What is a prerequisite to use the product proposal?

The product proposal in SAP S/4HANA Service suggests items (e.g., spare parts, services) in service orders or contracts:

Create a bill of material (BOM) with BOM usage S (Service): A service BOM (usage S) is a prerequisite, defining standard components or services proposed in service processes. Configured via transaction CS01, it’s linked to service master data.

BOM usage 4 (Plant Maintenance): Used for maintenance, not service proposals.

BOM usage 5 (Sales and Distribution): Relevant for sales, not service-specific proposals.

Item category I (structure element): Item categories define BOM structure but aren’t the prerequisite; the BOM usage is key.This is part of service order management (scope item 3D2)."A BOM with usage S (Service) is required to enable product proposals in service transactions." (SAP Help Portal, Service BOM).