Exploring the Production Process in SAP Business One

In SAP Business One we can manage the company's entire production processes.

In addition to items, we can define and manage different resources, such as machinery usage hours and employees labor time, that are necessary for the production process.

In the Bill of Material document, we indicate the components and resources needed to manufacture the finished product.

Then, to start the production process, we issue a Production Order document, based on the Bill of Materials, and release the components from the warehouse to the shop floor.

When the production process is completed, the finished product is added to inventory.

Note that this is the main production process concept in SAP Business One, but not the only one.

The resource is defined as master data in the system. There are two main types of resources:

• Machine type - A resource linked to a fixed asset, taken from the Fixed Assets Master Data list
• Labor type - A resource linked to an employee, taken from the Employees Master Data list.

When a bill of materials is produced, a machine is often needed in a production process and an employee may be needed as well, for example, to operate this machine.

In SAP Business One, we can plan and define a daily capacity for the resources. By monitoring this capacity, we can optimize the production plan and avoid bottlenecks.

Let us try to understand the Bill of Materials concept by using the following example:To manufacture an engraved wooden door, we need two items: a plain wooden door and a handle.

In addition, we need to engrave a decoration pattern. To do this, we need two resources: a lathe machine and a machine operator employee.

These items and resources combine the decorative wooden door bill of materials.

In real life production, bills of materials often have several levels. In our example, the wooden door component can also have its own bill of materials.

Note that the finished products are also defined as items (master data) in the system.

To start a production process, this Bill of Materials is copied to a Production Order.

A Production Order is a command to produce (or repair) a production item.

A Bill of Materials is copied into the Production Order document (manually or in an automatic process). Then, the needed quantity of the finished good is entered, along with the required due date of production and other relevant data.

Bill of materials can be defined with routing. This bill of materials contains different stages in production. Each stage has its own items and resources and calculates its own dates. There can be a dependency between stage date calculations, in which a subsequent stage begins when the immediately preceding stage ends. The calculation of Total Days per stage is done according to the available capacity of the resources in each individual stage.

Like every other bill of materials, a bill of materials with routing is copied to a production order. Then, each stage in the production order can be separately issued, transferred, or received from production.

Here are some key points to take away from this session.

• The production process starts by creating a production order and releasing it to production.
• The production order is based on the bill of materials.
• The bill of materials is composed of items and resources.
• There are two main types of resources: labor and machine.