This document discusses how the open source ERP software OpenERP can be used for production planning. It focuses on two key OpenERP modules - manufacturing and warehouse management. The manufacturing module allows companies to manage resources, bills of materials, production routing, scheduling, and reporting. The warehouse management module enables multi-warehouse operations and inventory control. Taken together, these modules provide a complete solution for production planning and supply chain management.

1. OpenERP for Production Planning
OpenERP: Open Source Business Application
Alex Rayón Jerez © 2011
Atlantis – IBIM Program at the University of Deusto
29th of March 2011
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning

2. Main objectives
 For any person or/and any organization, this brief presentation about the
Open Source Business Application OpenERP will permit students know how
this enterprise resource planning tool allows any given company to plan its
production
 There are so many modules within OpenERP, but we are just going to focus
on two of them: manufacturing (allows you to manage your supply chain in
a complete and accurate way) and warehouse management (llows multi-
warehouse management and is based on hierarchical locations structure,
from warehouses to storage bins)
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning

3. Table of contents
 Installation and initial setup
 Architecture
 Warehouse management
 Manufacturing
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning

4. Installation and initial setup
The basic install of OpenERP, including all its components, should not
take more than 30 minutes under any compatible environement (Windows,
GNU/Linux or Mac). Just few steps to take
Basically, initial installation is summarized in two basic steps:
1) Install and configuration of the database server in some of the
computation nodes (Windows, GNU/Linux or Mac)
2) There are two alternatives to interact with the database of OpenERP:
Install a web server that can later be used in any web client
Install a desktop client
Developed under GTK (cross-platform widget toolkit for
creating graphical user interfaces)
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5. Architecture
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6. Warehouse management
Introduction
The warehouse and logistics management in OpenERP allows multi-warehouse
management and it is based on hierarchical locations structure, from warehouses to
storage bins
The unique double entry inventory system, allows you to manage your own internal
locations as well as external locations like customers, suppliers or manufacturing
inventories
It includes:
Warehouse management
Traceability
Inventory control
Products
Automatic Procurements
Reporting
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7. Warehouse management
Warehouse management
The Incoming Shipments represent all suppliers’ orders to be received, generated by the
purchase orders confirmations.
The system allows you to manage back orders, automated inventory valuation, serial
numbers, quality control, etc.
By default, you get one incoming shipment by purchase order, but you can also use
the menu “Incoming Products” to manage reception control by orders lines (in case
of multi orders reception).
The Internal Moves represent internal products moved between several locations in your
warehouses. OpenERP creates some internal moves automatically, according to
specifications defined on the product or on the location form, but you are also allowed to
create them manually for any re-organization purpose inside your warehouses. Outgoing
Packings shows packings that will leave the warehouse.
These packings are generated by all confirmed sale orders and can be in two statuses:
confirmed or available. A package is in the state “confirmed” when the operation is
confirmed but the products are not available on hand.
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8. Warehouse management
Warehouse management (II)
Delivery Orders According to the logistic flows configuration, you can process customer
orders in one, two or more operations. OpenERP proposes a delivery flow in:
One step “Outgoing Packing”: meaning the products are sent in one stock move:
directly from your stock to your customer location
Two steps “Outgoing Packing” then “Delivery Order”: meaning the products are sent
in two stock moves: first the packing preparation, in case of quality control before
sending the packing to the customer, and then the packing delivery
Yet you can also define your own logistics flow, according to your needs
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9. Warehouse management
Warehouse management (III)
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10. Warehouse management
Traceability
Stock Moves. You can track all inventory transactions made in the past or planned in the
future. Every transaction goes from one location to another, one due to the double entry
inventory management of OpenERP. From the product form, you can also obtain the
future stock forecast.
Tracking Lots are used to track logistical units which can be containers for a set of
products, for example. Every transaction line can belong to one tracking lot that refers to
the related box, the pallet or the container. You can get the complete upstream or
downstream traceability for each tracking lot.
With Production Lots (usually identified by bar codes stuck on the products) you can
efficiently track a single product (in this case, it's often called Serial number) or a set of
similar products. You can specify the production lot on every product used in the
inventory transactions. You can get the complete upstream or downstream traceability for
each production lot.
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11. Warehouse management
Inventory control
The Location Structure menu opens the warehouses structure within your physical
locations, partner locations and virtual locations.
By a simple click on a location, you can get a complete inventory location analysis,
for a specified period.
Periodical Inventories: You can create your yearly inventory as well as intermediate
inventories, for all your products or only for a specific location. OpenERP give you the
flexibility to start your inventory from scratch or to get quantities from the system and
then change them after checking the actual stock quantity.
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12. Warehouse management
Products
In OpenERP, a product is an item you can buy and sell. It can be a raw material, a
stockable product, a consumable or a service.
The procurement logistic is managed on the product form (MTS/MTO, ...). The
linked locations functionality allows locations to be linked between each other, to
define paths followed by products (logistics rules).
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13. Warehouse management
Automatic procurements
Minimum Stock rules will help you to avoid out of stock situations.
You can specify the minimum (security stock) and maximum stock quantity that you
want to maintain.
When the stock level will reach the minimum limit, it will automatically re-order the
right quantity to reach the maximum level you specified.
The system will automatically create a purchase order that will just need to be
confirmed by the purchaser.
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14. Warehouse management
Reporting
Inventory Valuation is a report that contains the monetary value of your stock quantity,
for each location of your warehouses structure, and for your real as well as virtual stock
Inventory by location gives you a report of the product quantities by location
Dates of Latest inventories by product report give you the list of all inventories by date
and product for any control purpose
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15. Warehouse management
From supplier to customer
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16. Warehouse management
Stocks
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17. Warehouse management
Basic logistics configuration
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18. Warehouse management
Logistics configuration in a multi-company environment
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19. Warehouse management
Import/Export
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20. Warehouse management
Warehouses
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21. Warehouse management
Scheduling
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22. Warehouse management
Management of lots and traceability
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23. Warehouse management
Management by journal
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24. Warehouse management
Advanced elements of Stock Management
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25. Manufacturing
Introduction
Manufacturing in OpenERP allows you to manage your supply chain in a complete and
accurate way
You can manage resources like human resources or machines
You will be able to create multi-level bills of materials and their corresponding routing
for assembling or manufacturing finished products
A scheduler tool will then deliver the planning and will launch all manufacturing orders
and purchase orders when necessary
A control system will inform you in case of problems during the supply process
Remember Iceland's volcano's case?
Finally, you can analyse your supply chain efficiency thanks to a list of useful reports
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26. Manufacturing
Introduction (II)
It includes:
Resources
Master Data
Planning
Manufacturing
Control
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27. Manufacturing
Introduction (III)
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28. Manufacturing
Resources
Resources: OpenERP allows you to manage two types of resources; materials and human
resources. Resources are defined by their working time and/or their capacity (number of
operations done in parallel in a work center, time to complete a production cycle).
Working period allows you to define the period of activity by day.
With Resources Leaves you can specify the days or periods of inactivity for any
resource.
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29. Manufacturing
Master Data
Master Bills of Materials describe the list of raw materials or sub-products used to make
a finished product
The hierarchical structure allows you to manage multi-level bill of materials.
Bills of materials components are components and sub-products used in Master bills of
materials
Routings define the list of operations to be done in a work center to manufacture or
assemble a given product
One bill of material can be linked to one routing, which describes how to
manufacture or assemble the product
Work Centers are independent units within the manufacturing facility, consisting of one
or several people and/or machines
Work centers are used for the purpose of forecasting and capacity planning
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30. Manufacturing
Planning
Compute schedulers: the scheduler is the heart of the ERP system in terms of planning.
It organizes manufacturing orders based on priorities (sub-products manufacturing,
dates required, etc), launches purchase orders for missing components and assigns
products in stock.
The scheduler tool is usually planned to be launched automatically once a day
This frequency can be adjusted depending on your company's sector and needs
You can also run it manually should you need to
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31. Manufacturing
Manufacturing
Manufacturing Orders describe the list of raw material that will be used for each stage
of production
Raw material can be consumed all at once or progressively during the production
process
In addition OpenERP provides scrap management. Partial production is also possible
The procurement order will schedule a proposal for automatic procurement for the
product which needs replenishment
This procurement will start a task, either a purchase order form for the supplier, or a
production order depending on the product's configuration
Work Orders are manufacturing operations required to produce or assemble products
The different work orders will have different impacts on the costs of manufacturing
and planning, depending on the available workload
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32. Manufacturing
Control
Procurement Exceptions: in the MRP process, procurements orders are created to
launch manufacturing orders, purchase orders, stock allocations, etc.
Procurement orders are generated automatically by the system and unless there is a
problem, the user will not be notified
In case of problems, the system will raise some procurement exceptions to inform the
user about blocking problems that need to be resolved manually (like, missing BoM
structure or missing supplier).
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33. Manufacturing
Reporting
Work Center Load is a projection of loads in a work center for a given a period
The load is expressed in hours (for human resources) or cycles (for machines)
Weekly Stock Value Variation enables you to track the evolution of the stock value,
according to the level of manufacturing activities (consumption of raw materials,
production of finished goods, added accounting value of stock) as they progress in the
transformation process.
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34. Manufacturing
Management of Production
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35. Manufacturing
Bills of Materials
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36. Manufacturing
Bills of Materials (II)
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37. Manufacturing
Multi-level Bills of Materials
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38. Manufacturing
Manufacturing
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39. Manufacturing
Workflow for Complete Production
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40. Manufacturing
Workflow for Complete Production (II)
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41. Manufacturing
Production order in detail
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42. Manufacturing
Scheduling
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43. Manufacturing
Calculation of lead times
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44. Manufacturing
Calculation of lead times (II)
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45. Manufacturing
Operations
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46. Manufacturing
Events and barcodes
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47. Manufacturing
Treatment of exceptions
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48. Manufacturing
Manual procurements
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49. Manufacturing
Manual procurements (II)
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50. Manufacturing
Management of waste and secondary products
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51. Manufacturing
Management of repairs
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52. References
Web sites
OpenERP Open Source Business Applications http://www.openerp.com/
OpenERP Book http://doc.openerp.com/v6.0/book/index.html#books-link
Manufacturing module http://www.openerp.com/products/manufacturing
Warehouse management module http://www.openerp.com/products/wms
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning

53. Copyright (c) 2011 Alex Rayón Jerez
This work (but the quoted images, whose rights are reserved to their owners*) is licensed
under the Creative Commons “Attribution-ShareAlike” License. To view a copy of this
license, visit http://creativecommons.org/licenses/by-sa/3.0/
*
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning

54. Profesor: Ing. Alex Rayón Jerez
Bilbao, March 2011
Facultad de Ingeniería, ESIDE
Universidad de Deusto
Departamento de Tecnologías Industriales, Facultad de Ingeniería, Universidad de Deusto
Avda. de las Universidades, 24, 48007 Bilbao, País Vasco, España
Alex Rayón Jerez
alex.rayon@deusto.es
To contact me, some other ways :-)
http://alexrayon.es/alex-rayon-20/
Atlantis – IBIM Program at the University of Deusto – OpenERP for Production Planning