Nested production orders (production BOM explosion)

Nested production orders (production BOM explosion)

Production BOMs can contain finished products (products with their own production BOM) or assembled components (products with their own assembly BOM). This article explains how Cin7 Core treats orders containing nested production BOMs, including from production orders initiated manually, generated automatically from sales and purchase orders, or created from reorder suggestions.

Nested production orders are only created if the nested order product is not in stock, either in the shop floor warehouse or in the connected warehouse in your logistics path.

Component finished products must have their own production BOM in order to generate nested production orders. Finished products that are produced as part of another product's manufacturing process, but which do not have their own production BOM, will not cause nested production orders to be generated.

Prerequisites

Nested production orders with manual authorization

This section applies when a production order is authorized or released from the production orders list, scheduler, or the production order itself.

  1. Production orders start with Draft status. No nested orders for finished products are created at this stage.

  2. Authorizing a draft production order creates Planned nested orders for production components and Authorized assembly orders for assembled components.

  3. Releasing a production order also releases any nested orders.

Auto-assembled nested components create an exploded component list in the production operation containing the auto-assembled component, and do not generate a separate assembly order. This is known as a Phantom BOM.

Nested production orders created from MRP and reorder suggestions

This section applies to production orders generated from Materials Requirements Planning and reorder suggestions. Requires Create production order: From MRP/reorder suggestions in your production process settings.

Reorder suggestions for products with a production BOM generate production orders.

  1. Confirm a reorder (for reorder suggestions) or supply suggestion (for MRP) of an SKU with a production BOM.

  2. This creates a production order in Draft status.

  3. Cin7 Core creates all nested assembly and production orders for nested components in Draft status.

Nested production orders generated from orders

This section applies to production orders generated automatically sales and purchase orders containing a finished product. Requires Create production order: When order is authorized in your production process settings.

  1. Authorizing a sales or purchase order for a finished product creates nested product with the same status as the parent order. Planning or releasing a parent order will plan or release any nested orders, respectively.

  2. Cin7 Core creates authorized assembly orders for nested assembly components when the parent production order is authorized or planned.

Auto-assembled nested components create an exploded component list in the production operation containing the auto-assembled component, and do not generate a separate assembly order. This is known as a Phantom BOM.

Example

Product A is a finished product with a production BOM. A sale is authorized for one unit of product A.

Production BOM explosion for product A:

  

All orders for semi-finished components (nested orders) are created in the same status as the production order for product A.

The low level elements are highlighted with yellow. These are simple components which need to be bought or transferred from another location to complete product A. This can be carried out automatically or manually depending on your production process settings, and quantity available in your shop floor and connected warehouse.

The quantity produced will depend on an additional setting, On order release produce, with three options:

  • Quantity required

  • Quantity required and maintain minimum stock level quantity

  • Difference between available quantity and quantity required to cover a shortage

Quantity required

Production orders will be created only for quantity required for sales order, regardless of available quantities.

  1. A sales order for 1 product A is authorized.

  2. Cin7 Core creates production orders for:

    • Product A - production order for quantity 1 (demand from sale)

    • Product B - 2 of product B are needed for each product A (separate operations, so separate orders)

      • Production order for 1 product B

      • Production order for 1 product B

    • Product C - 1 of product C is needed for product A

      • Production order for 1 product C

    • Product E - 1 of product E is needed for each product B.  2 product B are needed for product A. (Separate orders are created)

      • Production order for 1 product E

      • Production order for 1 product E

Related orders: Purchase orders and transfer orders are created depending on the availability of simple components, the same as it is done for a regular production order.

  • Related orders are created only for the orders to which they refer and not visible in the parent order. If product L is required for product C production, then purchase order for product L production order will include purchase orders for product C.

  • In production order for product A, the purchase order for product C is not displayed. If product L is required for some other production order, it will be created within this production order.

  • Assembly BOM initiates orders creation the same as production BOM

    • Assembly order is created for product F, and will be visible in the Related orders tab.

    • No purchase or transfer orders are created automatically for assembly orders.

Quantity required and maintain minimum stock level quantity

Production order quantity is calculated as: Sales order quantity - (Minimum before reorder + reorder quantity + on order - available). Even if availability is negative, it is considered in the formula and added to the quantity to produce.

For each component:

  • Minimum before reorder = 1

  • Reorder quantity = 1

  • Availability = 1

Component availability is re-checked whenever the order changes from one status to another. If component availability is different from when the production order was generated, you can select whether to keep original order quantity or newly calculated order quantity.

  1. A sales order for quantity 1 of product A is authorized.

  2. Cin7 Core creates production orders for:

    • Product A -  1 of product A needed to meet sales demand, 1 required to maintain stock quantity.

      • Production order for 2 product A

    • Product B - 2 of product B is needed for each product A.

      • Production order for 3 product B (this order considers the Reorder and Minimum stock)

      • Production order for 1 product B (this order does not)

    • Product C - 1 of product C is needed for product A, 2 of product A are required.

      • Production order for 2 product C

    • Product E - 1 of product E is needed for each product B.  2 product B are needed for product A.

      • Production order for 3 product E (this order considers the Reorder and Minimum stock)

      • Production order for 1 product E (this order does not)

Difference between available quantity and quantity required to cover a shortage

Production order quantity is calculated as: Available - Sales order quantity (negative availability is considered as 0).

The availability for all components is 1.

Component availability is re-checked whenever the order changes from one status to another. If component availability is different from when the production order was generated, you can select whether to keep original order quantity or newly calculated order quantity.

  1. A sales order for quantity 1 of product A is authorized.

  2. Cin7 Core creates production orders for:

    • Product A - 1 of product A needed to meet sales demand

      • Production order for  1 product A

    • Product B - 2 of product B are needed for each product A. (Separate orders are created)

      • Production order for 1 product B

      • Production order for 1 product B

  • Product C - 1 of product C is needed for product A

    • Production order for quantity 1 product C

  • Product E - 1 of product E is needed for each product B.  2 product B are needed for product A.

    • Production order for 1 product E

    • Production order for 1 product E

Create nested production orders for minimum quantity

​In order to produce only the difference between the required quantity and available quantity of components of a production BOM with nested BOMs to produce the components, you should configure your production process settings like so:

  • Create production order: When order is authorized

  • Nested production order creation is: Automatic

  • On order release produce: Difference between available quantity and quantity required to cover a shortage

  • Recommended:

    • Stock transfer is: Automatic

    • Purchase order replenishment is: Automatic

Nested auto-assemblies (Phantom BOM)

When a production BOM contains an assembled nested component with auto-assembly enabled, the component list is exploded in the production operation containing the assembly component without creating an assembly order. This is known as a Phantom BOM.

Example

In this example we have a parent product (Cake), and a child product (Frosting). Frosting is an assembled component, and contains Butter and Sugar as components in its assembly BOM. Auto-assembly is enabled.

You can add Frosting to a production operation as a component in the production BOM for Cake.
  

When a production order for Cake is authorized, the phantom BOM components for Frosting are exploded and displayed in full as part of the production operation.
  

This is useful in three ways:

  • It mirrors the logical process of production

  • It enables a component (e.g. frosting) that is the same for multiple parent products to be quickly added to multiple production BOMs

  • Easy conversion when product is bought with one unit of measure and needs to be converted to another. (e.g. a case of eggs, to a single egg)

Please see Phantom BOM for more information.

Related orders for nested production orders

Nested production orders for a finished good can be found on the Related orders tab of the production order. See Production orders - Related orders for more information.

  

  • If the production order was generated by a sale or purchase authorization, the order will appear in the related orders of the parent production order and nested production orders.

  • Related orders tab will show nested production orders for semi-finished components and for the next nested level up.

Capacity calculation for nested production orders

A production BOM can contain semi-finished products that are production BOM products themselves. There can be several hierarchical levels of a production BOM.

Production orders for nested semi-finished products are created and planned (resource capacity is calculated) automatically when the top-level order is authorized. These are displayed in the Related orders tab of the top-level product.

Nested production orders are created in the same location as the parent production order. Completed semi-finished products should be put away to either the shop floor location of the top-level order or the connected warehouse location.

Orders for nested Production Orders are created with the following properties:

  1. Status of the order is Planned.

  2. Required by date of the nested product is the Release date of the parent production order.

    • Since the Release date for the finished product Production Order iS not confirmed (release of this order is not done), it is calculated from the default release date for the finished product Production Order. It is calculated the same as for the top-level production order.

  3. Timelines for semi-finished products Production Orders are automatically calculated by the From Required by date backward method if the Required by Date is available in the top-level Production Order. Timelines are calculated for each order separately. The timelines for the finished product Production Order is the sum of all Production Order timelines for the semi-finished products.

 

Release of semi-finished products Production Orders should be executed manually. This will create related orders (Stock Transfer, Purchase Orders) necessary for that order. These created orders are not visible in the Related Orders tab of the top-level finished product.

In Capacity Planner, if one semi-finished product Production Order is re-planned, all other orders including the finished product Production Order are not re-planned. The user will have to go to the Scheduler and check that any problems caused by the re-planning are resolved.

Production order tags and additional attribute sets

Production order tags and additional attribute sets are copied from parent production orders to nested production orders.


Undo and void of nested production orders

Undoing or voiding one level of a production order does not undo or void any nested production orders.

Undoing or voiding a sales order which has triggered a production order does not undo or void the production order or any nested production orders.

Was this article helpful?

Have more questions? Submit a request