As the figure illustrates, a product such as a bike consists of several components. Each of these components is in turn constructed from several separate parts.

In the SAP S/4AHANA system, you store the structure of all components as a bill of material (BOM). All the items in the BOM that you want to control in the sales document must be flagged as relevant for sales.
Note
The items in a bill of material are controlled differently than the item categories in a sales document. If you create a BOM material with BOM usage 5 (sales and distribution), all the items in the bill of material will be automatically flagged as relevant to sales.By making the appropriate settings in Customizing for the item categories in the sales document, you can copy the components in the bill of material to a sales order. To process the sales document, you only need to enter the material number of the BOM.
The BOM appears in the sales document as a structure with main items and sub-items. The system explodes the BOM in the sales order by automatically generating sub-items for the components.
Exploding Bill Of Material in Sales Documents
How do you control what a bill of material can do in a sales document?
You control it with the individual item categories. In Customizing, you define and assign item categories for the main and sub-items of the BOM in the sales document. The figure illustrates how it works.
The figure shows that a specific item category group assigned to the material master record of the main item defines which item categories are assigned to the main item.
To determine how far the BOM should be exploded in the sales document, you need to define the extent of the structure of the item category for the main item.
When you determine the sub-items, the system also needs to know the item category of the higher-level item.
In Customizing for item categories, you control which item(s) are relevant to pricing.