New and Improved Production Module in SAP Business One

By Dattatreya R.Kulkarni Posted March 10, 2016 In Production

New and improved Production module

Till version 9.0 of Sap Business One, the bill of material (BOM) allowed the user to maintain only items as ‘child’ components. This allowed the user to:

1. Maintain information about planned or expected consumption of child items to produce the parent item
2. Transfer this information to the production order automatically and further allowing the user to update actual consumption (for manually issued items)
3. Track variance in material consumed or produced, thus helping the user to extract a yield report

Whereas this did serve the purpose of bringing more accountability towards material consumption, it did pose a limitation when it came to consumption of non-item inputs consumed during the production process.

The SAP Business One 9.1 release includes a new production resources module, enhanced bill of materials and new production process options. With SAP Business One version 9.1 users can maintain the following two additional types of inputs (in addition to ‘item’) as child components in the BOM.

1. Resources
2. Text

What is a Resource?

A resource is defined as a commodity, machine, labor, or other asset used to produce goods and services. As opposed to items, resources have capacity available throughout a period of time which can be consumed in a production process. Resources (resource capacity) can therefore be assigned to production orders. Resource capacity is always viewed within a period of time called “capacity period”. Consumption of resources in a production process contributes to the overall production costs and can be split into underlying cost elements for further accounting purposes.

To enable this, resource master needs to be maintained which will capture relevant date for each resource (machine or labor). Resource master data is quite exhaustive and helps you not only to maintain information about its running cost, but also about its planned capacity, planning data (availability of machine), integrate it with asset master & so on.

During BOM creation you need to maintain the standard time required for completing the manufacturing process of the parent item for the quantity defined in the BOM header.

During the actual production run, user can accept figures proposed by the system (as per BOM) or edit it to reflect excess or shorter usage of the resource. Accordingly, the cost of the resource gets calculated and rolled up on the parent product.

Advantages of Resource Module

This new module will assist with resource capacity planning. Users can now capture machine, labour and other resources and costs against the manufacturing process. Resource capacity can be allocated. A new column allows the user to record consumption of resources and items beyond the planned consumption. This will greatly assist production planners to identity available production capacity and bottlenecks whilst ensuring that resource / labour costs are correctly allocated to the finished product.

Text

You can use the text type input, if you want to store certain written instructions in the BOM itself for any process associated with the production process of the parent item. You can also insert predefined texts here.

Additional Quantity Column

Additional quantity is added to the total planned quantity of items and resources and to the total planned time in the production order, regardless of the produced quantity of the parent item. An example of usage of this column will be enter say 15 minutes in the additional quantity column to reflect the machine set-up time required to start the production process. This set-up time will then be included in the cost of the parent item irrespective of the quantity of the parent item produced.

Conclusion

Capabilities of the production module has been improved significantly in SAP Business One 9.1 which makes the solution even more suitable to handle production and product costing processes in the system. We expect the customers to reap benefits from this enhancement.