The Finished Goods module forms part of the production functionality in DEAR Inventory. It helps you keep track of the use of raw materials as well as associated costs throughout the manufacturing process. The finished goods function can only be used with items that have a Bill of Materials showing their component parts.
Create an item with Bill of Materials
The assembly function can only be used for items that have a Bill of Materials showing their component parts. If you already have products with Bill of Materials, skip to the next step.
NOTE: To create a product with a Bill of Materials, the component products must already be created in DEAR.
To add Bill of Materials to an item:
When creating a new product or editing an existing product, check the Bill of Materials box in the document header.
This activates the Bill of Materials tab below. Use + Component to select the component products from your inventory.
Enter the Quantity of each component product required in the assembly.
Enter a Wastage %/Wastage Quantity and/or Disassembly Cost percentage if required.
NOTE:When left blank, DEAR splits the cost of the disassembled components equally between product lines.
Example: Product A is disassembled into 2 x Product X and 1 x Product Y.
If product A has $100 cost, the default settings in DEAR will set $50 for Product X line (which will be split among 2 items, giving the cost of $25 per each instance of Product X) and $50 for Product Y.
Suppose that you wish to set your own rules. You estimate that the cost of the product Y will be $80 and the cost of the product X will be $10 each. Your disassembly cost percentage will be 20% for the first line (product X) and 80% for the second line (product Y).
Service items associated with the disassembly can be included by clicking + Labour and Overheads. It is required to include an Expense Account.
Save the product to complete the assembly.
Assemble a Finished Product
Assembly can be performed manually or automatically. Auto-assembly is only recommended in the case where you do not sell the component products as individual items.
NOTE: Only FIFO, FIFO-Batch and Special-Batch costing methods support auto-assembly.
To manufacture a finished product:
Navigate to Production -> New -> Assembly.
Choose a Location where the product will be manufactured.
Choose a product (using Product Name or SKU) from the dropdown menu. Only products with a Bill of Materials will be shown.
Choose a Work in Progress Account and a Finished Goods Account.
Enter a Quantity to assemble. Use Maximum Quantity to calculate the maximum number of assemblies that can be performed with your available inventory.
You can then load the Bill of Materials in the Assembly Order tab.
Click Load BOM to add the component items to the assembly from the Bill of Materials. The Bill of Materials can be amended by either adding additional components to the Bill of Materials by clicking + Component Line or amending the quantity of the current components used which will ultimately affect the total quantity. Authorise the order.
NOTE: Total quantity figures marked in red indicate insufficient components that will need to be ordered to complete this manufacturing run.
If you have insufficient total quantity of components you can still proceed with authorising this order, which will automatically create backorders for any components that are missing. As soon as all required components are in stock, you will be able to proceed with the pick stage of the manufacturing process.
Go to the Pick tab.
Use Auto Pick that will automatically select the raw ingredients based on the costing method selected.
You can then Allocate these items to the production room physically taking them out of the inventory.
NOTE: If you know that the total quantity of raw components used is higher or lower than the total quantity displayed in the pick stage, you can amend that here.
- Once the manufacturing run is completed, click the Complete button.
NOTE: Before completing the assembly, you can still amend the actual yield of the manufacturing run if it was higher or lower than expected. Completing the finished goods task will increase the total quantity of the finished product by the actual yield.
To assemble an item automatically:
- Navigate to Inventory -> Products.
- Select the product you wish to disassemble automatically.
- Check the Auto-assembly box.
- Save the product.
When this item is in received into the inventory, it will automatically be assembled into the finished kit of items.