Finished Goods Assembly

The Finished Goods module forms part of the production functionality in DEAR Inventory. It helps you keep track of the use of raw materials as well as associated costs throughout the manufacturing process. The Finished Goods function can only be used with products that have a Bill of Materials with their component parts. 


For Disassembly of Finished Goods (including auto-disassembly), see Disassembly


NOTE: DEAR does not currently support checking/enforcing uniqueness of serial numbers, and it is possible to enter duplicate serial numbers into the system. Please be aware of this when carrying out assembly operations. This is an active feature request on our forum. You can make and vote for feature requests on our forum, requests are reviewed based on popularity and importance for inclusion in future development releases.


Prerequisites


Table of Contents


Adding a Bill of Materials to a Product

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The assembly function can only be used for items that have a Bill of Materials showing their component parts. If you already have products with a Bills of Materials, skip to Assembling a Finished Product


For manually assembled products, the BOM is treated as a draft, and components/services can be added, changed or removed at the Assembly Order and Pick stage. For auto-assembled products, it is not possible to change the BOM components during assembly. 


NOTE: To create a product with a Bill of Materials, the component products must already be created in DEAR.


To add a Bill of Materials to an item:

  1. When creating a new product or editing an existing product, check the Bill of Materials box in the document header.



  2. This activates the Bill of Materials tab.

  3. Configure the Bill of Materials settings. Check the Auto-assembly/Kit box to allow DEAR to automatically produce the item after the sale order is authorised, assuming there are enough components in stock. See Automatic Assembly for more information. 
  4. Check the Auto-disassembly box to let DEAR automatically disassemble the products after the purchase order for them is completed. You may also choose to assign Additional Units of Measure to the item for this.

NOTE: Only FIFO, FIFO-Batch and Special-Batch costing methods support auto-assembly/disassembly. 

  1. The default Quantity to Produce is set to 1. You may change this if needed. This should reflect the quantity of finished goods that will be created from the BOM components. 
  2. If you have a video that shows how the product is assembled, enter the link in the Assembly Instruction URL box.
  3. Click the + Product button to select the component products from your inventory.



  4. Enter the Quantity of each component product required in the assembly. 
  5. Enter the Wastage %, Wastage Quantity and Disassembly Cost % if required.
  6. To include service items associated with the disassembly, click + Labour and Overheads. When adding service items, it is required to include an Expense Account.


Computing Assembly Costs

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If Wastage %, Wastage Quantity and/or Disassembly Cost % are left blank when adding a Bill of Materials, DEAR splits the cost of the components equally between product lines.

For example, say you have a Finished Product A with the following component parts: [2 x Component Product X] + [1 x Component Product Y].

If Product A costs $100, the default settings in DEAR will set to $50 as the cost of Component Product X and $50 as the cost of Component Product Y.

Since there are two (2) instances of Component Product X, the $50 cost for producing it will also be split into two. Thus, each Component Product X costs $25.

Suppose that you wish to set your own rules. You estimate that the cost of product Y is $80 and the cost of product X is $10 each. Your disassembly cost percentage will be 20% for the first line (product X) and 80% for the second line (product Y).


NOTE: The BOM for the finished product estimates a cost using either Average Cost, Latest Purchase Cost, or Fixed Purchase Cost. This is for your reference only. The actual cost of finished goods will be calculated using the costing method of each individual component allocated to an assembly and can vary from "Total" cost displayed in the BOM. Actual costs associates with finished goods can be seen using the Finished Goods Analysis Report or the Unit Cost per production run can be seen from the Assembly List. 


Assembling a Finished Product

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Assembly can be performed manually or automatically. If an order is placed for a finished product whose components are not in stock, the missing components will be made available to backorder


Manual Assembly

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NOTE: If finished good components are backordered, the assembly will not be automatically completed when the components are received. The assembly must be manually authorised once the required components are back in stock.


To manually assemble a finished product:

  1. Navigate to Production > New > Assembly.
  2. Choose a Location where the product will be manufactured. 
    • NOTE: If purchase process settings (Settings -> General Settings -> Purchase process customisation) limit availability to selected location only, component products must be in the same location as the assembly in order to be picked. You may need to perform a Stock Transfer to transfer components to the correct location. 
  3. Enter either the Product Name or SKU, then select the product from the list. Only products with a Bill of Materials will be shown.
  4. Choose a Work in Progress Account and a Finished Goods Account.
  5. Enter a Work in Progress Date (assembly start date) and Completion Date when applicable. 
  6. Enter a Quantity to assemble. Use Maximum Quantity to calculate the maximum number of assemblies that can be performed with your available inventory.



  7. Click Load BOM to add the component items to the assembly from the Bill of Materials. If needed, edit the Bill of Materials by either clicking or Adding more items and adding additional components to the Bill of Materials. You can also change the quantity of the current components used which will ultimately affect the total quantity.
    • Total quantity figures in red indicate insufficient components that will need to be ordered to complete this manufacturing run. In case the total quantity of the components is insufficient, you can still proceed with authorising the order, which will automatically add the out of stock components to the backorder section. See Backordering Out-of-Stock Components
  8. Authorise the order.

  1. Go to the Pick tab, then use Auto Pick to automatically select the raw ingredients based on the costing method selected. If you know that the total quantity of raw components used is higher or lower than the total quantity displayed in the order stage, you can amend that here.
  2. Allocate the items to the production room physically by taking them out of the inventory. You must have enough items in stock to complete the assembly order.

NOTE: Depending on your BOM settings, costs can be estimated from Average Cost, Last Purchase Price or Fixed Purchase Price. Sometimes this can lead to costs being estimated wrong on this screen, or displaying as 0 (e.g. if there was no last purchase price in the system.). This will not make the assembly incorrect.

The actual cost of finished goods will be calculated using the costing method of each individual component allocated to an assembly. Actual costs associated with finished goods can be seen using the Finished Goods Analysis Report or the Unit Cost per production run can be seen from the Assembly List. 
  1. Before completing the assembly, you can still amend the actual yield of the manufacturing run if it was higher or lower than expected. Completing the finished goods task will increase the total quantity of the finished product by the actual yield.
  2. Once the manufacturing run is completed, click the Complete button.


Automatic Assembly

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Auto-assembly is triggered when a sale order for the finished good is authorised. Currently, it is not possible for auto-assembly to be triggered at another point of the process (e.g. fulfillment, payment). 


NOTE: Only FIFO, FIFO-Batch and Special-Batch costing methods support auto-assembly. 


To assemble an item automatically:

  1. Navigate to Inventory > Products.
  2. Select the product you wish to assemble automatically.
  3. Check the Auto-assembly box.
  4. Save the product.


Important information about auto-assembly:

  • Auto-assembly is not triggered if there is enough stock of the finished good already in your inventory to fulfil any outstanding sale orders EXCEPT for sales from ecommerce channels. 
  • Sale orders from ecommerce channels will automatically trigger auto-assembly even if there is sufficient finished good stock. This cannot be changed at this point in time but the option to change this setting will be included in a future release. 
  • Unlike for manual assembly, it is not possible to manually adjust the quantity of components and wastage for the assembly. 
  • Auto-assembly will only be triggered if there are enough components in stock at the sale location upon sale. authorisation. Even if DEAR pick settings allow to pick from All Locations, auto-assembly limits picking to the same location as the sale. 
  •  If there are not enough components in stock, you can either complete the Backordering Out-of-Stock Components process, or the Using Out-of-Stock Components for Auto-Assembly Report process. 
  • When an auto-assembly is triggered from a sale order authorisation, it will check for negative availability of the finished good in that location. If enough components are in stock, auto-assembly will assemble enough units for the sale order and negative available stock. If a limited number of components are available, auto-assembly will build enough to fulfill the sale order first, then as many as it can from the remaining components. 
  • Auto-assembly will never create a partial assembly.  
  • If a sale is undone and reauthorised, auto-assembly will use the new date of authorisation. 


Using Out-of-Stock Components for Auto-Assembly Report

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This report was released in a 2019 update to simplify reordering auto-assembly components. You can read more detailed information about the report at Out-of-Stock Components for Auto-Assembly Report. This is an alternative to the Backordering Out-of-Stock Components method shown below. 


  1. A sale order is authorised for a finished good which is out of stock and has auto-assemble enabled. This can also be a sale order from an e-commerce channel.
  2. Upon authorisation, a notification will appear telling you that requested stock exceeds available stock. Click Backorder.

  3. The finished good will not be assembled, and components to be added to the Out-of-Stock Components for Auto-Assembly Report.
  4. Go to Reports -> Out-of-Stock Components Auto-Assembly Report. You will see out-of-stock components, organised by Location and Finished Good SKU.

  5. You can now use this information to create a purchase order for the out of stock components. Make sure that stock is received in the location indicated on the report. 
  6. Authorise the Stock Received tab.
  7. Now the components are back in stock, return to your original sale order.
  8. Undo the sale order, then Authorise the sale order again. With the components back in stock, auto-assembly will trigger and the sale order can be completed.


Backordering Out-of-Stock Components

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Authorising an assembly order when some components are out of stock will make the out of stock components available for backorder. Products available for backorder can be viewed from Purchases -> Reorder Backordered. Here is a step-by-step explanation of the process. You may want to read Backorders for more information about the Backorder function. 


If you are starting from a sale order for an out-of-stock finished good, start at step 1. If you are starting from manually assembling a product with out-of-stock components, start at step 6. For auto-assembly products, you may prefer the Using Out-of-Stock Components for Auto-Assembly Report process. 


NOTE: Components for assembly must have at least one assigned supplier for this function to work. See Adding a Supplier for more information. 


  1. A sale order is authorised for a finished good which is out of stock. The finished good may be set to manual assembly or auto-assembly.

  2. Upon authorisation, a notification will appear telling you that requested stock exceeds available stock. Click Backorder to proceed. The finished good will now appear in the Reorder Backordered section.

  3. Go to Purchase -> Reorder Backordered. You can filter by the sale order location or the sale order customer to find the backorders relevant to this order. Select your components supplier to display the finished good to backorder. 
    • NOTE: If you have suppliers for the finished good, you will also be given the option to order directly from the assigned suppliers. This will give you multiple options to select. You only need to select one to proceed. If the system creates a PO task rather than a FG task, you have generated an order for the whole unit. Void the PO and try again to create the FG task. 
  4. Select the finished good and click Reorder to generate a Finished Good task.

  5. Follow the link in the notification or go to Production -> Assemblies to see the newly created Finished Good task. In the Notes field you will see which sale order the assembly order has been created for. Open the task.

  6. Products with insufficient quantities will be displayed in red. Click Authorise to authorise the assembly order and make the required component quantities available for backorder.

  7. Go to Purchase -> Reorder Backordered. You can filter by the sale order location or the sale order customer to find the backorders relevant to this order. Select your components supplier to display the components to backorder. 
  8. Select the required components and click Reorder. One or more purchase orders will be created for the components.

  9. Follow the link in the notification or go to Purchase -> Purchases. Authorise the PO and process the purchase to receive stock. Make sure the stock is received into the assembly location. The received components will automatically be allocated to the finished good task.

  10. As soon as all required components have been received, you will be able to proceed with the pick stage in the manufacturing process. You will need to manually authorise the pick stage to complete the assembly and make the finished good available to complete the sale, even if auto-assembly is selected for the finished good.


Multi-level Assemblies

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See our detailed article about Multi-level Assembly.



View the Assembly List

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You can view all historical Assemblies by navigating to Production -> Assemblies. This also shows the unit cost for each production run. 


See the details of previous assemblies by clicking on each line.


Checking availability of components

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Manual Assembly

You can check how many finished goods can be assembled from available components from the Assembly screen. Press the refresh button next to Maximum Quantity to see how many finished goods can be assembled. 



Auto-Assembly

If a Finished Good is set to Auto-assembly, DEAR will automatically calculate availability based on component quantities. Availability can be seen in Product Availability Report or Product Stock Level Report (Reports -> Inventory -> Product Stock Level Report or Product Availability). 


For example, in the case of an item which can be sold in 6-packs or singles, when you look at the availability report, you can see that there are 6 singles on hand but one 6-pack and 6 singles available for sale.



Furthermore, if you have tags or attributes specifically for finished goods SKUs, then you can filter the report further to only show those finished goods SKUs.


You can also see how many finished good availability from the order screen. When selecting a product to order, you will see as many units available for sale as you have component quantities in stock for. This does not apply to manually assembled products. 




Finished Goods Analysis Report

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This report shows the number of finished goods with their costs split by the components/services used in the assembled product. Use this report to analyse finished goods yield quantity, production cost, and cost of component products and services for a selected reporting period. 


By default, the report shows all finished goods that have been completed, authorized or are currently in progress for the last month. To narrow down the results, you can filter the report by either status = Authorized or status = In progress or status = Completed.


Users need the Inventory Reporting permission to access this report.


Learn more about Finished Goods Analysis Report


Printing Finished Goods

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Once an assembly is complete, you can print the Finished Goods and Product Label within the assembly order itself.



It is not possible to bulk print Finished Goods/Product Labels in this format, however, you can print off information for multiple finished goods from the Finished Goods Analysis report. Simply set filters to show the entries you require (See Managing DEAR Reports for more information about filtering reports) and click Export




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