Creating a Knowledge-Based Order BOM 
Use
When you create a knowledge-based order BOM, you copy the super BOM and you copy its local dependencies with manual changes. All other data is referenced. You save the entire BOM structure with all non-variable parts and variant parts, not the result of the BOM explosion. Every time you call the configuration editor, and in subsequent processes (such as material requirements planning), the order BOM is re-exploded according to the assigned characteristic values, and the dependencies are re-processed.
Changes to global dependencies and classification take effect each time the order BOM is reopened.

You cannot create knowledge-based order BOMs in the
Prerequisites
You have created a material BOM for the material for which you want to create an order BOM. The material BOM is a super BOM, containing all the components that could be used in the finished product.
Configuration Profile
In the
configuration profile of the material in the sales order item, and all configurable assemblies that you want to save as order BOMs, the BOM explosion setting must be either Single level or Multi level and the Order BOM indicator must be selected.Relevance to Material Requirements Planning (MRP)
To ensure that order BOMs are relevant to MRP, set the Order BOM indicator in Customizing for Material Requirements Planning, by choosing Planning
® BOM Explosion/Routing Determination ® Define BOM explosion control.Features

If you insert a new item, the system checks whether it can use an order BOM that exists for the component. If there is no order BOM, the material BOM is used.

The first level of the configuration is often done by the sales department, whereas the configuration on subordinate levels is done in engineering, for example. However, the configuration on subordinate levels may also be done when the sales order is created.
Restrictions
You cannot use the global reporting functions for BOMs, such as BOM comparison, here.
See also:
Processing Sequence for Dependencies