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How to Implement Production in Default SAP Business one

# About me:-

I have total 10 to 11 months of experience in SAP Business one.

I am gaining lots of knowledge from SAP forum,

I want to say “Thank you very much..” by hearts to all experts peoples who always encourage new comers in SAP.

here i tried to write a small blog on Production module.

# Purpose of this Blog :-

In this blog i am going to elaborate default production process in SAP Business one

# Contents of this Blog are :-

1) What is Bill of Material (BOM).

2) What is Component Item(Child Item).

3) What is Finish Item(Parent Item).

4) How to set Bill Of Material.

5) How to start production

  •       Types of Production Order
    • Standard
    • Special
    • Dis assembly

6) How to complete production

  • Issue Methods.
    • Manual
    • Back-flush
  • Types of Status
    • Planned
    • Released
    • Closed

7) How to Disassemble a production order.

8) What is Multiple BOM & How to set Multiple BOM.


1) What is BOM (Bill Of Material):-

  •     In simple language,BOM is a list of raw material which is required to produce a finish good.

2) Component Item (Child Item):-

  •   Component item are item which are use to produce finished item.
  •   Component item are physical items.


            Component Item->Bat,Ball,Bells,Stumps,Leg pads,Helmet,hand gloves & shoe are components to produce

            finished  goods i.e Cricket kit.

3) Finish Item (Parent Item):-

  •   In a Production process a component items are turn into finished items.


            Finished good->Cricket Kit set.

4) How to set BOM (Bill Of Material).

          1) Choose finish item (with quantity) from list of Header level field Product No.


                            select Cricket kit(for 1 set) item in header level of BOM.

Parent Item.png

          2) Choose component items (required quantity to complete FG) in row level


                                    ITEMS                QTY      UOM


                                    Bat                          1      Nos

                                    Ball                        1      Nos

                                    Bells                      4      Nos

                                    Stumps                  6      Nos

                                    Leg pads                2      Nos

                                    Helmet                  1      Nos

                                    Hand gloves          2      Nos

                                    Shoe                      1      Set


    3)  After adding details of Bill of Material (BOM) click on Add Button in bottom of form.

          Now BMO will add to database.

5) How to start production.





                    PRODUCTION .


  1)  Create Production Order:-

            1.1) Select Finish good (Product No.) from list.Default BOM set for that item will display in

                    production order row level.& Fill Planned Quantity i.e. production quantity of that item.


            1.2) Select Type of Production Order.

                    Their are 3 types of Production Order

                      i>  Standard

                      ii> Special


          i) Standard:-

      • If all Component items are include in production order process as per BOM set then Type of Production

                          should be Standard.

      • Default BOM automatically display for production order
        • Example:-

                                    For One set of Cricket kit, BOM is as below,

                                  Item No.                  Quantity


                                  Bat                              1

                                  Ball                            1

                                  Stumps                      6

                                  Bells                          4

                                  Leg Pads                  2

                                  Helmet                      1

                                  Hand Gloves              2

                                  Shoe                          2


          ii) Special :-

      • If Component items in Production order process are not as BOM set then Type of Production Should be Special.
      • In In Special production order we have choose component items manually.

        • Example:- 

                                    If few customer ordered Cricket kit set with Bat,Ball,Bells & Stumps only.

                                    In this case BOM will change & Production order will be special.

                        Default BOM:-                |    Special BOM (AS PER CUSTOMER REQUIREMENTS)


                        Item No.      Quantity      |    Item No.      Quantity


                        Bat                    1          |      Bat                  1

                        Ball                   1           |     Ball                  1

                        Stumps            6           |     Stumps            6

                        Bells                 4           |     Bells                4

                        Leg Pads          2          |

                        Helmet              1          |

                        Hand Gloves     2          |

                        Shoe                   2        |


  iii) Dis-assembly :-

  • This option is available for Disassemble a production order which is not closed yet.
  • Disassemble option can be use when we want to sale a separate parts of Finished Goods
    • Example
      • Disassemble a Set of Cricket kit in to child items & sold it. 
      • If the customer is return back the “Cricket Kit” because of some damage in BAT.

                            In that case you can use this type for return back the component items into stock.

                            then do Inventory transfer to scrap warehouse of damage items and good items to Component warehouse

2)  Enter Planned Quantity i.e Production Quantity of item.

      Values of planned quantity in row level will change according to value of planned quantity in title level.

        It is done on the basis of base quantity values set in BOM for that item.

3)  After filling details of Production Order click on Add Button in bottom of form.

      now production order will add to database.

6) How to complete production.


            i) Manual:-

        • When Issue method of item is Manual then only you can Issue Raw material for production i.e Issue For Production step will done.

                                Production Steps are,

                                  a) Production order

                                  b) Issue for Production

                                  c) Receipt from Production

                                  d) Close.

          ii) Back-flush:-

        • You can not Issue Raw material for items who have Back-flush issue method.
        • When Issue method of Item is Back-flush then Issue for production step will skip

                      Production Steps are,

                        a) Production Order

                        b) Receipt from Production.

                        c) Close.

Their is simple  5 steps to complete production,

  i)  Create & Add Production Order

  ii) Change Planned status to Released status.

  iii) Issue for Production

  iv) Receipt from Production.

  v) Change Released status to Closed status.

i)  Create & Add Production Order.

  • Create production order as explain in above i.e. in 5th Point.
  • After successfully creating & adding production order document, initial status of  production order is Planned.


ii) Change Planned status of production order to Released status & Update production order.


  • Their is 3 type of status in Production Order
    • Planned
    • Released
    • Closed.
      • Planned  :-
          • After adding production order its initial status is Planned status.
      • Released :-
          • After changing planned status of production order to Released then only we can do next steps of production
      • Closed :-
          • After changing production status Released to Closed.Production order can not be change.

iii) Issue for Production order.

          Note :- Component items Issue Method must be Manual.

                       To setup Issue Method as a Manual open Item master data of that Item.

  • In this step production order actually released on shop floor for production.
  • We can do Issue for production only when production order is i released state.
  • issue a material for released status production order.
  • Steps in Issue for Production is as below,
    •   Right click on production order select “Issue components” option from list


    •   If Required change Quantity in “Issue for Production Order”
    •   Click Add Button at bottom of Issue for Production form


  •   After  adding Issue for production production order will look like,


iv) Receipt from Production.

  •   After completing a production process production order come in this step.
  •   Complete Quantity & Rejected Quantity of Finished good is enter in this step.

  ->Right click on production order select “Report Completion” option from list


  ->Enter Complete & Reject Quantity of finished good.

  ->Click Add Button at bottom of Receipt from Production form.


  • After  adding Receipt from production production order will look like,


V) Close Production Order:-

  • Change Released Status of production order to Closed Status.
  • Once production order close then we can not change production order again.
  • Update Production Order by clicking Update button.


7) How to Disassemble a production order.

              Note:-Production order can be disassemble only when it is in open status.

              There is few steps to Disassemble Production Order.

    •   Create Duplicate Production Order of production Order which you want to Disassemble Press Ctrl+D.
    •   Change type of Duplicate production order (Standard) to Disassemble & update Production Order. 
    •   Change status of Duplicate production order(Planned) to Released & update Production Order.
    • D2.png
    •   Open Issue for production
    •   Click & select Disassemble order.


    •   Add Issue for Production order.


    •   Open Receipt from production
    •   Click & select Return Component.


    •   Select Items to be return from given list & click “OK”.


    •   Add Receipt from Production order.
    •   Now Check Stock of all item which we select in Receipt from Production->Return Component.

                    It will increase by quantity we return.

    •   Change Released Status of production order to Closed Status & Update.


8) What is Multiple BOM & How to set Multiple BOM.

  • Multiple Bill of Material:-
    • It is BOM which contain another BOM,
    • Example:-In Cricket kit their is 2 BOM.

      Cricket kit contain

                  Bat, Ball, Bells,Stumps,Helmet,Hand gloves,leg Pads & Shoe set.


    • Shoe kit contain:-

      Shoe,Laces & Socks


  • How to set Multiple Bill of Material:-
    • In Multiple BOM 1st set BOM for Semi finish goods & then for Finish goods.
  • Example:-

  •         BOM For Shoe (Semifinished Goods)                        BOM For Cricket kit (Finished Goods)

            ————————————————                         ————————————————

            Item       Quantity    UOM                                             Item          Quantity         UOM

            Shoe         2             Nos                                              Bat                     1           Nos

            Lays         2              Nos                                              Ball                    1           Nos

                Sox           2              Nos                                             Stumps             6           Nos

                                                                                                     Bells                 4            Nos

                                                                                                     Helmet              1            Nos

                                                                                                     Hand Gloves     2            Nos

                                                                                                     Leg Pads          2            Nos

                                                                                                     Shoe                 1            Set


  • Do the production process as above for Semi finished goods first then do the production process for Finished goods.


          Any Question or suggestions for me please post below,

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      Author's profile photo Former Member
      Former Member

      Very detailed and professional post.

      Keep this way!

      One comment though - I would emphasize that if issue method is Back Flush, the raw materials will be automatically issued by SBO once the Production Order is closed.


      Author's profile photo Nagarajan K
      Nagarajan K

      Hi Santosh Dhere,

      Thanks for posting such detailed production order process.

      It will be more efficient, if you explain handling o return, scrap or rejection during production.

      All the best.

      Thanks & Regards,


      Author's profile photo Prasanna s
      Prasanna s

      Hi Santosh,

      You done a good job, keep posting....

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      @ Beni:- Thank you beni.

      @ Nagarajan sir:- Thank you very sir for this nice questions i will get back to you with                                         answers as soon.

      @ Prasan :- Thank you sir...

      Author's profile photo Former Member
      Former Member

      Dear Santosh,

      This is a very nice topic, Congratulations.........

      Thanks & Regards

      Umesh Vaidya

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      Thank you Umesh..

      Author's profile photo Javier Faces Santos
      Javier Faces Santos

      Hi Santosh

      Lot of thanks for this detailed and clear explanation of Production process. It is really useful to me, because I am not very familiar with this module, as it is not being used at my end. Already bookmarked.

      Thanks again and regards

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      It's my pleasure Javier..

      Thank you..

      Author's profile photo Former Member
      Former Member

      Nice and detail explanation.

      Thank you Santosh for posted and it's useful for us.



      Author's profile photo Former Member
      Former Member


      It is very useful blog for very new comers to understand the production process.

      Great Approach.

      Author's profile photo Former Member
      Former Member

      Worth doing stuff...

      Author's profile photo Former Member
      Former Member

      Hi Santosh,

      Good blog for learning Production order for fresher .Even i am one of them

      I want to add one point .In BOM Type under Bill Of materials there is an option in the drop down menu for template. If we select template and put the parent and child items and save it. Then

      While doing an SQ  you want all the parent & child items to be included then you need not enter the whole list manually .Instead you can just select the parent item in the line item and the rest child items would appear automatically as you would have set as template in the production order.

      This would help if there huge number of child items to be added at one stretch,

      Thanks & Regards

      Darshan Desai

      Author's profile photo Former Member
      Former Member

      Hi Santosh,

      Thank you very much for such a good blog post. This will freshers to understand the producton process in SAP B1.


      Manoj Tilekar

      Author's profile photo Former Member
      Former Member
      Blog Post Author

      @ Paramveer :- Thanks Paramveer..

      @ Darshan :- Thank you for adding  valuable point in this discussion, i not mention your point in this post because here i am concentrating only on production related process.But let it be you done that good job. 🙂

      @ Manoj  :- Thanks manoj..

      Author's profile photo Former Member
      Former Member

      great job!

      just one comment, I think the child item doesn't have to be "physical" materials? They can be virtual items like labor, etc.

      Author's profile photo Former Member
      Former Member

      Hi Santosh

      Well done .... Congratulations.........

      and one FG item and diff BOM.....

      Author's profile photo Former Member
      Former Member

      Hi Santosh-Why are you able to Complete a Production Order without Issuing Components that are flagged as Manual.


      Author's profile photo Former Member
      Former Member

      By the way, the Component is also Serialized and a Component of a Phantom BOM.

      Author's profile photo Former Member
      Former Member

      Great tutorial. I am very new to SAP and sometimes it is very hard to find a simple description that doesn't go over my head. Thank you!

      I have a possible deviation that I wonder if you could address? I am getting confused with the warehouse organization. I send parts out for completion and I would like to be able to show them as being issued to an outside location.


      Production order for part number 106276.

      Raw material is part number is 106275.

      Both parts are inventoried in whse 289.

      I want to be able to issue the raw materials to whse MS for completion and receive from production into whse QC.

      At what point in the above process would I use each warehouse to ensure the raw material is pulled from the correct warehouse and show the correct quantity being processed in warehouse MS. Finally, where would I put the warehouse that they will be received into.


      Author's profile photo Former Member
      Former Member

      After a bit of time spent in our "test" company, I figured out how to do it. When I create the production order, in the top left headers, I use the warehouse that the raw materials are being sent to, MS in this case. Then when reviewing item master data, it shows the raw material as committed and the parts on order in the MS warehouse. When I do the receipt from production, I enter the warehouse the parts are going to, QC, and complete the transaction. In the end there is trail of the parts journey and all of my quantities stay accurate.

      Author's profile photo Former Member
      Former Member

      Hi Santosh,

      Good Job...!!!

      You have explained in detail standard production process in SAP Business One.

      But as Nagarajan sir said please try to cover up the Rejection , Scrap processes also in your next attempt.



      Author's profile photo Former Member
      Former Member

      Good santosh.

      Author's profile photo Former Member
      Former Member

      What is the procedure of BOM when there is 2 or more production(FG) with same input?



      Author's profile photo Greisy Osio
      Greisy Osio

      Hi You save my life with this blog on Production module 🙂

      Author's profile photo Pradnya S
      Pradnya S


      With the help of your post, I understood dis - assembly and return component concept very well.

      Also, I would like to bring one point to your notice BOM Type - Sales BOM.

      This you can use when you sale packages.

      If this concept is explored, your blog will be more informative.



      Author's profile photo Former Member
      Former Member

      Nice & detailed post.

      I have an issue with “Return Components”. The Production Cost won’t get changed after the Retuned Components added.

      • Production Order Total Value 1000
      • Issue for Productions Total Value 1000
      • Return Components Value 200
      • Now the Final Item’s cost must be 800 but it keeps in 1000

      How can I solve this issue… please suggest


      Author's profile photo Farrukh Hussain
      Farrukh Hussain

      Good and keep it up,


      i have 100 pieces in stock

      make a production order  for 90 pieces

      Released PO of 90 pieces

      but when i go on report completion then i can add 100 pieces  over 90 pieces

      how can i resolve this issue that  i can only complete 90 pieces not 100 pieces

      please sugest