Manufacturing Module

Production planning, bill of materials, and manufacturing execution in iDempiere

The Manufacturing module in iDempiere provides comprehensive production management capabilities, from material planning through production execution and cost tracking.

Overview

iDempiere’s manufacturing functionality supports make-to-stock and make-to-order production scenarios with integrated bill of materials (BOM), production workflows, capacity planning, and cost collection. The system is built on the proven LibreoPlan/E-Evolution manufacturing engine.

Bill of Materials

Define product structures and component relationships

Production Planning

Plan material requirements and production schedules

Production Orders

Execute manufacturing orders and track progress

Cost Tracking

Collect actual costs and analyze variances

Bill of Materials (BOM)

Define product structures and manufacturing recipes.

BOM Structure

A Bill of Materials defines the components and quantities needed to produce a finished product:

• Parent Product - The finished item being produced
• Component Products - Raw materials and subassemblies required
• Component Quantities - Amount of each component per parent unit
• BOM Type - Make-to-stock, make-to-order, or mixed
• BOM Levels - Support for multi-level assemblies and subassemblies

Creating Bills of Materials

1. Navigate to Product BOM

   Go to Manufacturing Management > Product BOM & Formula

2. Select Parent Product

   Choose the finished product you’re defining the BOM for

3. Set BOM Type

   Select the BOM type (current active, alternative, or variant)

4. Add Component Lines

   In the BOM Line tab, add each component product with its quantity

5. Define Operations

   Link components to specific manufacturing operations if using workflows

6. Set Validity Dates

   Specify effective date range for this BOM version

BOM Features

• Multi-Level BOMs - Components can themselves have BOMs for subassemblies
• BOM Versions - Maintain historical and future BOM configurations
• Component Substitutes - Define alternative components
• Scrap Factors - Account for normal production waste
• Lead Time Offsets - Schedule component availability before operation
• Component Type - Co-products, by-products, and phantom assemblies

Use phantom assemblies for subassemblies that are never stocked. The system will automatically explode phantom BOMs to procure raw materials directly.

Manufacturing Workflows

Define production routings and operations.

Workflow Structure

Manufacturing workflows define the sequence of operations:

• Workflow - Complete production process for a product
• Nodes - Individual operations or process steps
• Node Sequence - Order of operations with dependencies
• Resources - Equipment, labor, or facilities required
• Duration - Setup time, run time per unit, and teardown time

Workflow Configuration

1. Create Workflow

   Navigate to Manufacturing Management > Product Workflow

2. Define Operations

   Add workflow nodes for each manufacturing operation

3. Sequence Operations

   Connect nodes to define process flow and dependencies

4. Assign Resources

   Specify equipment and labor required for each operation

5. Set Durations

   Enter setup time, run rate, and queue times

6. Link to BOM

   Associate workflow with product BOM for complete production definition

Operation Types

• Make - Manufacturing or assembly operation
• Inspect - Quality control checkpoint
• Setup - Machine or tooling preparation
• Queue - Waiting time between operations
• Move - Transportation between work centers

Resource Planning

Define manufacturing resources:

• Work Centers - Production areas or departments
• Machines - Equipment with capacity and availability
• Labor - Workforce skills and capacity
• Tooling - Tools and fixtures required
• Calendars - Working hours and availability schedules

Workflows enable accurate capacity planning, production scheduling, and labor tracking. Define realistic operation times for accurate lead time calculations.

Production Planning

Plan material requirements and production schedules.

Material Requirements Planning (MRP)

MRP calculates component requirements based on demand:

1. Define Demand

   Demand comes from sales orders, forecasts, or safety stock levels

2. Run MRP Process

   Execute MRP process to calculate requirements

3. Review Recommendations

   MRP generates manufacturing orders and purchase requisitions

4. Adjust Plans

   Modify quantities, dates, or suppliers as needed

5. Create Orders

   Convert MRP recommendations to production and purchase orders

MRP Calculation

The MRP engine considers:

• Gross Requirements - Total demand from all sources
• On-Hand Inventory - Current stock available
• Scheduled Receipts - Open purchase and production orders
• Lead Times - Manufacturing and procurement lead times
• Lot Sizing - Minimum, maximum, and multiple order quantities
• Safety Stock - Buffer inventory levels

Planning Parameters

Configure per product:

• Planning Method - MRP, reorder point, or none
• Lead Time - Days to manufacture or procure
• Lot Size - EOQ, fixed lot, lot-for-lot, or period order quantity
• Safety Stock - Minimum inventory buffer
• Order Policy - Make vs. buy decisions
• Planning Horizon - How far ahead to plan

MRP recalculates all requirements each run. Ensure data accuracy in BOMs, inventory, and open orders before running MRP to avoid incorrect recommendations.

Production Orders

Execute manufacturing with production order management.

Production Order Lifecycle

1. Create Production Order

   Navigate to Manufacturing Order and create new order for product quantity

2. Schedule Production

   Set start date and system calculates finish date based on BOM and workflow

3. Reserve Components

   System reserves component inventory for the production order

4. Issue Materials

   Issue components from warehouse to production floor

5. Execute Operations

   Perform manufacturing operations and record progress

6. Receive Finished Goods

   Receive completed products into finished goods inventory

7. Close Order

   Complete production order and analyze costs

Order Types

• Standard Production Order - Regular manufacturing execution
• Rework Order - Repair or rework defective products
• Maintenance Order - Equipment repair or preventive maintenance
• Disassembly Order - Break down assemblies into components

Material Issue Methods

• Manual Issue - Explicitly issue components with transactions
• Backflush - Automatically consume materials when production completes
• Floor Stock - Components consumed without individual tracking

Production Order Features

• Multi-Level Orders - Automatic creation of orders for subassemblies
• Order Splitting - Divide large orders into multiple lots
• Order Combining - Combine small orders for efficiency
• Alternative BOMs - Use different BOMs based on availability
• Resource Loading - Schedule operations based on resource capacity

Use backflushing for high-volume, low-cost components to reduce transaction overhead. Reserve manual issuing for expensive or closely-controlled materials.

Manufacturing Execution

Track production progress and collect actual data.

Shop Floor Control

Monitor and control production activities:

• Work Order Release - Release orders to production floor
• Operation Reporting - Report completion of individual operations
• Quantity Reporting - Report produced quantities and scrap
• Labor Reporting - Track labor hours by operation
• Material Consumption - Record actual component usage

Cost Collectors

Capture actual production costs:

1. Create Cost Collector

   System generates cost collectors for production order operations

2. Report Quantities

   Enter produced quantity, scrap, and rejected units

3. Record Labor

   Log labor hours and operators

4. Report Materials

   Confirm materials consumed (if not backflushed)

5. Process Collector

   Process to create accounting entries and update costs

Actual Data Collection

• Produced Quantities - Finished goods completed
• Scrap Quantities - Normal and abnormal waste
• Labor Hours - Direct and indirect labor time
• Machine Time - Equipment utilization
• Material Variances - Actual vs. standard component usage

Quality Control

Integrate quality management:

• Inspection Points - Define where inspections occur in workflow
• Quality Tests - Record test results and measurements
• Accept/Reject Decisions - Approve or reject production lots
• Non-Conformance - Track quality issues and root causes
• Rework Routing - Direct rejected items to rework operations

Cost collectors link manufacturing execution to financial accounting, enabling accurate job costing and variance analysis.

Manufacturing Costing

Track production costs and analyze variances.

Cost Elements

Manufacturing costs comprise:

• Material Costs - Raw materials and components consumed
• Labor Costs - Direct labor for production operations
• Overhead - Allocated manufacturing overhead
• Outside Processing - Subcontracted operations
• Scrap Costs - Cost of normal and abnormal waste

Cost Calculation Methods

• Standard Costing - Compare actual costs to predetermined standards
• Actual Costing - Calculate actual cost per production run
• Activity-Based Costing - Allocate overhead based on cost drivers

Variance Analysis

Identify and analyze production variances:

• Material Variance - Difference in material quantity or price
• Labor Variance - Difference in labor hours or rate
• Overhead Variance - Over or under-absorbed overhead
• Scrap Variance - Waste exceeding standard allowances
• Efficiency Variance - Production time vs. standard time

Cost Reporting

Job Cost Report

Detailed costs by production order

Cost Variance Report

Actual vs. standard cost analysis

Production Efficiency

Labor and machine utilization metrics

Scrap Analysis

Waste tracking by product and operation

Review variance reports regularly to identify process improvements, update standards, and investigate abnormal costs.

Capacity Planning

Plan and optimize resource utilization.

Capacity Requirements Planning (CRP)

Validate production schedule against capacity:

• Load Analysis - Calculate resource requirements by period
• Capacity vs. Load - Compare available capacity to planned load
• Bottleneck Identification - Find constrained resources
• What-If Scenarios - Model different production scenarios
• Capacity Adjustments - Plan overtime, shifts, or equipment additions

Resource Scheduling

• Finite Scheduling - Schedule within available capacity
• Infinite Scheduling - Schedule assuming unlimited capacity
• Priority Scheduling - Sequence based on due dates or priorities
• Optimization - Minimize changeovers or maximize throughput

Work Center Management

• Calendars - Define working hours and shifts
• Capacity - Set available hours per period
• Efficiency - Factor in resource utilization rates
• Queue Times - Model waiting time between operations
• Maintenance Windows - Schedule preventive maintenance

Advanced Manufacturing Features

Configure-to-Order (CTO)

Manufacture customized products:

• Product Configurator - Customer selects options and features
• Dynamic BOM - Generate BOM based on configuration
• Dynamic Workflow - Adapt operations to selected options
• Custom Pricing - Calculate price from configuration

By-Products and Co-Products

Handle multiple outputs from single production:

• Co-Products - Multiple primary products from one process
• By-Products - Secondary outputs with value
• Cost Allocation - Distribute costs across outputs

Kanban Manufacturing

Implement pull-based production:

• Kanban Squares - Visual inventory management
• Demand Pull - Produce based on consumption
• Replenishment Rules - Automatic order generation
• Container Management - Track containers through system

Subcontracting

Manage outside processing:

• Subcontract Orders - Send materials to subcontractors
• Material Transfer - Track materials at subcontractor
• Outside Processing - Receive processed materials back
• Subcontract Invoicing - Match invoices to processed quantities

Subcontracting in iDempiere uses distribution orders to transfer materials to the subcontractor and production orders to receive finished goods.

Production Reporting

Monitor manufacturing performance.

Key Performance Indicators

• Production Volume - Units produced by period
• Throughput - Production rate and capacity utilization
• Yield Rate - Good units as percentage of total production
• First Pass Yield - Units passing without rework
• Scrap Rate - Waste as percentage of production
• On-Time Completion - Orders completed by due date
• Order Lead Time - Average time from order to completion

Manufacturing Reports

• Production Schedule - Planned production by date and resource
• Work in Process - Open production orders and status
• Material Usage - Component consumption vs. standard
• Labor Efficiency - Actual vs. standard labor hours
• Equipment Utilization - Machine usage and downtime
• Quality Metrics - Defect rates and quality trends

Best Practices

BOM Management

• Maintain accurate and current BOMs for all manufactured products
• Use engineering change orders to control BOM modifications
• Review BOMs quarterly for cost reduction opportunities
• Implement effectivity dates for planned BOM changes
• Document component substitutes for supply chain flexibility

Production Planning

• Run MRP at least weekly to maintain current plans
• Review MRP recommendations before creating orders
• Set realistic lead times based on actual performance
• Use safety stock strategically for critical components
• Plan capacity before committing to customer delivery dates

Shop Floor Execution

• Close completed production orders promptly
• Report production quantities daily for accurate inventory
• Investigate and document all scrap and rework
• Use backflushing only for low-value bulk materials
• Train operators on proper cost collector reporting

Cost Control

• Review cost variances weekly and investigate significant deviations
• Update standard costs at least annually
• Track labor efficiency by work center
• Analyze scrap trends to identify quality issues
• Calculate total cost of quality including rework and inspection

Related Modules

Inventory

Manage raw materials and finished goods

Purchasing

Procure materials for production

Sales

Fulfill make-to-order customer requests

Accounting

Track work in process and manufacturing costs