First keep in mind what I name the "phantom effect": when a WO is created (if there no stock available) the phantom is replaced by its own components. The benefit is to ease the BoM management.

Example: A customer of mine paint the inner part of the food cans he produced. This painting process always involved the same 3 components. So by managing a phantom for this paint (used in all and every finished goods), he simplify a lot the read of a Bom and whenever the paint formula changed, he just need to update a single BoM to affect all finish goods.

So in a nutshell, it is very handy when you have a group of components often used together.

Note: 

oThe multi-level BOM using a phantom as to be set under the same BoM code.

oThe phantom does not impact the list of operations of the work order.

Now, the other possible use is to manage replacement while stock last. This usage is specific to Sage EM: the "phantom effect" only occurs if there is no stock available on the phantom (Yes a phantom can be managed into stock in Sage EM). The benefit is to set the product-to-replace as a Phantom and to create a BoM with the new product as component. As long as you have the product-to-replace in stock, work orders will use it. When you run out of stock, the "phantom effect" will automatically swap the product-to-replace by the new product.

And the best is: it works as well on MRP processing!

What about using a phantom in sales order? What is the behavior and possibilities?

Normally it should have not effect. However, I have tested once to manage a component of a sales BoM as a phantom and it did replace the phantom product by its component in the sales order. But I am not sure if this was normal or an anomaly. 

Anyway why would you like to use phantom in sales order for?

When you are not sure of the product you will issue, imagine you have this case:

Products like natural stone;

• You have a block of stone, customer request marble;
• But you have several origins of marble;
• You register block of marble as phantom in the order;
• But has your stock always have the origin the product customer wants don't exist has a unique product;
• So I think that maybe phantom could be the solution;
• Phantom in the sales order without origin and then substituted by the stock product in the sales delivery;

In discrete manufacturing such as equipment or electronics, there are many reasons to use phantoms.  Some are similar to the paint example.  In our machines, there are many subassemblies that are built as they are used on the machine, but you need to have a drawing and manage the BOM for the subassembly.  The subassemblies may be used on multiple products.  You may also need to build the subassembly only for service requirements.  

Phantoms are also used if you want to set up a flow line for a product where you are building to a specific takt time and need all the components available at the correct station.  Engineering defines the BOM for subassemblies and you need to only create one work order for the final product.