Execute BoM Cost Roll-Up and Standard Costing

1. Overview & Business Value#

This comprehensive operational guide details the architecture, business workflows, configuration parameters, and execution steps for Execute BoM Cost Roll-Up and Standard Costing within SmartERP.

Calculating total product cost across raw ingredients, labor hours, machine overhead, and updating standard prices.

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2. Prerequisites & Security Access Groups#

• Required Modules: mrp, quality_control, smarterp_manufacturing_costing
• Security Groups:
  • Manufacturing User (Technical ID: mrp.group_mrp_user)
  • Manufacturing Administrator (Technical ID: mrp.group_mrp_manager)
  • Quality Inspector (Technical ID: quality.group_quality_user)
• Master Data Dependencies: Bills of Materials (BoM), routing operations, work centers with machine/labor hourly rates, raw material stock, and inspection checkpoints.

3. Step-by-Step Configuration & Execution#

Step 1: Navigating to the Module Interface#

1. Log into your SmartERP instance at https://smarterp.et/odoo.
2. Open the main App Switcher (grid icon in the top-left corner).
3. Select the Manufacturing app icon.
4. From the top navigation bar, open Manufacturing → Operations → Manufacturing Orders / Work Orders; Quality → Quality Control.

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Step 2: Creating and Parameterizing Records#

1. Click the New button in the top-left control panel.
2. Complete the mandatory fields in the record form:
   • Finished Product (Mandatory): Manufacturable item variant linked to an active Bill of Materials
   • Quantity to Produce (Mandatory): Target production batch volume in standard unit of measure
   • Bill of Materials (BoM) (Mandatory): Active engineering recipe defining component roll-ups and operation steps
   • Scheduled Date (Mandatory): Target production execution date and shift allocation
3. Configure optional operational parameters and localized tags as required:
   • Work Center Routing (Optional): Specific shop floor machine or assembly station sequence
   • Lot / Serial Number (Optional): Assigned traceability lot for finished goods batch tracking
   • Analytic Cost Account (Optional): Cost absorption center for direct labor and utility overhead
4. Click the Save icon in the control bar to commit the record.

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Step 3: Validating and Processing Transactions#

• State Transitions: Execute operational state progression (Draft → Confirmed → In Production → Quality Gate Passed → Done → Cost Closed).
• Ledger & System Impact: Consumes raw materials from inventory (crediting stock valuation), absorbs labor/machine overhead, and debits finished goods inventory at actual cost.
• Audit Verification: Automated recording of author ID, timestamp, and immutable revision history.

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Principles of Cost Roll-Up#

A finished good's standard unit cost comprises three structural cost layers:

1. Direct Material Cost: $\sum (\text{Component Quantity} \times \text{Standard Cost} \times [1 + \text{Scrap \%}])$
2. Direct Labor Cost: $\sum (\text{Routing Operation Run Time} \times \text{Labor Hourly Rate})$
3. Machine Overhead Absorption: $\sum (\text{Work Center Machine Time} \times \text{Work Center Hourly Rate})$

[mrp-bom-cost-rollup]

Procedure: Running an Automated Cost Roll-Up#

1. Open the target product's active Bill of Materials.
2. In the top action bar, click Cost Analysis / Compute BoM Cost.
3. SmartERP recursively evaluates every sub-assembly and component price in the tree.
4. The system displays the comprehensive cost breakdown table:
   • Total Component Cost: e.g., 4,210.50 ETB
   • Total Operation Cost: e.g., 920.00 ETB
   • Total Calculated Unit Cost: 5,130.50 ETB
5. Click Apply to Product Master.
6. The product standard cost is updated, establishing the benchmark for subsequent manufacturing variance analysis.

4. Advanced Configuration Points#

• Automated Actions & Scheduled Tasks (Crons):
  • MRP: Recalculate BoM standard costs (mrp.ir_cron_bom_cost_roll): Runs weekly to update standard costing from latest procurement purchase prices
  • Quality: Trigger periodic inspection alerts (quality.ir_cron_inspection_check): Runs daily to flag mandatory quality testing queues
  • Workcenter: Update OEE statistics (mrp.ir_cron_workcenter_oee): Runs hourly to compute Overall Equipment Effectiveness metrics
• Custom Print Templates & Reports:
  • Production Order Traveler & Pick List
  • Shop Floor Work Order Execution Slip
  • Quality Inspection Certificate & Non-Conformance Report
  • Manufacturing Cost Analysis & Variance Ledger
• Multi-Company Rules: Record-level security isolation under Company 1 (Ashewa Technology Solutions S.C.), preventing cross-company ledger leakage across parent and subsidiary legal entities.

5. Comprehensive Troubleshooting Matrix#