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This hierarchy enables

-Accurate production planning-Cost roll-up calculations-Inventory tracking of nested components-Simplified manufacturing of complex products

Key Concepts

-Parent Item: Finished product (e.g., Ovita Waters 500ml).
  • -Child Items:
    • -Raw Materials: Base components (e.g., bottles, caps).
    • -Sub-Assemblies: Intermediate items (e.g., “Pre-Mixed Oil Blend” for Luca Engine Oil).

1.0 Step-by-Step Setup

1.1 Create Sub-Assemblies

Define reusable intermediate products:
  1. Go to: Stock > Items > New Item
  2. Set Item Type: Sub-Assembly.
  3. Example:
    • Item Code: PRE-MIX-OIL
    • Item Name: Pre-Mixed Oil Base for Luca Engine Oil

1.2 Build Parent-Child Hierarchy via BOM

Link components to finished goods:
  1. Go to: Manufacturing > BOM > New
  2. Configure:
    • Item: Select finished product (e.g., “Luca Engine Oil 5W-30”).
    • Quantity: Output quantity (e.g., 100 liters).
    • With Operations: Enable if assembly steps exist.
  3. Add Components:
    ItemTypeQty
    PRE-MIX-OILSub-Assembly95 L
    ADDITIVE-PKGRaw Material5 L
    20 units20 units20 units

2.0 CGIC Product Examples

Onina Tissue

LevelItemTypeQty
ParentOnina Tissue (24-pack)Finished Good1
ChildTissue Core RollsSub-Assembly24
ChildPulpRaw Material5 kg
ChildAdhesiveRaw Material0.5 L
ChildPackaging BoxRaw Material1

Valdana Bread

LevelItemType
ParentValdana Bread LoafFinished Good
ChildDough BatchSub-Assembly
ChildPackaging SleeveRaw Material

3.0 Key Features

  • Cost Roll-Up: Auto-calculates total cost (e.g., Pre-Mixed Oil + Additives = Luca Oil cost).
  • Nested Manufacturing: Produce sub-assemblies first (e.g., make Dough Batch before baking Valdana Bread).
  • Version Control: Track BOM revisions for formula changes.