SAP Business One 9.0 Core Production Module Applications

SAP Business One 9.0’s Production Module allows small and medium size businesses owners to create and maintain the following within their SAP Business One system.

·         Bill of Material (BOM) which outlines the component items and their corresponding quantities that make up the finished good parent item.

·         Production Orders that contain the assembly and planning instructions in putting together the production item. This document tracks all the materials transactions and cost involved in the process as well as additional cost like labor and overhead.

·         Finished Good (Parent Item) the end item of the production process comprised b the component items. Figure 1 below shows Code=A02001 representing a Standard 40×48 OCC pallet

·         Component Item (Child items) component items are used to complete the finished items. These can include the physical component items for the raw materials as well as labor and overhead non- inventory items to capture the cost of labor and overhead accordingly. Examples as shown in the print screen that follows include raw material item code like A02200 for OCC raw material, L02730 for labor and L09000 for overhead for benefits and taxes respectively.

How to setup the Bill of Material (BOM) in SAP Business One 9.0

Figure 1. Displays the Listing of the BOM for parent item code A02001. Take note that Standard Production BOM will have a default BOM type =Production

1)      In the Header enter the Parent Item (with quantity). From the print screen above in the field Production No. the item Code=A02001 for a quantity of 1 is setup at the Header Level of the Bill of Materials.

2)      In the Row level the component items (required raw physical material quantity as well as cost items for labor and overhead to complete the Parent item) are choosen. The Item No column list the items needed to complete the parent and the quantity column represent the quantity needed to complete 1 unit of the Parent item at the Header level.

3)      After adding the details for the BOM click on Add Button in the bottom left side of the form. The Bill of Material will now then be added to the SAP Business One 9.0 Database.

SAP Business One supports the following types of production orders:

·         Standard:  used for regular production orders. Components are copied from the Item Bill of Material (BOM)

·         Special:  used to produce items or perform activities on the production floor that is not based from a Standard BOM

·         Disassembly:  used to report the disassembly of an item with a Production BOM. Components are copied from the item BOM.

How to Start Production in SAP Business One 9.0

Pre-requisites: To be able to start a production order for a standard make item you must have completed the setup of the BOM for you parent item. Note that if you want to issue your raw materials manually (batch and serial contolled items have automatic manual issue methods) from Figure 1 above at the row level you can set the Issue Method of a specific row to manual for the components that you need or you want to issue manually.

1)      Create the Production Order

1.1)Select the Finished Good item (Product No.) from the list. The default BOM set for this item will display in the production order row level and populate the planned quantity fields of the required quantity of the components needed to complete the planned quantity of the Parent item.

1.2)Select the Production Order type.

a)      Standard. As describe above you will choose this option when all the components necessary for your production order process is directly coming from the Standard BOM with BOM Type=Production. The default BOM for the parent item will automatically display in the production order.

Figure 2. Displays a Standard Type Production Order for Item Code=A02001 (Standard BOM in Place)


b)      Special. If the components of the Parent Item required by your Customers are not fixed or set then it will not be practical to setup many BOM to try to anticipate the variant needed to meet their requirements. This will be the scenario that the Special Type of production will be handy for an SAP Business One user. For Special Type Production orders the components are manually selected at the same time of the Production Order is getting created.

Figure 3. Displays a Special Type Production Order for Item Code =A02002 where no BOM is setup for this Item. The components in the Special Production Order are as per Customer Special Requirements. The BOM is not setup in the SAP Business One Database but are selected and added by the production planner by the time the production Order is created. Note that you can also control the issue method here in the production order if necessary.

c)       Disassembly. This option can be utilize when we want to separate into individual physical parts the assembled Finished Goods Item. It might be necessary to disassemble a Parent item because you need to sell the component items as individual part. Not ideal but possible. Another scenario that this can come into play will be when an Assembled Parent part that was returned by the Customer due to some minor damage affecting one of the components parts. So instead of discarding the entire item, it could be disassembled into the different parts and then return to stock then do an inventory transfer of the damage items into a damage bin or warehouse and the good items into the regular stock or component warehouse or bin.

2)      Enter the planned Quantity i.e. the planned production quantity              of the parent item.

3)      After filling the Production Order details click on the add button to store the Production Order in the SAP Business One 9.0 Database.

How to Complete Processing of Production orders in SAP Business One 9.0

Before we proceed with the details of the of how to undertake the process of completing the production orders in SAP Business One 9.0, let’s explore the implication of the concepts of issued method in the production order processing.

·         Manual. This option requires the user a mandatory step to manually issue the Raw materials to the production order. The production steps then are:

a)      Production Order

b)      Issue for Production

c)       Receipt for Production

d)      Close

·         Back-flush. For this method, the user cannot manually issue raw materials to the production order. When the issue method is back-flush the issue for production step will not be necessary. The production steps for this method are:

a)      Production Order

b)      Receipt from Production

c)       Close

The 5 simple steps to complete production in SAP Business One 9.0

1)      Create and Add the Production Order

2)      Change the Production Order Status from Planned to Released

3)      Issue to Production

4)      Receipt from Production

5)      Changed the Production Order Status from Released to Closed

Create and Add Production Order

                The creation of the production order has been explained in details on the previous section.

Figure 4. above Displays a newly created Production order for  item Code=A02001 for a planned production qty=100. Observe that after successfully creating and adding the production order, the initial status of the production order is Planned.

Change the Production Order Status from Planned to Release and Update the Production Order

Figure 5.  Displays the Production Order Status getting updated.

It is only after changing the status to released that it would be possible to process the production order moving forward. Once the production order status is in release mode then it is at this point that the production order is actually release to the shop floor for production.

Issue for Production


Figure 6. The production order is in the process of the material being issued to production. Take note that only manually issued components in the production order can be manually issued by the user.

The issue for production can be undertaken by right clicking in the window of the release production order and selecting “Issue components” option from the list. Take note in Figure 6 that the issued column is still empty.

Figure 7. Issue for Production Display.  Here if required the user can change the quantity in “Issue for Production Order.” Click on the Add Button at the bottom left side of the window of issue for Production form to complete the process.

Figure 8. After the issue for production step is completed the issued column for the physical raw material Items are now populated.

Receipt from Production

Figure 9. After the issue for Production you are now ready to report the completion of the finished goods.

Right click on the Production Order window you want to process and Select “Report Completion” option from the list. Observe that the completed quantity is still blank. This is before the receipt from production.

Figure 10. In this window you can enter complete and reject qty of finished goods. In this instance I am reporting all complete to WH=01 and none rejected.

In instances where you have rejected qty, you can split the qty between complete qty and reject qty (an ideal scenario is where the sum total of the two qty is the production order qty). Then to separate the rejected qty you can setup a warehouse dedicated to it and report the rejected qty to that warehouse during the receipt from Production process step.  At the end of the month the accounting department can decide what to do with it. It can be scrapped thru inventory count or written off accordingly.

Figure 11. After the receipt form Production step is completed the Completed qty field is now populated by the qty we reported completed and in this case a 100.

Close the Production Order

Figure 12. Closing the Production Order

You can close the production order by changing the released status to close. Once close you can change the production order anymore. Update the Production Order status by clicking on the Update button.

For more information on SAP Business One, check out What is SAP Business One 9.0, or feel free to contact Clients First Business Solutions at 888) 239-2818.  For more information on SAP Business One Sales, Support, and Services, you may also contact Clients First SAP Business One Center of Excellence via the web at hpp://

2019-01-16T11:23:12+00:00 April 16th, 2014|SAP Business One|Comments Off on SAP Business One 9.0 Core Production Module Applications