Manufacturing Order and Costing in OpenERP/Odoo

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The current manufacturing module of Odoo has certain missing features-

1. We don’t have configuration for multiple Raw Material Location
2. Issuing products to Production (Semi-finished) location is missing
3. Cannot select another BOM for Manufacturing Order created automatically from Sales Order
4. There is no track of Estimated and Actual Cost
5. No field to track total cost of production

In order to enable creation of Manufacturing Order from Sales Order and also automatic generation of Purchase Requisition for raw materials, the configuration steps is as follows. Also, to achieve the above listed advanced features customization have been done. Here are the steps

1. Finished Product Configuration– The product is defined as “Stockable”. Costing method should be set to Standard (so that the accounting impact pulls the price from Manufacturing Order). Select routes as Make to Order and Manufacture.
2.  Raw Material Product Configuration– The product should be set to “Stockable” if stock management is required else set to “Consumables”. Costing method should be set to Average (we are assuming here that raw materials will always be bought from Supplier). Select routes as Make to Order and Buy. Default Raw Material location of this product can also be configured under Inventory tab.

   

   Raw Material Location Configuration

3.  Bill of Material Configuration– Goto Manufacturing -> Products -> Bill of Materials in order to define BOM for every product.
4. Routing Configuration– Next, we define different operations through which the raw materials will go through. We also specify default Raw Materials and Finished Products Location. Make sure right Semi Finished Location is also selected. Once routing is defined we attach it to BOM. Here, we have customized to allow users to add default Raw Material and Finished Product Location so that when Manufacturing Order gets created it pulls the location from here.

   

   Routing Configuration

5. Estimating Cost– A new button is provided in Sales Quotation. Based on this estimated cost salesman adds profit margin to get the final sale price of the order.

   

   Manufacturing Cost Estimation

   On clicking, system automatically pulls 2 things-

   • Raw Materials defined in BOM and
   • Operations defined in Routing

   The subtotal and quantity comes from these configurations. User can click on green button to change the quantity (no. of hours) of an operation. The subtotal and total estimated cost gets adjusted accordingly.

   

   Estimated Cost

6. Fetching Estimated Cost in Quotation Line– A button is provided in quotation line as shown below

   

   Fetching Estimated Cost

   When the button is clicked then it asks for Profit Margin and accordingly updates the unit price of the quotation line

   

   Add profit margin to estimated cost

   The price has been updated-

   

   Updating Estimated Price

7. Manufacturing Order– Finally, when the quotation is converted to order then automatically manufacturing order gets created.At this stage, Delivery Order shows Waiting Another Operation as MO needs to be completed

   

   Delivery Order Waiting Another Operation

   MO created is in draft state so that user can verify all the details before confirming it. Also, a product can have multiple BOM so make sure right one is selected.

   

   Manufacturing Order in draft state

   (a) Buying of Raw Material

   After MO is confirmed, then click on Check Availability to automatically raise Purchase Requisition against the supplier configured in Product Master. If the raw material is already there in stock then click on Force Reservation button as shown in the following diagram

   

   Buying Raw Material

   Purchase Requisition gets created. The system smartly merges all products into one which is being bought from one supplier and coming into same Raw Material location. The full workflow is followed and we receive all raw materials.

   (b) Issuing Raw Materials to Work in Process locations

   Before we purchase raw materials, the Issue Products tab shows products in red. But once the product is purchased and available in stock then the color changes to black. Here, the stock move created pulls source location from the Raw Material Location field configured in Product Master. This way each material can have different source location.

   

   Issue Raw Materials to Work in Process locations

   We then click on green button to issue them to Work in Process location

   

   Raw Materials Issued to Work in Process location

   (c) Start Production

   Click on Mark as Started button on the header to start production. This will generate costing of BOM in cost breakdown tab.

   

   Start Production

   Cost Breakdown tab lists actual raw material costing

   

   Actual Cost Breakdown

   (d) Process Work Orders

   Work Orders tab lists all the operations defined in Routing. Number of Hours field is editable so that user can enter the actual no. of hours spent on each operation. As each work order is completed, Cost Breakdown tab lists the actual costing.

   

   Actual Cost Breakdown

   (e) Finally when all the work orders are completed then we hit Finish Production. Total cost field shows the actual costing of the product

   

   Finish Production

   The MO state now shows Done. The delivery order state also changes to Ready to Transfer

   

   Delivery order changes to Ready to Transfer

8. Delivery Order–  Finally we transfer the finished product to our customer by clicking on Transfer button.