Manufacturing ERP in Riv-ERP: Production Models, Production Orders and Cost Allocation

In a factory, knowing how much you sold isn’t enough; you need to know what the product actually cost you and where the materials went. Riv-ERP provides manufacturing ERP capabilities in both of its editions, and this guide explains the full cycle.

1. The production model (bill of materials, BOM)

In RivDesktop, the model defines the raw materials going in and the products coming out:

• More than one product from the same process, with a cost allocation ratio between them (totaling 100%).
• Sub-models for semi-finished products, so the system explodes the full tree during planning.
• Accounts and expenses linked to the model.
• One active model per product, with a model preview and comparison screen to choose the most economical one.

2. The production order: what do I need and what am I missing?

You enter the required products and quantities in the production order, and the system explodes the bills of materials at every level and shows the total required materials against the available balance in the warehouse, along with the difference. From the same screen you handle shortages through a purchase request or a transfer request from another warehouse.

3. Operation stages on a board

Production orders and manufacturing documents appear on stage boards that refresh automatically, and you move each order to the next stage with the “Complete Operation” button or return it to the previous stage. This way the production manager knows where every order stands.

4. The manufacturing document: issue, receipt and journal entry in one step

When a manufacturing document is saved, the system automatically creates a raw materials issue document and a finished goods receipt document, along with their journal entries. The “Calculate by Quantities” button allocates material cost to the products by ratio or quantity, and changing the number of units produced updates all quantities.

5. Overhead allocation

Electricity, wages, maintenance… The expense allocation document reads the balances of the expense accounts for the period and allocates them to manufacturing documents:

• Equally.
• By production quantities.
• By production costs.

So they become part of the finished product’s cost instead of remaining a general expense.

6. Variance from standard

The manufacturing variance report compares the standard quantity from the model with the actual quantity, for both raw materials and products, and shows the difference and its percentage. This is where you uncover waste or excess consumption.

Manufacturing in Riv-ERP Cloud

The cloud edition supports discrete and process manufacturing:

• Bills of materials and routings, and cost drafts.
• Work orders, assembly and disassembly, and material consumption.
• Material planning for each sales order or work order.
• Reports on actual vs. planned consumption, part build rate, daily production line, and work downtime.

To choose the right edition for your factory, read the comparison of the two editions.

FAQ

Does Riv-ERP support more than one product from a single manufacturing process?

Yes, the production model in RivDesktop accepts multiple products with a cost allocation ratio between them.

How do I find the materials missing for a production order?

The production order explodes the bills of materials at every level and shows required vs. available quantities and the difference, and lets you handle shortages with a purchase or transfer request.

How are indirect expenses charged to the product?

Through the expense allocation document, equally, by production quantities, or by production costs.

Does the cloud edition support process manufacturing?

Yes, Riv-ERP Cloud supports discrete and process manufacturing with material planning.

Book a demo: 📲 +966 55 200 7190 · ✉️ Info@riv-erp.com