PRODUCTION

SAP B1 Production Processes

Use the SAP Business One Production module to create and maintain the following:

• Bill of Materials (BOMs) - specifies the quantities of components that make up a product.
• Production Orders - a set of instructions for planning and assembling a production item. It tracks all the material transactions and costs involved in the production process, as well as additional costs, such as labor overhead.
• SAP Business One supports the following types of production orders:
  • Standard - used for regular production. Components are copied from the item BOM.
  • Special - used to produce items or perform activities on the shop floor that are not based on the Standard BOM.
  • Disassembly - used to report the disassembly of an item with a production BOM. Components are copied from the item BOM.

A finished product may be the result of an entire production process, or a collection of items that are sold as a unit, but are not the output of a production or assembly process.

Item Master Record in SAP B1

SAP Business One lets you to manage all items that you purchase, manufacture, sell, or keep in inventory. Services can also be defined as items, although they are only relevant for sales.

For each item, you enter the data relevant for a particular area in SAP Business One, which uses this data for purchasing, sales, production, warehouse management, accounting, and services.

In addition with SAP B1, you can define and update the following inventory functions:

• Serial & Batch Numbers
• Alternative Items
• Default Business Partner Catalog Numbers

Bill of Materials (BOM)

Use the Define Bill of Materials function to create a multilevel BOM, one level at a time.

The BOM has a hierarchical arrangement of components. Enter all the child items and raw materials required to assemble and produce the finished product.

Resources

The Resources module serves as an extension to the Production module; together they provide a base platform for managing light manufacturing processes in SAP Business One.

Using the resources functionality you can perform the following key business functions:

• Manage production capacity
• Monitor complete standard production costing
• Analyze real production variances
• Simplify BOM management
• Use production orders more flexibly

A resource is a commodity, machine, labor, and so on, used to produce goods and services. As opposed to items, resources have capacity available throughout a period of time that can be consumed in a production process. You can define daily resource capacity for each day separately or for a period of time, and then you can assign the capacity to production orders. Consumption of resources in a production process contributes to overall production costs and can be split into underlying cost elements for further accounting purposes.

Material Resources Planning (MRP)

The Material Requirements Planning (MRP) module enables you to plan material requirements for a manufacturing or procurement process based on the re-evaluation of existing inventories, demands, and supplies on changing planning parameters (such as lead time determination, make or buy decisions, and holiday planning).

MRP calculates gross requirements for the highest bill of materials (BoM) level, based on existing inventory, sales orders, purchase orders, production orders, forecasts, and so on. It calculates gross requirements at the lowest BOM levels by carrying down net parent demands through the BOM structure. Dependent levels might have their own requirements, based on sales orders and forecasts.

The results of the MRP run are report and recommendations that fulfill gross requirements by taking into consideration the existing inventory levels and existing purchase orders and production orders. The MRP run also takes into account predefined planning rules such as Order Multiple, Order Interval, Minimum Order Quantity, Inventory Level, and so on.

Production Orders

SAP Business One supports three types of production orders.

• Standard – Based on the bill of materials and used to produce a regular production item. You manage material transactions of the regular production process. You can change components at the production stage. When you open a new standard production order, all the components are filled in automatically.
• Special – Used to produce and repair items or to perform activities that are not necessarily bill of materials items, for example, repair orders for customer equipment cards or rejected assemblies. You create special production order components manually.
• Disassembly – Used to dismantle a parent item of the regular product into its child items. The separate parts can then be put into inventory and sold. For example, you can purchase a used car, take it apart, and sell the individual components.

Production Order Issue Methods

You issue component items using either the Manual or the Backflush method.

• Manual – You issue individual component items to the production order. This enables you to post components issued to a production order precisely when they are required in the production process.
• Backflush – SAP Business One automatically issues item transactions for the needed component items (as defined in the Components tab) when a product is reported as completed.

Production Order Status

• Planned – SAP Business One initiates production orders with Planned status. Since the production order is not released to the shop floor for manufacturing: You cannot yet issue items or report completion of the production order. You can update the production order.
• Released – You change the production order to this status when you release it to the shop floor for production. At that stage: You can report transactions for the production order and the issue of the components. You can update the component items as long as there are no transactions for the selected component. You can add a new component.
• Closed – The production order is Closed when you cannot add any new transactions to it. You close the production order when production is completed.

Production Order Reports

Use the reports listed under this menu entry to:

• Generate the list of the bills of material
• View open production orders