ERPNext · manufacturing

Work orders, BOMs and costing that reconcile.

Production planned, issued and costed in the system that holds your stock and your ledger.

BOMs: Multi-level, with operations and scrap
Subcontracting: Material stays in your books
Go-live: One product line first
Implementation: Quoted per project

The problem

Production is planned on a spreadsheet, material issue is written in a shop-floor register, subcontracting is tracked in a notebook, and the accounts see only purchases and sales. The same fact is entered into more than one of them, and the cost of a finished item is a calculation nobody repeats twice the same way.

The modules

The modules, in the order an item is made:

Production planFrom sales orders, forecasts, stock and lead times
BOMMulti-level, costed from current stock valuation
Work orderA quantity against a BOM; reserves material
Material issueConsumption real, not periodic
Job cardsOperation, workstation, time taken
CostAccumulates on the work order as it is made

Each step is a transaction against the work order, which is why the cost needs no month-end exercise.

A BOM carries sub-assemblies with their own bills, operations and scrap, so a quotation uses today's material cost rather than last year's. Job cards are where capacity planning comes from, and how you find which process is the constraint.

Subcontracting runs alongside: material sent out stays in your books at a subcontractor warehouse, and the receipt back consumes what was supplied and adds the service cost.

Costing

Because material issue, operations and subcontracting are all transactions against the work order, the cost of a finished item accumulates as it is made. Material, process, subcontracting and overhead where you allocate it, without a month-end exercise.

Standard against actual becomes a report you can look at weekly, and it points at a specific process rather than at a total. Most units discover one operation losing materially more than everyone assumed.

What it does not do

It does not write your BOMs. Real quantities, real scrap and real operations come from your production people. We cannot supply them.
It does not make the shop floor enter things on time. Every report here depends on material issue and operations being recorded when they happen.
It does not go live across the whole factory on one date, not if we are doing it. One product line first.

Implementation

BOMs are the project. Getting them accurate is where the time goes, and it is not work we can do for you: it comes from your production people.

After that: warehouses and opening stock, one product line live first rather than the whole factory, then the rest. A phased go-live by product line works here far better than a single date.

Budget for the shop floor to resist entering things at the time they happen. That is the single behaviour the whole system depends on, and it is a management problem before it is a software one.

An ERPNext shop floor board of job cards by state: open, work in progress, material transferred, completed and on hold, each card naming its operation, work order and workstation. — ERPNext · Frappe TechnologiesJob cards by state. The board is only true if a card moves when the work does.

Questions

What is the difference between a BOM and a work order?

A BOM is the recipe: what goes into one unit of a finished item, at what quantity, through which operations. A work order is an instruction to make a specific quantity using that recipe, and it is the thing material is issued against and cost accumulates on.

You maintain BOMs once and raise work orders continually. If you find yourself editing a BOM per order, something in the setup is wrong; that is usually a case for a variant or a separate item.

Can ERPNext handle subcontracting?

Yes. Material sent to a subcontractor is held in a subcontractor warehouse so it stays in your stock, and receiving the finished item consumes what was supplied and adds the subcontracting charge to the cost. The subcontractor's account and your stock reconcile because both come from the same transactions.

Talk to us

Call +91 98554 31488, or use the WhatsApp button above. Tell us where production is planned now, how much goes to subcontractors, and whether your BOMs exist in writing.

That last answer decides how long this takes more than anything else does.