SAP Business One - Production

Companies that use SAP Business One for their production need to create bills of materials and production orders, manage goods issues and goods receipts and so on. With SAP Business One, all functions are implemented to create parts lists for sales, assembly, submission and production, for example, then convert these parts lists into production orders and retrieve finished goods from stock - and remove the raw components at the same time. There are methods for this,
Convert sales orders and quotations into production orders without having to enter them manually. All reports are also available to update parts lists, prices and items in batches and to check whether the items are set up correctly.

The production process in SAP Business One

Production in SAP Business One — `Production process SAP Business One`

Like the other components of SAP Business One, the production module is also strongly integrated into the overall solution.

The material requirements plan specifies production orders for production and manages the procurement and reservation of the necessary components.
Additions from production and disposals to production are recognised in inventory management and financial management.
Both finished products and components can be serial numbers or manage them in batches.
Production orders can be linked to both SAP Business One financial projects and organisational projects.

Parts lists in SAP Business One Production

The bill of materials is the basis for the production module and forms the basis for production orders. But SAP, the BOM is also used to map similar requirements that do not lead to a production order. All BOMs consist of a superordinate article and one or more subordinate articles. The parent item is the finished product, and the child item can be either a raw component or a finished product.

Parts lists types: Sales parts list

SAP Business One manages four types of Parts lists. The sales BOM can only be created for higher-level items, i.e. items that are to be sold. The parent item must be a non-inventoried item and should be labelled as a sales item in the item master data. Subordinate items can be labelled either as stock items or as sales items. When you enter the parent item in the sales document, the programme will list all child items to check if stock is available. This type of BOM is useful if you want customers to see the bundled details of the order. Pricing in a sales BOM is used to determine the sales price for the customer. The gross profit determines SAP B1 at the lower level.

Parts lists Types: Assembly parts list

The assembly BOM is like the sales BOM, with the difference that in the marketing documents, the only item listed is the parent item. This type of BOM is used when you do not need to see details about the bundled items. SAP Business One uses the price calculation in an assembly BOM to determine the prices for customers. The application calculates the gross profit at the parent level by adding up the child items.

Parts lists Types: Template parts list

The master BOM has no restrictions with regard to the type of items that can be
can be entered. These can be sales, purchase or stock items or any combination of the three. A reference parts list can be used with both sales and purchasing documents. If the parent item is used in a sales document, you can make any necessary changes to items or quantities. A reference BOM is useful if a customer needs to see which items are included in the package. Pricing in a reference BOM is used to determine the prices for the customer. The gross profit is calculated at the higher level by totalling the subordinate items.

Parts lists types: Production parts list

Finally, production BOMs are used when a production order is required. The parent item is a finished product and the child items are component items. The production BOM serves as a guide for the production area on how the product to be manufactured should be produced.

The costs for the component items listed in the item master are used to determine the finished costs of the parent item. Labour costs and overheads can be
Production BOM can be added as an item with standard costs. The gross profit is shown on the
Calculated at item level. Only the higher-level items are listed in the sales documents. The higher-level items are all included in the MRP run. Variants of the production parts list can be created by selecting the "Special" or "Disassembly" option instead of the Standard order type.

Parts lists types: Production parts list / Disassembly

A production bill of materials can also be included in a production order for a
a reverse process by defining the production order as a disassembly type. As a result, an end product becomes a number of individual parts. It does not matter whether the process is a reversal of a previously performed manufacturing process or whether the central requirement of the manufacturing process is disassembly.

Resource utilisation in the parts list

Resources make it possible to include working times or machine times in the bill of materials. The main aim is to track the utilisation of resources and obtain information about availability.
As resource consumption is measured in units of time, they are the basis for determining the production time (lead time) of a finished product.

The production order

A production order is a set of instructions for the production department to plan
and production of a finished product. A production order is used to track all costs associated with the production process, including resources such as labour.
SAP Business One provides several options for converting demand triggers into production orders.

Various methods are available to generate production orders.

Production orders can be manually linked to a sales order. The required components are not procured automatically.

Generation takes place directly from the sales order or quotation. The trigger is a corresponding presetting in the order or quotation.
The procurement assistant can be used to combine several requirement triggers into one production order.
Material requirements planning is used to generate the production order, which means that the MRP assistant is used to track whether requirements triggers contain finished products.
The material requirements planning module is also used to trigger material procurement or production by comparing current stock levels with reorder points.
It is also possible to combine several customer orders into one production order

Production orders can be scheduled and released. Once a production order has been approved, parts (items and resources) can be issued for production. Components can be issued manually or using the retrograde withdrawal method.

With the retrograde withdrawal method, after an "Input from production" has been created
the items are automatically output for production. With the manual output method, you can output the components exactly as they are required in the production process. You can also output a partial quantity. The notification of completion triggers the inclusion of the finished product in the stock. The backflushed components are output automatically.

Production order with routing

Route sections structure the parts list. They summarise the items, resources and texts under them up to the next route section and thus allow simple regrouping of
Parts list parts.

A production order with routing is based on a bill of materials with routing and consists of sections.

Each stage can contain multiple component lines and various stage-level production calculations.
The method of calculating the routing datum:
Can set date dependencies between the different sections and update the dates for the sections accordingly
Can define the allocation of resource capacity according to the resource
Determine single run capacity