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Jewelry Manufacturing and Molding in BOM

My company is a jewelry manufacturer and all the items we do have to be molded before actually being put together.

Each mold will be made on a tree like this:
image

This tree is made out of silver & wax and only the leafs will be counted as a product and the rest is scrap metal to be recycled.

In the bom, it is asking for the raw material to be used for each product, but the problems that we are having are:

  1. when creating the mold tree, there is no way for us (sales / production managers) to know how much scrap will be used and how much actual silver will be used.
  2. Each tree can have multiple products, not only one, which will mean it cannot have only 1 BOM

Any idea is much appreciated.

@ramielian Watch the videos on the following link to understand how to configure Make to Order :

Let’s understand your business a little bit more. You don’t make the trees, the tree is just a tool to mold silver parts that get used in various other finished items.

Is my understanding right?

More after you reply. :slight_smile:

Thanks

Jay

@JayRam No, actually the trees have 3 parts:

  1. The plastic base
  2. The tree pole
  3. The products (leafs) on the pole

The plastic base is reusable and is just a base, so it’s not a big deal.

The tree pole is made from wax/silver and will be added as scrap after the operation is done.

The products on the pole are different products (maybe 1 sku, 2 or even 10) which will go into stock after the operation is done.

The weight or even the raw material used are different from 1 tree to another, so nothing is fixed.

Another question: Does the Tree provide all the silver that is necessary to make the leafs? Or do you add additional silver sheets or ingots or whatever?

Another question (these two questions are not related to each other): When the tree is scrapped to be recycled, though the tree is made of Silver and Wax, you are mostly worried about reclaiming the silver, right? Or is reclaiming the wax super important for you also?

Thanks

Jay

The tree is actually made out of wax, after it is done the technician will put casting gypsum to take the shape of the wax, and then put it in an oven for the wax to be drained out of the cast and then add the silver.

The wax cannot be reclaimed, and the silver is going to the scrap warehouse anyway, but the issue is how to make a bom for this or any other type of documents that will result in products (leafs) going into stock and maintaining it there for another use.

Okay, this means that all the silver is added separately, and it’s just that during the process of making the leafs, the silver gets mixed up with the Tree and needs to be claimed back?

Patience, I will provide you my suggested approach after you repond.

Thanks

Jay

Okay, since you are suspicious that I’m just trying to get details about your business, let me give you my suggested approach with the level of detail I have with me.

First a few statements:

  1. A BOM is only useful for you for material planning purposes.
  2. You cannot use a BOM to make manufacturing entries (which is why No. 1 above)

Here’s what I would do:

I would create an Expense Account called Silver Molding Consumption and Yield.
The silver that I’d issue for molding, I would issue out using Stock Entry Purpose Material Issue and charge it to Silver Molding Consumption and Yield Account.

Now as I make silver leafs, I will use Stock Entry Purpose: Material Receipt and charge it to Silver Molding Consumption and Yield Account.

As I reclaim Silver Scrap, I would charge it again to Silver Molding Consumption and Yield Account.

A general ledger report of the Silver Molding Consumption and Yield Account would give me the imbalance in this account. The imbalance would be because of better or worse than expected yields of Silver Leafs and Recovery of Silver Scrap.

You need to watch this account, build a valuation model that sets the valuation for the next period of watch (you can begin with a weekly period and then move it to Fortnightly and Monthly). Steady state you can keep the period at Monthly or if your yields are steady even quarterly.

Another approach would be to build the BOM to resolve into Silver for everything - Like Each Silver Leaf (and you could be making dozens of different types of silver leafs) translates in the BOM into X Grams or Kgs of raw silver. Similarly Silver resolves into X Grams of raw (recoverable in this case) silver. In this approach,instead of using Stock Entry Material Receipts and Issues, you’d drop the Silver into a Virtual warehouse (say Silver Molding Warehouse) and then you’d pull out each item separately using a BOM. So, let’s say you dropped 1000 Grams of Raw Silver into this virtual warehouse. And you pulled Silver Leads out of this warehouse that accounted for 835 Grams of raw silver. And you recovered scrap that translates into 140 grams of raw silver. Now at the end of the cycle, the stock balance report of Silver Molding Warehouse will show 25 Grams of Raw Silver. You take it out of the warehouse by making a Material Transfer into a Unrecoverable Silver warehouse or you make a Material Issue and charge an account called Unrecoverable Silver. Keeping a tab of this account will tell you whats the wastage of silver in your process so that you can add that as a percentage into your costing.

You deal with a precious metal. Chances are you have very good controls on the floor. But ensuring that the data is captured into a structured data solution such as ERPNext will help you analyze the yields and ensure that you can optimize the yield while ensuring that you are costing your products appropriately.

Anybody that’s lasted this long reading this piece: two messages:

  1. Think out of the box
  2. It’s possible to hack ERPNext to make it fit for almost every business and every vertical. But you need to start with business goals first. Else you end up agonizing over Item Masters and BOMs.

Hope this helps.

Thanks

Jay

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these are based on simple procedure, We and all manufacturers use BOM already but in my case it doesn’t suffice.

Not at all :slight_smile: I gave all the information I really have.

My issue is not about how to consume the silver / material, it is how to consume the material into multiple products (I.e when a material request is done, how to enter X products into stock.)

Appreciate the help :slight_smile:

So, you have multiple leafs that are made. With each batch the Leafs that are made and the quantity varies, right? All of them use Raw Silver (or some for of Silver).

If what I described is correct, you have 1 raw material that could make multiple items. Plus there is scrap that is generated. And the whole thing depends on the orders you get. Like Product A that you sell might need P Nos. of Leaf X & Q Nos of Leaf Y and Product B that you sell might need R Nos of Leaf X and S Nos of Leaf Y.

Plus you decide which leafs to make depending on the demand, right?

Please let me know if all of this is right. If I drone on, I might confuse you and waste your time.

If this is your situation, it’s a bit complicated process and a BOM cannot work for you. You can still make manufacturing entries another way, but please respond so that I can provide appropriate inputs.

Thanks

Jay

correct, it varies but all of them uses the same raw material.

in general correct, yes.

the technician decides depending on the technicians that install the leafs on the pole.

Using BOM in its current configuration cannot be used, Correct, that’s why I think a new doctype should be created and from there connect it to stock entries, is that correct?

You got it. But maybe you don’t have to create a new document. You can use an existing one, like say a Sales Order (if you make the Leafs on Make to Order) or a Material Request (if you make the Leafs on Make to Stock).

Do you decide which Leafs to make for every tree? Or does the Technician decide based on what’s the optimum mix for that tree?

Thanks

Jay

this will not consume materials though, and there would be no records of the trees which is a must.

I was thinking of making a new doctype to save the data for the trees and then use the Material request to consume it, but how can I delete/consume the material from there?

the technician does depending on the finished leafs that he have.

So is this Silver Plating of Leafs? Or making the molds for leafs?

Either ways, let’s say you know what Leafs you are making. And what raw material you are consuming to make those Leafs. Since there is variability in the throughput, and the generation of scrap and since you deal with precious metals you want to track the actual consumption on the shop floor (or whatever else you call it).

Now, is it known before the process as to what Leafs are being made on a Tree? Or you know partially? Or is it all very uncertain?

If you know before hand a document such as Material Request can be populated with the Leafs. You can (with scripting/coding) convert the document (Material Request) into a Stock Entry Purpose Manufacture where the Leafs and quantities are all populated with a Target Warehouse (In the Stock Entry Purpose Manufacture document, the finished/transformed item needs to have a target warehouse). Now this document can also have a line item for the Silver Scrap that was recovered and the Technician (or whoever else) enters this quantity. The scrap again has a Target Warehouse meaning that it is an output item. This document also has a line item for the Silver that is consumed. Again the operator of the process (or whoever) enters the quantity of silver consumed for this tree/transaction. You Save/Submit and everybody is super happy.

Now, if you don’t know what Leafs are being made and it’s situational/opportunistic, you have no document that you cna create before hand, so you can enter that directly into ERPNext as a Stock Entry Purpose: Manufacture.

Hope this helps.

Thanks

Jay

In addition to the conversation. Have you considered doing a Stock Entry Issue and Receipt pair for every production batch / tree ?

This is a much simpler process although it is a workaround so you need to re-purpose the reports as well to make sense when there’s production. You can also look into the manufacture Stock Entry type.

A little customisation to fill in the blanks or enforce the entire process could also help.

1 Like

You da man! I like to use Stock Entry Purpose Material Issue (to consume input Materials) and Stock Entry Purpose Material Receipt (to Produce output materials) a lot too. But the only trouble with that is that, if you want to value the output materials based on the value of the input materials consumed, you will need to link up the Material Issue and Material Receipt together, which is more code.

Thanks

Jay

So after a lot of reading in here and many other places, we have decided to:

  1. make a new doctype to track all casting trees (3 doctypes)
  2. link these doctypes to stock entry and material issue documents to do it on the fly (like in bom)
  3. repurpose the reports and take our the consumed materials when it comes from this new Bom to another report instead of the regular report.

I will try to make it as an app as i saw so many other people are asking for the same thing and will try to publish it when its done.

Sounds like a Plan.

Were you planning on the users initiating these three DocTypes? Or does the DocType gets it’s inputs from another DocType - Such as a Sales Order? Or Material Request? Or Production/Work Order.

If you think a little bit about how you are going to link Demand to Manufacturing, you’d build something more generic that others can use too.

But great job putting all of this together.

Thanks

Jay

So this is what i have gathered for now:

All the attributes / operations for this Doctype will be the same as the BOM (in some way), which means it can be populated from sales order and work order (although i think sales order is not efficient).

From the DocType it will be linked to Scrap warehouse, Stok Entries and Material Issue.

I will also create a report for this to make sure it is not confused with other orders.

The only issue for me now is learning how to actually link these together, which I will have time for after new year, and should make a pull request or at least an app repo in a 3 weeks or so after beginning.

Although, This whole doctype project might go away as my GF ( a developer as well ) wants to help me in it and create a full Jewelry module based on ERPnext, so still in the talks :slight_smile: