Manufacturing: bills of materials and production runs

If you make what you sell — whether that is a furniture workshop, a bakery, a compounding pharmacy or an assembly line — a bill of materials is how the system knows what a finished product actually costs.

The bill of materials

1. Create a bill of materials for the finished product and set the batch size it produces.
2. Add each component and the quantity a batch needs.
3. Add a scrap allowance where material is genuinely lost in the making — powder left in the mortar, offcuts, labels that print crooked.
4. MerxumOS totals the batch from what those components actually cost and divides by the batch size to give a true unit cost.

Producing

A production order takes a bill of materials and scales it to the quantity you plan to make. Completing it consumes the components from stock and puts the finished goods on, in a single step that either works or does not — you cannot end up with the components gone and nothing produced. If a component is short it tells you which one and refuses.

Knowing what to buy

Material planning looks across the production orders you have queued, compares them with what is on hand and what is already on order from suppliers, and tells you what is short. From there you can raise the purchase order directly.