Work in progress value and the cost of rejects
Each open production order shows what is tied up in it. That is components picked so far at cost, and machine and labour time booked at the machines' cost per hour. The WIP list adds them up for the month end, and each order shows the value lost in rejects and scrap.
PLANSFrom Growth
The problem it solves
- At month end, half-made goods on the floor are left out of the stock value, or guessed.
- The accountant posts a WIP figure nobody on the floor can explain.
- Scrap is written off quietly, and nobody sees what rejects cost each order.
- The WIP list and the journal entry never agree.
How it works
- Confirm and start production orders as usual. Components picked for an order and time kept on its work orders build its WIP.
- Open Manufacturing > Reporting > Work in Progress. It lists every open order (Confirmed, In Progress, To Close) by plant and item. Each has its WIP Material, WIP Machine and Labour and WIP Value.
- Open an order's Value tab to see its WIP and the value Lost in Rejects (its scrap records at cost).
- At month end, select the orders and press Post WIP Entry. Odoo's WIP journal entry opens for them, from the same figures, so the list and the entry agree.
- Stock by Stage shows the same orders as Work in Progress for any As On date.
Everything it does
What WIP counts
- WIP Material: components picked for the order so far, at their cost (the lot's cost for lot-valued items)
- WIP Machine and Labour: time booked on the order's work orders at each machine's cost per hour; a running timer counts up to now
- WIP Value: the two together
- Only open orders: Confirmed, In Progress, To Close
- Lost in Rejects: the value of the order's done scrap records
- By-products keep Odoo's cost share
Rejects and their cost
- With the shop floor terminal, pieces rejected and scrapped use up their share of the components, so the loss is in the order's cost
- Setting Rejects Use Up Material: on to start with
- Scrap by reason and the production log show where the loss came from
Where it shows
- Work in Progress list, by plant and item
- Value tab on the production order (Production Managers and above)
- Work in Progress stage in Stock by Stage
- Post WIP Entry for the chosen orders
Who uses it
Production ManagerReads WIP and reject losses per order, and checks the list at month end.
AccountsPosts the WIP entry for the open orders at month end.
OwnerSees how much money sits on the shop floor and what rejects cost.
Where you use it
- Web: Manufacturing > Reporting > Work in Progress; the Value tab on each production order; Stock by Stage
- Not in the SmartMy Manufacturing app
What you control
Settings
- Rejects Use Up Material (Settings > Manufacturing): on to start with
- Cost per hour of each machine / station: on the work centre
- Costing method per item category: standard, average or FIFO
Questions
Does the WIP list match the journal entry?
Yes. Both use the same figures: components picked at cost and time booked at the machines' cost per hour. Post WIP Entry opens Odoo's WIP entry for the orders you chose.Is labour counted?
Time booked on work orders counts at the machine or station's cost per hour. Set that rate to include the operator's cost if you want labour in WIP.How do we see what rejects cost?
Each order's Value tab shows Lost in Rejects, the value of its scrap. With the terminal, scrapped rejects also use up their share of the components.Can we see WIP for a past month end?
Stock by Stage values WIP as on any date, but only for orders that are still open today. An order finished since then is left out of the past figure.Related features
PRODUCTION AND JOB WORKStock value by stage: raw, made, at job workers, on hold, rejectedSee what your stock is worth as on any date, split by stage. The stages are raw material, made items, material at job workers, quality hold and rejects, and with Growth work in progress. Per plant, item by item, with each item's costing method.PLANNING, QUALITY AND COSTActual cost, variances and the cost sheetWhen a production order is done, its actual cost is worked out and set against the standard cost. It uses the material really used, the machine and labour time really spent and any job charges. The variances show per order and in a monthly report by item.SHOP FLOORThe shop floor terminal: a tablet at each machineA tablet at each machine or station shows its jobs in big tiles. Operators sign in with a PIN or badge, and start and pause jobs. They count good and rejected pieces with a reason, and stop the machine with a reason. Every count goes straight into the order.PLANNING, QUALITY AND COSTProduction reports: plan against actual, material against BOM, scrap by reasonThree ready reports for the production manager. What was planned and what was made, by item and month. The material planned and used on orders. What was scrapped, by reason. Each opens as a pivot you can turn, filter and export.PLANNING, QUALITY AND COSTStandard cost roll-up from the BOMWork out what each item you make should cost, rolled up level by level. It counts its components, machine and labour time from the bill of materials, and your factory overhead. Keep each standard from a date, and print a cost sheet with office overhead, profit and a suggested price.
See your shop floor on it.
Tell us what you make, how many machines and people you run, and how production is recorded today. We will set up a line with you and run a job on the terminal.