In the article below, we explore the SAP Business One Production module. We review three topics: SAP Business One Bill of Materials, SAP Business One Resources, and SAP Business One Production Orders. How do we use the SAP Business One Production module? Lets proceed!
Let’s see why the production module of SAP Business One is useful and who can leverage it. If your company does light assembly or sells items in bundles, this tool can dramatically simplify your daily routine. First of all, you need to treat a bill of material in a special way.
SAP Business One provides the ability to specify a top-level item. Some SAP users refer to it as a finished material or parent. Next, you have to decide what components are child items. After that, take the production order and bring everything together, producing the corresponding parent product from its components. That’s it!
However, this process is way more detailed, so we need to shed light upon several important nuances, such as types of bills of materials used in SAP Business One.
SAP Business One offers the following four BOM types:
In addition to the features described above, SAP Business One provides the ability to manage BOMs in bulk. Go to the SAP Business One Production main menu and you will discover the following two instruments:
You can apply additional configurations to sales BOM prices. SAP Business One provides the ability to choose a basis for their calculation under Administration -> System Initialization -> Document Settings -> General tab. Here you can specify whether to configure the sales prices from the parent item to its children.
Watch how to create a new BOM below:
Resources represent a special type of master data utilised in the production processes. Under this term, we consider such resources used in the production as labour hours, machine capacity, other means, etc.
You should manage SAP Business One resources as follows:
The resource master data window displays the resource number, description, type, group, measure units, etc. Other information is split between the following tabs:
The resource master record displays the resource availability per the warehouse. The General tab of the resource master data lets you add up to 10 costs that compose the total resource cost. This parameter is used for calculating and posting component costs. Note that it is necessary to specify primary accounts for resource expenses and WIP in the G/L account determination to enable the correct functionality for these processes.
You can select the Internal Resource Capacity option from the context menu to update the daily capacity of the defined period. Proceed to the Planning Data tab of the resource master data record. Here, SAP Business One provides the ability to specify the estimated daily capacity for each day of the week. For instance, your daily capacity for 3 employees that work 8 hours a day is 24 hours.
SAP Business One utilises the production order documents to record the finished materials to be produced along with their components and issue methods. The system offers two ways of creating POs. Firstly, you can run through all the corresponding processes manually. Secondly, the system lets you leverage the Procurement Confirmation Wizard to automate this process.
By default, the following three types of POs are at your service:
If you need to add a production order in SAP Business One, follow these steps:
Don’t forget to change the status of your PO to Released when the production process begins. From the context menu, and choose the Issue Components option to add manual components. Report the completion of production at the end of the process to receive the finished item into stock. Also, this action triggers the cost of producing the item.
Also, note that items set to backflush are issued automatically. You only need to choose Report Completion. SAP Business One creates an Issue for Production document automatically. However, it is impossible to backflush items that are managed with serial numbers or batch numbers. They are bound to a manual issue method so that you have to identify the serial numbers or batches to release them from inventory.
As for the Summary tab, it displays the components’ total cost, finished goods cost, and whether any variances between them occur for the standard costing method. Changing the production order status to Closed triggers the variance posting to the WIP variance account. Note that for Moving Average, FIFO, or Serial/Batch valuation methods, SAP Business One updates the parent cost on the basis of the component’s total cost.
You can see more information about production orders below: