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 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.
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
| Step | What happens |
|---|---|
| Gross requirement | Orders and the plan are exploded through the bill of materials into raw materials and semi-finished goods |
| On hand | Location stock and reservations are deducted |
| On order | Open purchase orders and open work orders are added |
| Net requirement | Gross − (on hand + on order); nothing is needed if the result is negative |
| Suggestion | A purchase request for items to buy, a work order suggestion for items to make |
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.
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
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.
| View | What it shows | When it is used |
|---|---|---|
| Order cost | Actual consumption, labor and scrap | Profitability after production |
| Model cost | Standard cost from the recipe and model expenses | Preparing a price list |
| Scenario cost | What changes if a raw material price or the recipe changes | Before a price increase or a supplier change |
| Virtual cost | Preliminary cost for a product not yet produced | Quotes and new models |
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.
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.
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.
Related pages
Footwear and apparel ERP: size-color matrix, assortment packs, model recipe and subcontracting
Model-color-size matrix, assortment packs, model-based recipe, last and sole planning and subcontract tracking for shoe and garment makers.
Cloud ERP software from Türkiye: accounting, inventory, production and retail in one system
What Korgün Cloud ERP is, which modules it covers, Turkish e-invoice compliance, AI features and how implementation works.
About Korgün Yazılım
Company facts, product family, sectors and integrations of Korgün Yazılım, the Istanbul-based ERP developer founded in 1992.
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