Skip to Content
This question has been flagged
serviceinventoryproductionconsumablevaluation
3 Replies
2918 Views
Avatar
Chris

We are looking for a solution to include a service in the production costs AND in the inventory valuation.

The service, which does not have to be inventory managed, must then also be billable (e.g. replenishment to order).

Background:
Our finished goods consist of components and a service (fixed amount per product). Inventory value = "cost of components"
Production costs = "cost of components" + "cost of service".

We initially created the service as a service product.

Problem:
The cost of the service is included in the production cost of the product, but not "documented" in the inventory values. If the price of the service changes, we don't see it in the inventory valuation (only just in time on the product page).

In fact, we cannot see what quantities of the item were produced at what price of the service for past Production Orders.

Our approach:
Use the service as a product with stock: the service is first posted to the stock in relation to the stock quantity of already produced products (e.g. 10,000 pieces) and directly reordered during production (possibly at a different price). In this way, the AVCO for the service is always correct and included in the stock value of the product. In addition, the service can be separated in inventory value, as it is also managed separately as a product.

What does not work:
Service as a service product or consumable product: as there is no inventory management and therefore no retroactive calculation of production costs. AVCO also does not work for this type of product.



Is there anything that speaks against our approach (product with managed inventory)? Is there perhaps a completely different idea on how to integrate this service into the manufacturing process?

The requirements are as follows:

- The service needs to be invoiced by the supplier (should be counted to ensure what needs to be invoiced).

- We need to know for each product how much the service cost at the time of production.

- Stock valuation must be possible separately for BoM real goods.


Thank you very much for the solution.

Avatar
Discard
Avatar
Chris
Author Best Answer

Thanky TTN SOLUTION for this.

You are right. As we do not track all the variable costs, we only have this issue. For price changes after manufacturing we have to change the valuation afterwards, that not perfect but works for us.

Your solution might be perfect for a global solution. As we running Odoo.online no Apps can be added. Sorry for that!

Avatar
Discard
Avatar
Bhavin Patel
Best Answer

Hi Chris

It seems like you have a good understanding of the problem you are trying to solve and have already come up with a potential solution by using the service as a product with managed inventory. This approach would allow you to include the cost of the service in the production costs and in the inventory valuation, while also making the service billable and allowing for retroactive calculation of production costs.

There are a few things to consider with this approach, however. First, you will need to ensure that the service product is set up correctly in Odoo with the appropriate inventory settings and cost accounting methods. Additionally, you will need to ensure that the service product is properly linked to the finished product in the bill of materials (BoM) so that the correct quantity of service is included in the production process and the cost of the service is properly allocated to the finished product.

Another consideration is that if the price of the service changes, you will need to update the cost of the service in the service product record and adjust the stock valuation accordingly. You may also need to update the cost of the service in any open production orders or purchase orders that include the service product.

Overall, using the service as a product with managed inventory appears to be a viable solution to your problem. However, you may want to test this approach with a small set of products before rolling it out company-wide to ensure that it meets all of your requirements and works smoothly in practice.

Please let me know if you have any further questions or concerns.

Avatar
Discard
Chris
Author

Thank you @Geek Boy, for your reply.

Just to be correct, we ended up using a real inventory managed product with AVCO calculation for this and labeled it as a service. For Odoo it is a real product. It is also included in the warehouse valuation, which is wrong from a controller's point of view. The stock value is only the physical product not the service. However, since we create a separate service item for each product, we can deduct it cleanly.

Now we do a stock counting for the already finished products, and post this "fake" service product with the previous price in the same quantity in stock (the items have already been manufactured and we know the cost). If the price of the service changes, it is automatically corrected by the AVCO procedure (we buy just in time (MTO)).

As long as you post the RfQ (MTO) before the PO, this should also fit correctly from the AVCO valuation.

As we do not use accounting in Odoo so far, this is no issue for us. Hope I can get your ideas on that again!

Thank you very much.

Bhavin Patel

You're welcome! It's great to hear that you found a solution that works for your specific situation. By using a real inventory managed product with AVCO calculation and labeling it as a service, you were able to incorporate it into Odoo effectively.

I understand your concern about the stock valuation from a controller's point of view, where the stock value should ideally represent only the physical products and not the service component. However, since you have created a separate service item for each product and deduct it cleanly, it allows you to maintain accurate stock valuation for your physical products.

The process you described for stock counting and posting the "fake" service product with the previous price in the same quantity sounds like a reasonable approach. By using the AVCO procedure and ensuring that the RfQ (MTO) is posted before the PO, you can maintain correct valuation for your inventory.

Since you mentioned that you do not currently use accounting in Odoo, it seems like the issue of the stock valuation being included in the warehouse valuation is not a problem for your specific setup.

If you have any further questions or need additional assistance, feel free to ask and Pls Mark as Best Answer.

Avatar
TTN SOLUTION
Best Answer

I'm not sure if setting inventory values for services can solve issues related to product cost pricing, including component costs and production expenses. In Odoo, production costs are allocated to each manufacturing order, allowing for accurate cost control to finish the product. Of course, production costs cannot be calculated at the beginning of the period (e.g. at the beginning of the month). They will be calculated at the end of the month when you have invoices related to electricity, labor costs, etc. Therefore, pre-setting costs seems unreasonable. Currently, although Odoo calculates the cost of goods sold, it does not itemize each cost. I have constructed a simple report that you can try, but it is not a comprehensive solution. I hope you can find a solution soon. Please excuse my imperfect English skills.

Avatar
Discard
Related Posts Replies Views Activity
Why is it possible to produce without inventory?
inventory production
Avatar
Avatar
1
Aug 24
770
Inventory Valuation in Inventory in Odoo v12
inventory valuation
Avatar
Avatar
Avatar
2
Jun 24
3527
Error when doing Manual Value Revaluation
inventory valuation
Avatar
0
May 23
1491
Historical Inventory Valuation by Location
inventory valuation
Avatar
Avatar
Avatar
2
Apr 23
2936
Odoo 13EE - Negative Numbers on Inventory Valuation Solved
inventory valuation
Avatar
Avatar
2
Jan 21
3796