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Manufacturing Concepts

Understanding the core concepts of the Manufacturing (MRP) module is essential for optimizing your production and maintaining accurate inventory and financial records.

The Manufacturing Ecosystem

The manufacturing module in Kezi ERP is designed to track the transformation of raw materials into finished goods. It connects inventory, planning, and accounting in a seamless flow.

1. The Bill of Materials (BoM)

The BoM is the foundation. It’s not just a list of materials; it defines the structure of your product.

  • Normal BoM: Standard hierarchical recipe.
  • Phantom BoM: Used to group components logically without creating a separate physical step.
  • Kit BoM: Used for selling sets of products under a single name.

2. Work Centers & Operations

Work Centers represent the physical constraints of your factory (machines, stations, assembly lines). Operations are the specific tasks performed at these centers (cutting, welding, assembly).

  • Capacity: Defines how much work a center can handle.
  • Efficiency: Adjusts scheduling based on how fast the center realistically operates.
  • OEE: A metric that tells you how well your machines are being utilized.

3. Manufacturing Orders (MO) vs. Work Orders (WO)

  • Manufacturing Order (MO): The "Project". It says "Make 100 Chairs".
  • Work Orders (WO): The "Steps". They say "Step 1: Cut Wood at Saw Station", "Step 2: Assemble at Table 1".

You cannot finish the MO until all required WOs are completed.

The MRP Lifecycle

  1. Demand Generation: A Sales Order or a Reordering Rule identifies a need for stock.
  2. Planning: A Manufacturing Order is created and confirmed, reserving materials.
  3. Execution: Operators start Work Orders at their Work Centers.
  4. Completion: Finished goods are produced, materials are consumed, and accounting entries are posted automatically.

Accounting & Costing

Kezi ERP uses BOM Costing to value your finished products.

  • Material Cost: The weighted average cost (AVCO) or FIFO cost of all consumed components.
  • Labor & Overhead: Calculated based on the hourly rate of the Work Centers and the actual time spent on Work Orders.

When an MO is completed, the system:

  1. Credits Raw Materials Inventory.
  2. Debits Finished Goods Inventory.
  3. Adjusts Work in Progress (WIP) if the operation spans multiple days.

Best Practices for MRP Success

  • Keep BoMs Accurate: Inaccurate quantities or missing components will lead to incorrect inventory levels and flawed costing.
  • Monitor OEE: Use Work Center reports to identify bottlenecks. Is a specific machine constantly overloaded?
  • Be Diligent with Time Tracking: Encourage operators to use the "Start" and "Done" buttons on Work Orders. This provides the data needed for accurate labor costing.