If the item is a component that is part of a production BOM, this field shows the level of that BOM.
If, for example, the BOM is a component of a second BOM which in turn is a component of a third BOM, the field will contain 2 because the item is a component of a BOM at the third level in the BOM structure. (The top level is designated by 0.)
If the item is not a component of any BOM, this field will contain 0.
The program calculates the value in this field when you run the Calculate Low-Level Code batch job.