:

Item: Direct conversion with quantity calculations.
Catalog Item: Converted to regular items first, then added as BOM components.
Production BOM: Referenced as sub-BOMs within the main BOM.
Formulation: When formulations contain sub-formulas (formulation lines referencing other formulations), the system automatically converts these references to Production BOM references, creating a hierarchical BOM structure that mirrors the formulation hierarchy.
Comment/Instruction: Added as BOM comments for documentation.

Quantity calculations

Per Unit based: Component Quantity = Net Quantity ÷ Output Quantity
Batch based: Component Quantity = Net Quantity (maintains batch quantities)

Routing creation

When phase/operation lines exist in the formulation, the system creates routings:

Routing header: Generated with automatic numbering and formulation traceability.

Routing lines: Each phase/operation becomes a routing operation with 10-number increments (10, 20, 30, etc.).

Operation details: Transfers phase/operation specifications including work centers, run times, and setup requirements.

Comments: Comment/instruction lines following operations are added as routing line comments.

Formulation updates

After successful conversion, the formulation header is updated with references to generated structures:

Field	Purpose
Production BOM No.	Links to the created production BOM.
Production BOM Version	Links to the BOM version (when versioning is used).
Routing No.	Links to the created or assigned routing.
Routing Version ode	Links to the routing version (when versioning is used).
Production Scenario No.	Links to the created production scenario.

Item updates

The system updates the target item with manufacturing references:

Production BOM No. field is set to link the item to its BOM.
Routing No. field is set to link the item to its routing.

Validation actions

Users can run Check formulation before conversion to identify and resolve issues without attempting the full conversion process.

Example

Scenario: Converting a certified chocolate bar formulation to production BOM

Formulation setup

Formulation No.: CHOC001
Description: Chocolate Bar Formula
Product Type: Item
Product No.: CHOCBAR001
Output Unit of Measure: KG
Status: Certified (Version 01)

Formulation lines

Line 1: Item FLOUR001 (All Purpose Flour) - 2.5 KG
Line 2: Item SUGAR001 (Granulated Sugar) - 1.8 KG
Line 3: Item COCOA001 (Cocoa Powder) - 0.5 KG

Conversion process

Open Formulation CHOC001
Select Convert Formulation
Configure parameters:
- Create Production BOM: Yes
- BOM Calculation Type: Per Unit Based
Select OK

Result:

Production BOM created with Status = New.
Item CHOCBAR001 updated with Production BOM No..
BOM lines created matching formulation ingredients with exact quantities.
Formulation header updated with production BOM reference.

Cost rollup analysis

Cost analysis provides visibility into formulation economics and supports pricing decisions and cost optimization initiatives.

Perform cost roll-up and analysis:

Analyze formulation costs using configurable cost scenarios to support pricing decisions, cost optimization, and financial planning. The cost analysis functionality provides detailed breakdowns of material and labor costs with support for what-if scenarios and version comparisons.

Set up cost scenarios

Cost scenarios define the cost basis used for formulation analysis, enabling comparison of different costing approaches and what-if analysis scenarios.

To create cost scenarios, follow these steps:

Select the Search icon , enter Formulation cost scenarios, and then choose the related link.
The Formulation cost scenarios page opens.
On the action bar, select New to create a new cost scenario.

Configure the cost scenario parameters.

Field	Description
Code	Enter a unique identifier for the cost scenario. This code will be used when selecting cost scenarios for analysis.
Description	Enter a descriptive name for the cost scenario.
Item Cost Basis	Select the cost basis to use for inventory items. The available options are: Unit Cost, the system uses the standard unit cost from the item master data. Last Direct Cost, the system uses the most recent direct cost for the item. Alternate Cost, you must specify an alternate cost code and basis. This fields are editable when the Aptean Pricing Matrix extension is used. For more information, see Aptean Pricing Matrix. External Cost, the system uses the external cost field on the formulation line.
Catalog Item Cost Basis	Select the cost basis to use for catalog items (non-inventory items). The available options are: Published cost, the system uses the published cost field from the catalog item record. Negotiated cost, the system uses the negotiated cost field from the catalog item.
Alternate Cost Code	When using Alternate cost as the item cost basis, specify the alternate cost code to retrieve costs from the alternate cost system. For more information, see Aptean Pricing Matrix.
Alternate Cost Basis	When using alternate costs, select whether to use Cost or Future cost from the alternate cost records. For more information, see Aptean Pricing Matrix.
Default Scenario	Select this checkbox to designate this scenario as the default for new cost analyses. Only one scenario can be marked as default. When you mark a scenario as default, the system automatically removes the default flag from other scenarios.

Analyze formulation costs

The cost breakdown functionality provides detailed analysis of formulation costs, showing material costs, labor costs, and cost percentages for each component.

To analyze formulation costs, follow these steps:

Select the Search icon , enter Formulations, and then choose the related link.
Select the required Formulation No. field value to open the formulation.
On the action bar, select Cost breakdown.
The Cost breakdown page opens.
In the Cost scenario code field, select the cost scenario to use for the analysis. If left blank, the system uses the default cost scenario.

The system displays detailed cost information for each formulation line:

Field	Description
Line Type	Displays the type of formulation line (Item, Catalog Item, Formulation, Phase/Operation, Production BOM).
No.	Displays the item number, catalog item number, Formulation number, phase/operation code, or production BOM number.
Description	Displays the description of the component or operation.
Formulation Quantity	Displays the net quantity as specified in the formulation recipe.
Adjusted Quantity	Displays the gross quantity including loss percentages and yield factors. This represents the actual quantity required for production.
Unit of Measure Code	Displays the unit of measure for the component or operation.
Unit Cost	Displays the cost per unit based on the selected cost scenario. For items, this reflects the cost basis specified in the cost scenario. For phase operations, this shows the unit cost from the phase/operation detail record.
Extended Cost	Displays the total cost calculated as Unit Cost × Adjusted Quantity in the item’s base unit of measure. This represents the total cost contribution of each component.
Cost %	Displays the percentage contribution of each component to the total formulation cost.

Cost calculation methods by line type

The system calculates extended costs differently based on the formulation line type:

Item: The system retrieves the unit cost based on the cost scenario's item cost basis. It converts quantities to base units of measure to calculate the extended cost.
Catalog Item: For catalog items linked to inventory items, the system uses the item cost. For catalog items without item linkage, the system uses the catalog item cost basis (Published Cost or Negotiated Cost) specified in the cost scenario.
Formulation: When a formulation references another formulation, the system recursively calculates the cost of the sub-formulation using the same cost scenario. The unit cost represents the total unit cost of the sub-formulation, and the total cost equals this unit cost multiplied by the required quantity.
Phase/Operation: The total cost equals Run Time × Unit Cost from the associated work center or machine center. These costs represent labor and overhead expenses for processing operations.
Production BOM Lines: The system calculates costs using the standard cost calculation engine for production BOMs.

Total cost calculations

The cost breakdown page displays summary totals that provide overall formulation cost information:

Total Batch Cost: This field displays the total cost for the entire formulation batch. The system calculates this value by summing all extended costs from individual formulation lines.
Total Unit Cost: This field shows the cost per unit of formulation output. The system calculates this value using the formula: Total Unit Cost = Total Batch Cost ÷ Adjusted Output Quantity.

The yield percentage affects the unit cost calculation by reducing the effective output quantity. For example, if the output quantity is 1000 units and the yield percentage is 95%, the adjusted output quantity becomes 950 units, resulting in a higher unit cost.

To compare formulation versions, follow these steps:

Create multiple versions of a formulation with different ingredient compositions or quantities.
Open the Cost breakdown page for each version using the same cost scenario.
Compare the Total unit cost and Cost % values to identify cost differences between versions.
Use the Extended cost column to identify which ingredients contribute most to cost differences between versions.

Users can export cost breakdown data to excel for further analysis and reporting.