This is unique to ALERE. Should someone tell you that they do it, then ask them to demonstrate it!.
Create one BOM to represent a product that has many choices instead of one BOM for each option. For example, a bicycle that comes in different colors, sizes, tires, deraillers, and seats can be represented by one single bill rather than dozens of bills.
A single modular bill can be created and maintained in a fraction of the time it takes to develop many similar bills where the only difference is a choice. And, it easy to add choices!
How many errors does one mistake in a BOM cause? Two. One for ordering the wrong part and one for not ordering the right part! One BOM with optons will have inherently less errors than many BOMs.
Those wrong part orders because of errors have an inventory impact. Experience shows that Modular BOMs can reduce inventory by seven to ten percent.
A choice on a Modular BOM can pass the answer to subsequent choices. For example, the choice of bicycle brakes may depend on the type of derailler that is selected. BOM inheritance forms the basis for sales order configuration.
Use one part number to manufacture many differently configured products. Or predefine part numbers for finished good items based on the configuration selected. This allows the stocking and tracking of products with options under their own finished good item number.
Easily analyze the impact of different costs for a product based on the options chosen and the quantity produced. This allows pricing rules to calculate a suggested list price for each permutation.
Using Modular BOMs supports a Sales Order Configurator for use with for no extra work. The configurator reduces order entry time, increases accuracy, and will even allow a generic part number to start the process and a finished good part number and price to be assigned automatically when all options are chosen.