ManufacturingAI-powered ERP

Manufacturing ERP: bill of materials, MRP, work orders and costing

Planning and the shop-floor work order use the same data. Recipe, material requirements and actual cost never drift apart.

Updated: · Korgün Yazılım

  • Bill of materials
  • MPS
  • MRP
  • CRP and scheduling
  • Work orders
  • Subcontracting
  • Costing

Short answer

The manufacturing modules of Korgün Cloud ERP cover bill of materials and recipes, master production schedule (MPS), material requirements planning (MRP), capacity requirements planning (CRP), scheduling, subcontract tracking, last and sole planning, and work orders with scrap, labor and actual order cost. The recipe is attached to the model rather than to each variant, so MRP, consumption and cost are calculated per color and size.

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Planning

Planning side

Bill of materials and recipes

Recipes for semi-finished and finished goods, material and consumable definitions, processes (routing), by-products and scrap.

MPS

Master production schedule based on orders and forecast.

MRP

Material requirements planning from recipes and stock position.

CRP and scheduling

Capacity requirements planning and work-center based scheduling with a Gantt view.

Subcontracting

Material issued to and received from subcontractors.

Last and sole planning

Last and sole planning for footwear and leather production.

MRP

How MRP computes net requirements

MRP answers what is needed, when and how much from the bill of materials, open orders and stock. The MRP decision screen converts the result into purchase requests or work orders. The calculation runs on the model-based recipe at color and size level.

  • Multi-level explosion from orders and the plan
  • Requirements list per raw material: gross, on hand, on order and net
  • MRP decision screen: approve the suggestion as a purchase request or prepare for production
  • Semi-finished goods evaluated level by level into work orders
  • Purchase requests and purchase orders from the approved requirement
StepWhat happens
Gross requirementOrders and the plan are exploded through the bill of materials into raw materials and semi-finished goods
On handLocation stock and reservations are deducted
On orderOpen purchase orders and open work orders are added
Net requirementGross − (on hand + on order); nothing is needed if the result is negative
SuggestionA purchase request for items to buy, a work order suggestion for items to make
Shop floor

The work order life cycle

A work order is opened with the processes and raw materials of the bill of materials, followed through its processes, and consumption and scrap are recorded along the way. Raw materials can be substituted and semi-finished work orders created when needed. A simple production screen offers a one-step production document for small businesses.

Work order

Order with model and color-size quantities; consumption preview.

Production tracking

Progress of the order process by process.

Raw material substitution

Replace a material on the order with an equivalent.

Semi-finished work orders

Lower-level semi-finished orders derived from the order.

Scrap management

Scrap per order and process; planned versus actual comparison.

Piece-rate

Piece-rate production report per worker and process.

Simple production

Production with a single document: raw material out, finished goods in.

Completed orders

Detailed report of completed work orders.

Completion

What happens when a work order is completed

  • The finished product (and any by-product) enters stock
  • Raw materials and semi-finished goods are deducted from stock
  • Scrap is recorded separately
  • The order cost is calculated from actual consumption, labor and scrap
  • The order can be reopened if necessary
Costing

Four views of production cost

If the cost behind a selling price is an estimate, the profit is an estimate too. Production cost should be calculated from actual consumption, labor and allocated overhead.

ViewWhat it showsWhen it is used
Order costActual consumption, labor and scrapProfitability after production
Model costStandard cost from the recipe and model expensesPreparing a price list
Scenario costWhat changes if a raw material price or the recipe changesBefore a price increase or a supplier change
Virtual costPreliminary cost for a product not yet producedQuotes and new models
Overhead

How manufacturing overhead is allocated

Rent, energy and depreciation cannot be written directly to one product. In Korgün these overheads are allocated per stock item or per process, and model expenses are defined separately, so every finished product carries its own share. Revaluation recalculates finished-goods cost at current prices.

Product family

Deeper manufacturing needs

For manufacturing-heavy businesses the Korgün ERP family includes the KG Palaimon manufacturing ERP, with deeper structures for variants, subcontracting and actual costing aimed at the footwear, leather and textile sectors.

KG Palaimon (Turkish page) ↗

Questions

Frequently asked questions

What data does MRP use?

MRP calculates material requirements from the bill of materials and recipes together with current stock, open orders and the production plan.

What is the difference between MRP and MPS?

MPS (master production schedule) decides which finished product to make, when and how much; MRP calculates the raw material and semi-finished requirements for that plan.

Can MRP run per color and size?

Yes. Because the recipe is attached to the model, requirements are calculated at color and size level, so material per variant comes out correctly in footwear and apparel.

Can subcontracted production be tracked?

Material sent to and returned from subcontractors is tracked in the production module, and the subcontract cost can be reflected in the work order cost.

How is production cost calculated?

Order cost is calculated from the raw materials actually used, labor entries and scrap records. Calculation rules are set per business through system parameters.

Why does order cost differ from standard cost?

Materials, scrap and labor actually used can differ from the recipe standard; the order cost makes that difference visible.

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