This guide covers extended product management, where products can consist of composite products and their sub-products. Extended product management allows for hierarchical construction of products, meaning a product can be composed of other products. Composite products can be either stockable or virtual. The guide also covers storage and reporting procedures.
Key terms in the guide include composite product, which is a product/model that consists of other products/models (an item that bundles other products/models together). Another key term is sub-product, which refers to a regular product/model that is part of building a composite product.
CONTENTS
- Sub-products and Composite Products
- Handling and Reporting Composite Products
- Default Sub-products for Models and Mass Operations for Sub-products
Sub-products and Composite Products
A composite product refers to a product/model to which other products are connected. For example, if the parts of a shelf are to be considered as separate products (e.g., shelf board, frame, back panel, and leg), they can be created as individual products (with possible models) and then create a shelf product that consists of these previously created parts. Thus, the shelf is a composite product that consists of other products (sub-products). A composite product can be virtual or stockable (physical).
Stockable/Physical (To be manufactured for stock)
- a composite product that is assembled from sub-products and the inventory quantity of sub-products is reduced at the time of assembly, not at the time of use (from an inventory management perspective, the composite product is already formed)
Virtual (Sales Configuration)
- a composite product whose sub-products are stockable, but the product item itself is not stockable, and the product is assembled from other products at the time of use, reducing the inventory quantities of sub-products only at the time of use
Sub-product Hierarchy
The depth of the hierarchy is not limited, so composite products can also be bundled into new composite products if desired. A finished shelf could belong to a larger entity consisting of, for example, a display cabinet, this shelf, and a wall shelf. Similarly, a product that is a sub-product can be composed of smaller parts, such as a light fixture attached to the ceiling of a display cabinet.
Managing a Product's Sub-products
Managing a product's sub-products is done on the product view's Sub-products tab. The page looks slightly different depending on whether the product has models or not.
A composite product is always built by first creating a new individual product. If the composite product is to have models, models are created for this product next, and finally, the composite product structure is formed from sub-products. The composite product structure is formed by linking existing products or product models in the system to the composite product item or its models as sub-products from the product card's "Sub-products" tab.
The difference between a stockable and a virtual composite product is defined in the system by whether the "Stockable" checkbox is checked on the product card for the composite product item or not. If the checkbox is checked, the item is read in the system as a stockable composite product, i.e., a stock configuration. If the checkbox is not checked, the composite product is read as a non-stockable virtual product item, i.e., a sales configuration. Naturally, sub-products set for a virtual composite product can be stockable products, which are handled in inventory management at the time of use of the composite product instead of the composite product item itself.
Product without models
- Initially, sub-products to be handled for the product are selected with their values
- Below these, the selected sub-products are set for the product, or their models, which it actually contains
Main product with models
- Initially, sub-products to be handled for the product are selected with their values.
- If the product has models, default sub-products can be set, which the created models contain (when setting default sub-products, changes can also be updated to existing models, i.e., the function offers mass operations).
- Below these is a list of the product's models, and for each, the sub-products they contain from those initially selected for the product can be set.
Setting Sub-products for a Product/Model
Managing a product's sub-products is done on the product's Sub-products tab.
1. Select the main products/models to be linked. Products are retrieved one by one.
2. Previously selected sub-products are visible at this point.
3. Set the sub-product specifications here. For example, how many sub-products go to the main product and make any changes to purchase prices.
4. Linked sub-products for the main product are visible here.
Selecting sub-products when they are model variations
Below is an example of a model product, sofa armrest. This product has 3 different models that differ in height. By selecting the main product item, the models can also be selected at once as sub-products for the desired composite product.
A product can be added as a sub-product either by selecting the main product of the models or just a specific model.
When the main product of the models is selected, all models become selectable as sub-products for the composite product.
Adding models through the main product as a mass
From the edit icon of the sub-product box of the selected composite product, you can open the function (see image above), where you can select the models to be added, and also decide how many pieces of these models are used in the composite product.
In the opened view, you can select the models to be added, and also decide how many pieces of these models are used in the composite product.
Once the sub-products have been selected, their quantities and effects on the main product's price can be defined. If it is a sub-product with models, the definition must be made per model.
Setting Sub-products
Setting sub-products is accessed from the composite product's sub-products tab and the setting sub-products button. This allows you to define the selected sub-products for the composite product.
1. Select the desired products that were previously defined to be linked to the composite product. If it is a product with models, only one model should be selected unless the product consists of multiple models. For example, in this situation, only one armrest size is used in the product's manufacturing.
2. Select the quantity of sub-products used to make/manufacture the composite product. In the example above, the sofa frame includes, for example, 12 springs and 10 meters of upholstery fabric. The units are defined on the products' own product cards.
3. Change in the composite product's sales price, which the selected individual sub-product affects the sales price, if automatic calculation is selected on the product card for sub-products.
4. Change in the composite product's purchase price, which the selected individual sub-product affects the composite product's purchase price, if automatic calculation is selected on the product card for sub-products.
5. Save the selected changes.
Handling and Reporting Composite Products
Handling
Purchase
Composite products cannot be directly handled in purchase processing, and each sub-product must be handled separately. This practically means that composite products cannot be added to purchase orders, as there is no automation built for sub-products in this process for inventory events. Sub-product purchase entries must be made in inventory accounting as individual lines either through a purchase order or without purchase order processing with manual purchase entries for the inventory event.
Sales
The sales processing of a stockable composite product and a virtual composite product differ in the inventory entries made at the time of sale. However, they share the commonality that the sales price formation can be done in the same way for both. On the product card, the final price can be set by the user, or the price can be automatically calculated from the sales prices set for the sub-products by summing them up and multiplying them by the number of sub-products per product.
Sub-products can be assigned their own price in addition to their impact on the final price of the composite product with an absolute price change. This determination is made when the sub-product is linked to the composite product structure. The price change can represent, for example, a manufacturing cost, which changes the value of the final product when one piece or unit of the sub-product is used in the composite product's manufacturing.
Handling a Stockable Composite Product in Sales
A stockable composite product item, i.e., a product to be manufactured for stock, is handled in sales like any individual product, as separate manufacturing entries are made for it in stock, during which sub-products are automatically reduced in stock in the same proportion as they are set to be used in the composite product structure.
Stockable Composite Product Manufacturing Entries
The stock can be sold into a negative balance, so manufacturing entries can also be made retrospectively, thus balancing inventory accounting depending on use cases and customer needs.
Handling a Virtual Composite Product in Sales
A virtual composite product differs, as its name suggests, from a stockable composite product in that it is not a stockable product item itself, but its sub-products can be. Sub-products can also be linked from the product register to other non-stockable product items, such as "service charge for work done per hour." In this case, the significance of the sub-product is only visible in the billing process and how the final price of the composite product is formed if the price is to be automatically calculated directly from the sub-product structure and the user does not want to set the final price of the composite product themselves.
Since no inventory handling is done for the virtual composite product itself, inventory events for its sub-products are created at the time of use of the composite product. In sales, this means that reducing inventory events are created for the sub-products in the inventory information of the sales order or sales invoice when the virtual composite product is taken into sales processing. Inventory events for sub-products are automatically created in the same proportion as they are linked to the composite product structure. During the sales order, sub-products are reserved from stock, and on the sales invoice, they are directly reduced from the stock balance. The stock balance reduction naturally also occurs at the billing stage of the order when an open order is invoiced. In this case, the sub-products reserved from stock are automatically changed to be reduced from stock.
Inventory Management
A virtual composite product is not brought into inventory handling, but inventory accounting only covers the sub-products marked as stockable added to its structure. A stockable composite product is handled in inventory accounting itself, and reducing inventory entries are made for its sub-products automatically when manufacturing entries are made for the composite product.
The difference between a stockable and a virtual composite product is defined in the system by whether the "Stockable" checkbox is checked on the product card for the composite product item or not. If the checkbox is checked, the item is read in the system as a stockable composite product. If the checkbox is not checked, the composite product is read as a non-stockable, i.e., virtual product item. Naturally, sub-products set for a virtual composite product can be stockable products, which are handled in inventory management at the time of use of the composite product instead of the composite product item itself.
All available inventory information and settings in the system can be normally entered for a stockable composite product on the product card:
- Supplier-specific purchase information
- Default warehouse
- Product location in the warehouse
- Default alert level
- Weight (kg)
- Customs tariff
- EAN codes (2 pcs)
Sub-products Inventory Handling
Corresponding inventory settings must be made for sub-products on their own product cards. Default settings are critical in the automatic inventory handling of sub-products when the composite product is handled. For example, the default warehouse is the warehouse from which sub-products are reduced when a virtual composite product is sold or a stockable composite product is manufactured. The inventory setting can, of course, be changed directly from the inventory event line if the sub-product is in multiple warehouses and the balance of a warehouse other than the default is to be reduced. In this case, the change must be made manually with an inventory event.
Reporting & Sub-product Diagram
The composite product structure is reported in two places - in the product register's product listing as sub-product diagrams and on the composite product's product card in the product view and the Sub-products tab.
Below is an example from the product listing, showing a composite product.
This opens the view below, showing the composite product and the sub-products added to it.
The sub-product diagrams show the following information:
- Sub-product structure in a tree model, showing which sub-products the composite product consists of and how many pieces are linked
- Both the composite product's and sub-products':
- Price information
- Inventory information
- The number of composite products that can be composed/used based on the sub-products' inventory situation
- Additionally, it shows whether the composite product is a virtual or stockable product
Product's Sub-product Diagram
On the product card in the product view, sub-products that the composite product consists of are seen at a rough level without detailing the sub-products' inventory information.
On the product card's Sub-products tab, the existing sub-product structure of the composite product can be built and modified. In this view, it can be defined how many pieces of each sub-product are used in handling one composite product and the absolute price change to the composite product's final price for each sub-product. Inventory status is not reported in this view either.
The view can also be accessed from the product listing. In the product listing, the sub-products added to the composite product can be seen for the composite product.
This opens the view below, where the quantity of sub-products, price change, and purchase price change can be edited.
Composite Product Sales Reporting
Sales reporting is done like with other products from the sales reports. Sales reports do not detail sub-products but are implemented at the final product level.
Also, in the sales order or invoice view, sub-products are not detailed, but only composite product items and the price settings brought from them are visible. On orders and invoices sent to customers, only composite product items are seen without sub-products and, of course, the final prices.
Composite Product Inventory Reporting
Entries that differ from the handling of an individual product in inventory are the manufacturing entry for a stockable composite product and the inventory events for sub-products formed from the sales event of a virtual composite product. In both cases, the inventory events for sub-products are automated in the same proportion as they are set to belong to the composite product structure.
Stockable Composite Product Manufacturing Entries
When a sub-product structure has been created for a stockable composite product, manufacturing entries can be made for the composite product, with the formation of inventory events for sub-products automated.
There is also a separate guide page for manufacturing entries.
Default Sub-products for Models and Mass Operations for Sub-products
Default Sub-products for Models
If a product has models, there is an option on the product's Sub-product tab to set default sub-products for the models. These are used when new models are created for the product, so the created model has the set default sub-products linked by default.
Setting default sub-products opens from the Set Default Sub-products link.
In the opened function, default sub-products are selected, their default quantities are given, and the price change is set.
After the changes, press the save button, and the selected sub-products will be linked as sub-products.
If updates are to be made to existing models, e.g., by quantity and price, check the box to reflect changes to existing models as well. This is a useful function if there are many models, and the change can thus be made quickly for all.
Add and Update
- If the model has a sub-product that was edited, the changes are updated to it, but if the product does not have the sub-product, it is added to it.
Update
- If the model has a sub-product that was edited, the changes are updated to it.
Add
- If the model does not have the edited sub-product, it is added to the model.
Setting sub-products is essentially and functionally similar whether sub-products are set for a product, model, or default sub-products for models are being set, so instructions have been written for only one place, as explained in the guide at Setting Sub-products for a Product/Model
Virtual Product/Model (Sales Configuration)
A virtual composite product is used when a sales configuration is to be formed so that sub-products are to be automatically reduced from stock at the time of the sales event, and the composite product item is not manufactured for stock before the sale.
The determination of a virtual composite product is made on the product card by leaving out the stockable setting.
In the sub-product diagram, the box edges of a virtual (non-stockable) product are shown in gray. In the hierarchy, a virtual product is not shown in red if it is not composable, making it clear which concrete (stockable) products prevent the assembly of the composite product.
In the example, the main product model "Wooden Table, White, 100, 80, 100" is a virtual product (i.e., it is not marked as stockable), so the diagram shows how many of this type of composite product can be composed at the time of diagram inspection. A virtual composite product is not composable if there is not enough of one of its sub-products available.
In the structure below, sub-products are reduced from stock during the manufacturing entry. These are stockable products, but the wooden table is a virtual product. If the product is shown in red, it is not in stock. The composable section shows how many pieces of the product can be manufactured at the moment.
Virtual products located in the hierarchy are also shown with gray borders, and instead of inventory information, they have information on how many would be composable based on the inventory information of the sub-products they contain.
The edges of a sub-product are shown in gray if it is not a stockable product. As an example below, assembly cost.
Stockable Product/Model (Manufactured Product)
If the previously examined wooden table were stockable, it would have its own inventory information, and the quantity of its sub-products would no longer have any effect on it. This is because the sub-products have already been reduced from stock earlier when creating the composite product, unlike in the case of a virtual product where the reduction occurs only at the time of sale.
The box edges of a stockable product are shown in black. The box is red if there is not enough of it in stock or its "situation" is zero or less.
Below is an example of a diagram where the composite product is not available in the required quantity.
The composite product and sub-product are shown with a red background when there is not enough stock for the manufacturing process.
Manufacturable: How many products can be manufactured if it is a virtual product that is manufactured through a manufacturing entry.
In Stock: How many pieces of the product are in stock.
Reserved: How many pieces have been ordered.
Incoming: How many pieces have been ordered, which have not yet been recorded as delivered to stock.
Situation: Calculated from the in stock - reserved fields.
Manufacturing Value: Manufacturing cost recorded for the inventory entry.
Average Price: The average price of the product's manufacturing.
Purchase Price: The price at which the product has been purchased from suppliers/supplier.
Keywords: composite product, sub-product, inventory, inventory management, extended product management, model, virtual product
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