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SAP Business One Production Orders and How Finished Goods and Component Inventory is Effected

An incoming question from a customer running SAP Business One is as follows:  “From the Production Order drop down menu, I select Report Completion, then the Receipt from Production screen comes up…in the lower right hand corner there’s an option for Return Components. If I select this option, I get a list of released Production Orders. When I select a Production Order, I get what appears to be a list of all the components I have previously issued for that Production Order. Can you explain this option to me, please?”

The short answer is:  Choose the Return Components button when you want items that were manually released to production to be returned to inventory as available stock.  You would use this option if a production order is cancelled or if you had specific  items on a production order that were not used in production.  When you use this option, the finished good that would have been incremented or added had the production order been completed is not incremented.

Here is a walk through of Production Orders, and you’ll see in more detail how finished goods and component inventory is effected within this menu.


We’re going to create a PC Set 1 in the OEC Computers demo database.  It is composed of parts P10001 and A00003.  There are currently 20 in stock./wp-content/uploads/2013/06/production_receipt_2_232384.png

Choose production > production order.  Choose the product number 10003.  This product has to be defined using a bill of materials.  The components are automatically filled in from that BOM.  Note status is planned.


After adding the order, you’ll want to find that previous order and change the status to Released.  Note the issue method for each component is backflush.


After the production order is released and the products are completed, we choose receipt from production to add the finished goods to inventory.  The ‘Production Order’ button in the bottom right corner is used to select the open production orders available and add them to the receipt window.   You can select that same product order multiple times.  Each time it is selected, the proper number of components will be issued from inventory, thereby reducing the available stock.  (Note: The number of components used in a product is defined by a bill of materials)



After we add the receipt from production, we’ll want to go back to the production order and change the status to closed.
If we check the inventory data in the item master tab, we’ll find that 3 new PC sets have been added to inventory.  Also, the same number has been removed from each of the components in stock number.


If we create the same production order using the manual method, we’ll have some different steps to complete./wp-content/uploads/2013/06/production_receipt_8_232399.png

We’ll still want to change the production order status to released.  Next  we’ll want to choose Issue for Production and click on the production order
button in the bottom right of the form. 
Select the production order you want to release components for and choose the components in the following window.


At this point, each component has been issued to production and removed from inventory, but the finished good has not been added to
inventory.  So, we have to choose receipt from production from the menu and receive those items into inventory.  Click on production order in the bottom right to choose the production orders you want to add.


Here, you can also click the button “Return Components” to return manually released components back to inventory.


You will have to return to the production order and change its status to closed whether or not you choose to add the production order or
return components to inventory.

This article has discussed SAP Business One Production Orders and how finished goods and component inventory is effected, by Kevin Ly, Associate at Aether Consulting.  Aether Consulting is an SAP Gold reseller partner, specializing in SAP Business One for manufacturers, job shop manufacturing, distribution and service industries.  We are a Michigan SAP Business One reseller, and we sell, install, implement and support our with clients based primarily in Michigan but we have clients in other states as well.

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      Author's profile photo Nagarajan K
      Nagarajan K


      Very good presentation for on "Return components".

      Please include the condition of Production order status and type of production applicable for "Return components".

      Thanks & Regards,


      Author's profile photo Radek Stepanek
      Radek Stepanek

      How to do Return secondary product from production order?


      Radek Štěpánek

      Author's profile photo Former Member
      Former Member

      Hi Radek,

      you can use dissemble option to return all quantity back to warehouse.

      Follow the same method as you do production but only you need to select Dissemble on production order document. what ever production has been done already will be back to warehouse.

      Regards & Thanks,

      Vikas Thorat.