Azzam/Manufacturing Process

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Adempiere From Manufacturing to Sales

Basic Functionality

Goals:

1. Create Raw Material (RM) and Finished Goods
2. Create Bill of Material (BOM)
3. Setup Standard Cost for RM & Finished Goods
4. Make Sure that FG cost is correct
5. Create Manufacturing Order (MO)
6. Release Manufacturing Order
7. Issue Raw Material(RM) & Receive Finished Goods(FG)
8. Make Shipment to Customer
9. Make Sales Invoice
10. Integration to :
   10.a Material management
   10.b Purchasing
   10.c Accounting
11.Standard Costing :Hints & Tips

Prerequisites

1. Activating Libero Model in the Client window
2. Setting 'Standard Costing' in Accounting Schema
3. Manufacturing Resource :
   3.a Creating Resource Type
   3.b Setting up Manufacturing resources
4. Setting up Business Partners
   4.a Business Partner Group
   4.b Business Partner
5. Products :
   5.a Price List
   5.b Product Category
   5.c Product
   5.d Setting Standard Cost for Raw Materials
6. Manufacturing WorkFlow

Example

1. Finished Good (FG) :Computer Cabinet 27 U Rack Height,600mm width 800 mm Depth. Quantity is 5

2. Raw Material (RM)  :In this example, I am considering Raw Material Cost only.

                  2.a GI 2000 X 1000 X 2.0MM   Quantity is  2   Standard Cost : 10.5
                  2.b GLASS 1921 X 680 X 6MM   Quantity is  3   Standard Cost : 15.25
                  2.c DR-ADF-0008 HANDLE LOCK  Quantity is  1   Standard Cost : 1.75
                  2.d HEX NUT                  Quantity is  10  Standard Cost : 0.75
              Then , the cost of 1 FG is 2 x 10.5 + 3 x 15.25 + 1.75 + 10 x .75 = 76

3. Business Partners :

                   Vendor      : AlphaGarden Industries
                   Customer    : BetaGarden  Trading


Setting up the Prerequisites

Login as : GardenAdmin Role  : GardenWorld Admin

Make sure that the Organization is “*” in the creation of new entries :

Login Screen

For easier access to the windows, I have created the following shortcuts for them : Model Screen

Activating Libero Model

1. In the client window : From Menu->System Admin->Client Rules->Client :

  In Model Validation Classes field put :org.eevolution.model.LiberoValidator

Model Screen

Accounting Schema Setting

2.2. Setting 'Standard Costing' in Accounting Schema From Performance Analysis->Accounting Rules->Accounting Schema : Make sure that the Costing Method is Standard Costing.It is a must in Libero manufacturing to use Standard Costing. Model Screen

Creating Resource Type

3.a You need to create the at least one resource type ( only once). In GardenAdim we have default resource types . I will use the Plants Resource with the following settings : From Manufacturing management -> Engineering Management -> Resource Manufacturing -> Resource Type Put Working Time and Working Days . Tick Single Assignment Only Model Screen

Setting up Manufacturing resources

3.b From Manufacturing management -> Engineering Management -> Resource Manufacturing -> Manufacturing Resource. Manufacturing Resource is anything needed in the production plan. You can identify the availability of it. It can be Plants, Production lines, Work Centers and Work Stations. If you select Manufacturing Resource Type as Plant , then enter Planning Horizon 120.

Model Screen

Setting up Business Partners(BP)

4. Create Business Partners Groups: 1. Customer 2.Vendor We define BP group which suits your needs. In our example we just created two BP group; Customer and Vendor. Here, you could alter the accounting default value for each BP group ( if required ) From Menu->Partner Relations->Business Partner Rules ->Business Partner Group The Business Partner Group window allows you to define the accounting parameters at a group level. If you define the accounting parameters for a group any Business Partner entered using this group will have these accounting parameters automatically populated. You can then make any modifications necessary at the Business Partner level Model Screen

BP in Grid window

We had the following Business Partners: (Make sure that Default is only for one BP ) Model Screen


Creating Business Partners

To create a new BP from Menu->Business partner rules -> Business Partner

We will fill the must fields .

To Create a new vendor : Press the icon New. Enter the Search Key : AlphaGarden ...example . Hint : It is advised not to use spaces or special characters in searchkey.

                  Name : Garden Industries
Business Partner Group : Vendors
  Press Save Button.
Select the Tab Vendor.Tick the field Vendor and Save.
Select the Tab Location : Press New Button. from the Address field fill the address and save.

Model Screen

Creating Customers

From the same window Business Partners : 
       Enter Search Key : in our example BetaGarden
                    Name: BetaGarden Trading
  Business Partner Group: as Standard Customers
  Select the Tab “Customers “” and Tick the field “Customer “and enter Credit Limit.
  Select the Location Tab and enter Address ( you can leave it blank ) and save : This is must for customers.

Products

We will create Price Lists, Product Categories and Products.

Price Lists

We create 2 types of price list: Purchase PL: Purchase Price List 2010 and Sales PL: Sales Price List 2010. We had chosen Purchase PL as our default price list. Ensure that only one price list is default.For Sales Price List tick the field 'Sales Price List'.For each price list you need to define the price list version from the 'Version' tab.I have put the Purchase Price List as Default . From Menu->Material Management->Material Management Rules->Price List

Model Screen

In GridToggle mode we will have the following price lists

Model Screen

Product Category: (RM) & (FG)

We will create two categories: Raw Materials (RM) and Finished Goods ( FG) From Menu->Material Management->Material Management rules -> Product category Product Screen

Click the Accounting Tab :Since we did not setup any value in the costing method and costing level at accounting tab, then ADempiere system will read costing method and costing level at the Accounting Schema configuration.( It should be Standard Costing).Do not change the Accounting Method. We can have a look on the accounting defaults especially under Manufacturing title.

Product Screen

Creating Products: (RM) & (FG)

From Menu->Material Management->Material Management rules -> Product

The Product window allows you to define all Products used by an Organization like :
        - Sold to customers,
        - Purchased  from Vendor
        - Used in the manufacture of Finished Goods
 During creating this products, just ensure these things 
           - Set proper product Category
           - Mark Sold field for FG products
           - Mark Purchase field for RM products
           - Mark Stocked for FG & RM
           - Set purchasing information for RM products (Purchasing tab)
           - Set Price Lists for all of products (FG & RM). 
           - Do not alter any accounting setting.But, you are free to change .
Let's Create the Raw Materials :
         From Product Tab  - Press New Record Button
                            - Type Search Key
                            - Type Name
                            - Set Product Category : Raw Material (RM)
                            - Stocked   : Ticked.                 
                            - Purchased :Ticked.                 
                            - Sold      : Un Ticked.                 
                              Save
        From Purchasing Tab - Press New Button In Business Partner enter The vendor ( here AlphaGarden Industries)
                            - In List Price enter 9
         From Price Tab     - In Price List Version (Purchase Price List 2010)
                             

Let's create all the Raw Materials :

                 1 GI 2000 X 1000 X 2.0MM   Quantity is  2   Standard Cost : 10.5      List Price : 9
                 2 GLASS 1921 X 680 X 6MM   Quantity is  3   Standard Cost : 15.25     List Price : 14
                 3 DR-ADF-0008 HANDLE LOCK  Quantity is  1   Standard Cost : 1.75      List Price : 1
                 4 HEX NUT                  Quantity is  10  Standard Cost : 0.75      List Price : 0.50

The list price is less than the standard cost for the raw materials. We will see how Adempiere works with this case.

To Create The finished Good :Computer Cabinet 27 U Rack Height,600mm width 800 mm Depth

               From Product - Tab  Press New Record Button
                            - Type Search Key
                            - Type Name :Computer Cabinet 27 U Rack Height,600mm width 800 mm Depth
                            - Set Product Category : Finished Goods(FG)
                            - Stocked   : Ticked.                 
                            - Purchased : Un Ticked.                 
                            - Sold      : Ticked.                 
                              Save
          From Price Tab     - In Price List Version (Sales Price List 2010)

Setting up Standard Costing for Raw Material (RM)

From Menu -> Performance analysis -> Costing -> Product costs

     - Choose the Raw Material item then switch to product costs Tab then set the cost.
     - Select the Cost Element 'Material'
     - Set your cost in 'Current Cost Price' field.
     - Do this operation for all raw materials.
     Hint : To access this window make sure that 'Show Accounting Tab' is set ( from Tools->Preferences).

ProductCost Screen

Create Bill of Material (BOM)

From Menu -> Manufacturing Management -> Engineering Management -> Bill of Material & Formulas -> Bill of Materials & Formula In the top window of the BOM ;

  -   Press new Button.
  -   Select the finished good.
  -   Type Valid from Date
  -   Valid to : you can leave it empty
  -   BOM Type = Current Active
  -   BOM Use = Manufacturing.
  Press Save Button.


In the bottom window : enter the Raw material & Quantity.

  -   Then create your Raw Material by pressing the Icon New.
  -   Select the Product (RM) . 
  -   Component Type = Component.

Make sure that is ‘Critical Component ‘is selected. Note: Valid from: put old date.

           Valid to: Leave it empty.
      Enter the Quantity of this Raw Material
      Issue Method: Issue.
                    Press Save Icon.

bom top Screen

      Repeat step 2 for all Raw Materials for that FG.

bom BOTTOM Screen

Verify Bill of Material

Return to product window: to verify the Bill of Material for the product open the product (FG) window [ By Zooming the field Product] then make refresh after that you can click on ‘Verify BOM ‘ button. ‘Ok’ will appear at the left bottom corner. Then, notice that Verify is selected .

Transfer all Raw Material Cost into Finished Goods

Manufacturing Management -> Standard Costing Management -> Bill of Material & Formula Cost Roll-UP.

Run this process, this process will calculate the total cost for the finish product.This Process allow integrate Bill of Material & Formula Cost Element Cost = Element Cost this level + Element Cost this low level Total BOM Cost = Sum every Element Cost

  - Pick an option from Cost Type field (only 1 option for now)
  - ‘Costing Method’ must be standard.
  - ‘Product ‘ : Select the finished good product.

bomcost rollup BOTTOM Screen

Check the finished good total cost in the product costs window

Now Let's check the cost of the finished good .

Performance analysis -> Costing -> Product costs Select the Finished Product. Switch to the Tab 'Product Cost' Select the Cost Element 'Material' Look at the field 'Current Cost Price Lower Level ' . What's the value ? Great it is 76. Finished Goods PC BOTTOM Screen

Cost BOM Multi Level Preview

We have a fantastic report for BOM Manufacturing Management -> Standard Costing Management ->Cost BOM Multi Level Review Finished Goods PC BOTTOM Screen

Bill of Material Info.

From Menu -> Manufacturing Management -> Engineering Management -> Bill of Material & Formulas -> BOM & Formula Info BOM INFO PC BOTTOM Screen

What are the Accounts in the item (FG)?

From 'Product' window , select the finished good. After creating the BOM for the finished good item , we can notice that the field ( read only ) Bill of 'Materials is selected'.Also, switch to the 'Accounting' tab and have a look at the accounts under the title 'Manufacturing' Product Accounting BOTTOM Screen

Manufacturing Planning

Setup Manufacturing Workflow

From Menu->manufacturing Management->Manufacturing Workflow->Manufacturing Workflows This workflow is required during executing production activities. In the main window  : Manufacturing Workflows:

 Enter :Search Key : Here type the same search key for the FG in the BOM ( ComputerCabinet27URackH600mm800mmD)
        Name       : Manufacturing Name  ( ComputerCabinet27URackH600mm800mmD)
WorkFlow Type      : Manufacturing
Process Type       : Plant
Publication Status :Released
Author             : Any name 
Duration           : 30 ( insure you put proper time frame ) 
Duration Unit      : Minute
Yield              : 100
Leave start node. It will be entered after creating activities.

work flow  BOTTOM Screen Switch to 'Activity Tab'

Search Key : Assembly ( you can enter any search key)
  Duration : 30 ( I am using one activity )

WF Activity BOTTOM Screen

Creating Sales Order

From Menu->Quote to Invoice -> Sales Orders -> Sale Order Make sure you put : Document Target Type : Standard Order

      Select Price List :( In our example ) : Sales Price List 2010

Sales Order BOTTOM Screen Select the tab 'Order Line'. In 'Product' field Add the finished good to be sold. In 'Quantity' : 5

  'Price'    : 110
   Save.

Sales Order BOTTOM Screen Select 'Order' tab. Complete & Post.

Create Product Planning

Prior executing MRP activities, we need to setup product data planning. From Menu -> Manufacturing Management -> Planning Management -> Product Planning -> Create Product Planning. You need to set this information :

 - Product Category : Finished Goods ( FG)
 - Warehouse : Fertilizer  ( in our example ) 
 - Resource  : Fertilizer Plant ( in our example )
 - Create Plan : Mark it
 - Is MPS : Mark it 
 - WorkFlow :ComputerCabinet27URackH600mm800mmD ( in our example )
 - Order Quantity : 5
 - Yield    : 100
 - Order Policy :Period Order Quantity
 - Order Period : 1

Hint : You need to run this process two times. First for FG, second for RM Product Planning BOTTOM Screen

Review Product Planning Data

From Menu -> Manufacturing Management -> Planning Management -> Product Planning -> Product Planning Data We need to review the following information :

 - Resource
 - WorkFlow
 - Warehouse 
 - Planner
 - Is MPS
 - Create Plan
 - Order Policy
 - Order Qty
 - Yield
 - Order Period

Product Planning BOTTOM Screen

Calculate Material Plan

From Menu -> Manufacturing Management -> Planning Management -> MRP -> Calculate Material Plan Calc. MRP.  BOTTOM Screen After executing Hint : Leave 'Required Calculate DRP' Blank . You will find 1 MO and 4 Requisitions are created. What is next ? We will complete the purchase cycle.

Requisition-to-Invoice