How do I create a bill of materials and a work order?

Manufacturing in the system is two steps: the bill of materials says “what is this product made of?”, and then the work order says “make this many of it now”.

The bill of materials

1. Open Manufacturing → Bills of materials — Figure 1 — then Add.
2. Choose the finished product — Figure 2 — an item that exists in stock; create it first if it does not.
3. Add the components and the quantity of each per single unit of the product — this is the crucial point: the quantity is per unit, not per batch.
4. Enter the labour cost and the overhead per unit, and a markup if you want the system to suggest a selling price.
5. Save. One product can have several bills in different versions, and only the active one is used.

The work order

1. Open Work orders — Figure 3 — then New order — Figure 4.
2. Choose the bill of materials, the quantity, and the warehouse; the system multiplies the per-unit components by the quantity and shows what will be drawn.
3. Press Start, and the components leave stock.
4. When it is finished press Complete, and the finished product enters stock at its computed cost: component value + labour + overhead.

Notes

• Do not start a work order when the component balance is short; running out stops you halfway and leaves an order hanging.
• Change a bill of materials by creating a new version rather than editing the old one; the cost of previous orders is built on it.
• Do not forget labour and overhead; leaving them at zero makes the product look cheaper than it is and corrupts the pricing decision.