DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Production order vs Inventory Items


#1

In terms of managing raw materials and have it counted down from the asset. At the moment we need to create a production order for each item. This makes an assumption…each product is made as a batch and stocked on shelves. It is not the case for all products especially for products that are simply bought under a supplier reference and sold under our own reference. Would it make sense to have within the inventory item page to tag the exact same list used in the production order. This items requires …BOM and makes this final product. When a product is sold the absolute truth is anyhow the product was put together or manufactured
Am I the only one who thinks the same?


#2

a BOM feature and improvements to production orders are already in the ideas category.

this would not be true in all cases. two finished products may share few of the same raw materials. so marking them as exclusively for one finished product will not be possible.


#3

If you are re-selling a Suppliers item, why would it need to pass through a Production Order ?


#4

it does not have to be exclusive…I am thinking of using the very same mechanics behind the production order which allows you to use some of the raw material at your own leisure. I do not see why it has to be exclusive


#5

Bought for sale would rare and exceptions but I buy a product that is called A and you sell as B. How do I link them together and more importantly when they are enhanced with additional parts how can I make this work?


#6

If its the identical product, no changes, then its the one and same Inventory Item.
You don’t buy it as one inventory item (A) and sell it as a different inventory item (B).
You just record the purchase of A from the Supplier as B in your inventory items.

If B is enhanced with additional parts then use a Production Order to make Inventory Item C.


#7

yes this is how it is done. But like this each order needs a production order to keep up with the stock. I am looking for a way to link A +x+x+x = C but without having to create a production order for each of them. It is difficult to keep track of the movement of the items as they are done on order only. If from the inventory items page we could like the reference to relevant BOM then everytime it is sold it will count each item individually without to have to create a production order. The raw material comes in and is registered as such. the production order works for big stock items when they are manufactured (assembled) in big batches. On the basis of the made or demand it is an additional step everytime.


#8

Have you looked at under Settings - Inventory Kits.
This is where you combine items to make a group but each part of the group is an inventory item in its self.

EG lets say you run a book shop where each book is its own inventory item.
But you could sell the books as a set, Harry Potter, then you would select the Inventory Kit as the sales item, but each individual inventory item would be adjusted.


#9

Yes I have tried this, it could work to an extend. what is weird though an inventory kit is not listed as an inventory item thus you cannot have it listed under a specific control account ( asset).
Each items however are listed individually as inventory and can be controlled - control account + custom income and expense accounts.
When you do sell one inventory kit the relevant control account for the listed item will go down. The expense account will go up BUT the sales account will be listed as inventory sales although each items have been listed on specifics custom income account. That messing up and the figures and it is not actually consistent in comparison with the custom expense account vs custom income account.
Unless I am doing something wrong at some point.


#10

That is true, as an inventory kit is only created with the Sales Invoice, or in other words - inventory kits don’t sit on warehouse shelves as kits, they only sit on warehouse shelves as individual items. If you want kits as a shelf item then you need to use Production Orders.

Yes, that is a limitation of the Inventory Kit currently - can’t be nominated to a specific income account.

True, but the problem lies in that the Inventory Kit components could have different Custom Income Accounts so which income account would the sale of a single item (the kit) go to.

No, just facing processing limitations.
So currently you have the choice - Production Order v’s Inventory Kit


#11

The same problem applies for custom expense account. Since you have picked the items and since those items are set with specific custom income account each individual item should be seating in their respective relevant custom income account, even it they would be all over the place. But at least they will populating the fields they have been design to populate. That makes more sense to me at least.


#12

Yes, but how do you proportionate the selling price (Item one - $5, Item two -$8, Item 3 - $4 (total $17) > Kit price = $15, so is it $15 / 3 or some other calculation basis?

Then what if the kit is a marketing item - Buy two get one free - is the $15 divided by 2 or 3.
Once you attempt to proportion the kit selling price to Custom Income Accounts you open up a plethora of user required calculation variables.


#13

If you are using this way, meaning with a cheaper as a kit, it is causing troubles but still I would amend the prices to reflect the change or and have an inventory item that only be used for a kit.
In my case BOM listed as an inventory kit would not be cheaper as the kit is in fact the finished product.
What I am trying to do it is have a production order (perfect setup) but that links automatically with all products listed on the BOM. so when it is invoiced it goes get the data across instead of having to generate a production for virtually each line of every single invoices


#14

The price of an inventory kit is set separately, under Settings, from the price of its constituent components. The only thing Manager uses for the components is their current average cost when the inventory kit is sold.

You can sell groups of inventory items as separate inventory items or you can sell them as kits, but should not use both methods. And if you sell them as separate inventory items, you must make them with production orders (unless you buy them as a complete group).

This is exactly what happens. When you use an input inventory item in a BOM, it adds to the cost of the finished inventory item at its current average cost.

While many users have already requested the ability to store a BOM for future use, you can get most of the benefit by simply cloning an existing production order.

This is why inventory kits are useful. You enter the kit instead of having to create production order every time.