This document allows the user to produce items into stock, without the item being sold immediately. This document allows the user to produce items into stock, using products from the stock account. Produce a Stock Account product containing a BOM (Bill of Materials).
Production Order and Bill of Materials (BoM)
For a product to be produced, and pass through a Production Order, the product must be established in the Stock Account with a Bill of Materials. Each of the products within the Bill of Materials would typically have a Standard Cost. If Standard Cost is used as an accounting policy, the product (parent product to be produced) will have a Standard Cost which is the accumulation of the Standard Costs, of the Bill of Material (component) products.
In the example below, there are 3 Products involved. HAMMER is the parent Product Code, with a Bill Of Materials (BOM) containing 1 HAMMER HANDLE, 1 HAMMER HEAD. Parent and BOM Product Codes require stability or oversight when Product Code Standard Costs change. 'Refresh Component Costs' will check and update the Stock Account cost of the BOM components. 'Update Assembled Product' will update the Standard Cost of the parent product according to the Standard Cost of the BOM components.
Documents > Stock > Bom Maintenance > Update Boms is the oversight process that can be run across all Product Codes, both parent and component, instantly performing the role of the buttons 'Refresh Component Costs' and 'Update Assembled Product'.
The typical outcome sought is that the accumulated Standard Cost of the BOM components would equal the Standard Cost of the parent product. The parent item may then have a Selling Price Markup from its Standard Cost, ie for the HAMMER a 100% Markup would result in a Selling Price of $16, accounting for the costs of the components and potentially labour production costs.
Clicking 'Work Order' from the ribbon generates a Work Order document, 013893.
Within the Production Order, the Work Ordered column is populated.
Documents > Production > Order
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1.Process is established at: Documents > Production > Process Specifaction. 2.Strike 'Enter' to pass through the Production No field. This will assign the next available sequential Production No. 3.Key in the number of Items to produce. 4.Select the Stock Account Product Code (which contains a BOM).
Clicking the 'Work Order' button from the ribbon of the Production Order, will generate: Documents > Sales > Work Order (Production). The HAMMER Stock Account will be updated to show the number of Items, in this case 1 In Production.
'Requirements' displays BOM.
Processing buttons 'Work Order' then 'Production W/O Complete': a) Places the number of produced products into the Stock Account. b) Relieves the Stock Account of the Bill of Materials used.
In this scenario, when the produced item (parent) goes through Sales Order Processing and is invoiced at a later date, the Bill of Materials are not pulled a second time. When the produced item is invoiced out, the (Cost of Sale) COGS debited at the Standard Cost of the HAMMER.
Reports > Status > Production Orders shows Production Orders progressed to Work Order.
Production Order
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Clicking 'Work Order' from the ribbon of the Production Order updates the Stock Account In Production field.
Generated: Documents > Sales > Work Order (Production)
'Work Order' from the ribbon of the Production Order, will generate: Document > Sales > Work Order, seen below.
From this document, 'Production W/O Complete' completes the process, crediting (reducing) the Stock Accounts of the component BOM, and debiting (increasing) the Stock Account of the Product Code produced, in this case HAMMER.
Generated: Documents > Sales > Work Order (Production)
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After 'Production W/O Complete' is clicked, Work Order 013893 is Closed. Stock Account entries are posted. The components are credited (removed from Stock), the parent Product Code is debited (put into Stock) at Standard Cost. HAMMER is ready for sale, or inclusion in another BOM.
'Requirements' display BOM.
Nested BOM Example
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Nested BOM Example
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This example contains nested Product Codes, which themselves contain a BOM. Nested BOMs can be used where necessary. The maintenance of Product Codes with nested BOM is greater than that of a Product Code without nested BOM. A nested Product Code has been used in this Help Page for completeness. In many cases BOM will not contain nested Product Codes with BOM, making maintenance and oversight easier.
PLSTR-BL-CI itself contains: 0.200 FB02505, 0.010 LABOUR PLSTR-BL-LAND itself contains: 0.320 FB05005, 0.010 LABOUR The Audit Trail shows the nested Product Codes PLSTR-BL-CI, PLSTR-BL-LAND themselves produced using their BOMs.
PLSTR-BL-CI, PLSTR-BL-LAND are then debited and credited from stock at once, as they are part of STRHLO3C.
Production Order
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Purpose: This document allows the user to produce items into stock, without them being sold immediately.
Prerequisites: The Process required to produce this product must have been established at: Document > Production > Process Specification.
The products to be manufactured into must have been established at: Documents > Stock > Account.
A scenario for this document relates to the manufacturing of items from raw materials.
If the Simple BOM Production feature setting is set to Y in the company data, then you will see a Register and Complete button. If the field is blank, you will see a Work Order button.
Process: Type in the process specification key (to search, click the right mouse button or strike the F12 key). Production No: Type in the production order number. If you leave this field blank, and strike the Enter key to go through this field, LILAC will automatically assign a production order number. Date: Type in the date the production order was created. This field defaults to the working date. Key: Displays the street address key for the company in which the products will be produced into stock. Ship Date: Type in the expected date that this production order will be completed. Carrier: Type in the carrier if the items need to be couriered. Weight: Displays the weight in kilograms of the production order. This is calculated by totalling the weight for each of the lines. The total for each line is calculated by multiplying the weight in the Stock Account by the Quantity. Total: Displays the total value of stock to produced.
Items: Type in the number of items to be produced into stock. Product Code: Type in the product key (to search, click the right mouse button or strike the F12 key). Description: This field will automatically displays the product description. Overtype this field if necessary. If producing meat into stock, type in the quantities for each pack separated by a single space.
Quantity: Displays the quantity that will be produced into stock. If producing meat into stock (that is, in the Stock Account the Unit is PK and the Per is KG) then the value of this field is calculated by adding the quantities specified in the Description field.
If the Unit field is M and the Per is T in the Stock Account, the Quantity field is calculated by Items * Weight / 1000.
Otherwise the quantity field should be the same as the Items field.
Unit: Displays the unit of measure for this product. Cost: This field automatically displays the standard cost for the product. Overtype this field if necessary. Value: Displays the value for this line. This is calculated by multiplying the Quantity by the Cost. Items Made: Type in the number of items to be confirmed. This will default to be the same value as the Items field. Work Ordered: Displays the number of items taken to work order. This field is only usefully when the Simple BOM Production feature setting is blank in the company data. Confirmed: Displays the number of items which have been confirmed. Cancelled: Displays the number of items which have been cancelled.
Transaction Processing Button Description Register: This button is only shown if the Simple BOM Production feature setting is set to Y in the company data. Clicking the Register button will make the stock as 'In Production' in the Stock Account document. Complete: This button is only shown if the Simple BOM Production feature setting is set to Y in the company data. Clicking the Complete button will produce the items into stock. The In Production field will be decremented by the value in the Items field. Two ledger entries will be created. The first will be in the INVENTORY Ledger in the Product account. The other will be in the TRADING ledger, MANUFACTURE account and the Product Group sub account. Work Order: This button is only shown if the Simple BOM Production feature setting is blank in the company data. Clicking the Work Order button will create a Sales Work Order document.
From Here: If the Simple BOM Production feature setting is blank in the company data, you must continue the manufacturing process via the Sales Work Order document.
