Using Inputs and Outputs - Intermediate or semi-finished products

Some production processes need to stock the intermediate results (products) of their operations for use in later operations. Such intermediate products can be reflected in the Production BOM to increase accuracy in production reporting and transparency for the production process. These are known as intermediate or semi-finished products in DEAR. 


Prerequisites


Table of Contents


What is a semi-finished product?

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Semi-finished products are products at an intermediate stage of production. They can be defined as the input or output of a production operation. It is not necessary to include input/output in a Production BOM, however such intermediate entries can be including for higher accuracy and transparency in costing and reporting yield and wastage. 


Adding a semi-finished product to your inventory

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Semi-finished products must have an entry in your inventory before they can be added to a Production BOM to define input or output. Only Type:Stock or Type: Non-Inventory products can be semi-finished products. Add semi-finished products to your inventory like any other stock or non-inventory product – see Product and Service Management for more information. 



Semi-finished product characteristics

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Outside of a production BOM, semi-finished products behave as any other stock/non-inventory product. They can be bought or sold, affected by demand for replenishment, etc. 


Inside a production BOM, semi-finished products are defined as inputs or outputs of a production operation. They are treated as "virtual products" and the following characteristics are applied:

  • Input/output can exist only within a particular Production BOM. i.e. it is impossible to add a product to an operation line of type: input if it is not listed on an operation line of type:output in a previous operation.
  • A finished product can’t be added as output for any operation.
  • The picking order is always considered as FIFO no matter what costing method is set up for the selected product. Serial/batch numbers are not considered.
  • No inventory card is created for such product until wastage is posted. 
  • Wastage is posted with the costs = fixed price indicated in Production BOM. 
  • No stock allocation takes place for products listed as input or output.
  • No cost calculations take place for products listed as input or output.


Defining semi-finished products as inputs and outputs in a Production BOM

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Inputs are consumed as part of an operation. The input quantity should be per Quantity to Produce of the final product. 

  • e.g. Production BOM is for Ripened Cheese, Quantity to Produce: 10. 20 units of the input are required per 10 units of Ripened Cheese. 


Outputs appear as a result of an operation. The output planned quantity is per Quantity to Produce of the final product. 


Semi-finished products are added to the operations in the Production BOM of the types:

  • Manufacturing
  • Quality Control


it is impossible to add a product to an operation line of Type: Input if it is not listed on an operation line of Type:Output in a previous operation. 


A product can be listed as both input and output of an operation (e.g. in a quality control operation). 


Example Production BOM with intermediate products

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A simplified version of this Production BOM for Ripened cheese was shown in Finished products - primary products, coproducts, byproducts, joint production products. We recommend familiarising yourself with finished products before adding in intermediate products. 


Consider a simplified production BOM to depict the cheesemaking process:

The product for which we are making the production BOM is the final product: Ripened cheese. The Production BOM specifies the process for 10kg of Ripened cheese. 


We will need to create the following product entries:

  • Raw milk (component)
  • Mesophilic starter culture (component)
  • Rennet (component)
  • Curds (intermediate product)
  • Unpressed cheese (intermediate product)
  • Unripened cheese (intermediate product)
  • Powdered whey (finished product)
  • Fresh cheese (finished product)
  • Ripened cheese (finished product)


We have the following work centres set up:

  • Tanks
  • Cheese processing station
  • Aging rooms


And the following resources set up:

  • Curd tank
  • Labour: Dairy
  • Cheese press
  • Storage Shelves


The first step is represented as so:

  • Note that Output: CheeseCurds are not consumed in the operation they appear as a result of this operation. The output quantity is per Quantity to Produce of the final product.  
    • In this example, the Production BOM is for 10kg of Ripened cheese. 15kg of Cheese Curds are produced from the components for 10kg of Ripened cheese. In this step a finished product, Whey, is also produced.


Our next step is the next manufacturing operation, Salting. We Input: Cheese curds from our previous operation. Output: Unpressed cheese and Finished Product: Fresh Cheese appears as a result of the operation. 

  • 15 kg of Unpressed cheese are produced from the components for 10kg of Ripened cheese. 5kg of Fresh Cheese is also produced. 


Our final steps involve more manufacturing operations. 

  • In Step 3: Press and Mould, we Input: Unpressed cheese from our previous operation. 10kg of Output: Unripened cheese are produced from 15kg of Unpressed cheese. 
  • In Step 4: Ageing, we Input: Unripened cheese from our previous operation. 10kg of Output: Aged cheese are produced from 10kg of Unripened cheese. 


In the Yield section, we can see that only the finished products named in the production BOM are listed. 




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