Odoo Manufacturing (MRP): A Practical Setup Guide

Odoo Manufacturing does a lot for its price. It also exposes every weakness in your data. A BOM with the wrong quantity, a work centre with no capacity, a component with the wrong unit of measure: each of these turns into wrong stock and wrong costs on every order.

Here's how to set it up so it holds together.

1. Clean product data first

Before touching BOMs:

• Make sure every component exists once, with the right unit of measure
• Decide which items are stockable, consumable or services
• Set purchase and manufacturing routes per product
• Set costing method per category (see inventory valuation)

2. Bills of materials

A BOM lists the components and quantities needed to make one unit (or one batch) of a product.

Things to decide per BOM:

• Type. Manufacture this product, kit, or subcontracting
• Quantity. For one unit, or for a batch (e.g. 100 kg)
• Components with quantities and units of measure
• Scrap allowance, if you expect losses
• By-products, if the process produces something else you keep

Kits (sometimes called phantom BOMs) don't create manufacturing orders. When you sell a kit, Odoo delivers its components. Good for bundles and simple sets.

Multi-level BOMs are normal: a finished product uses a sub-assembly that has its own BOM. Odoo plans each level.

3. Work centres and operations

A work centre is a machine, line or team. Set:

• Working hours (calendar)
• Capacity (how many units at once)
• Time efficiency
• Setup and cleanup time
• Cost per hour

Operations on the BOM say which work centre does what, and for how long. Once operations exist, manufacturing orders produce work orders that operators can start and finish on a tablet in the shop-floor view.

If you don't need time tracking yet, skip operations at first. Many businesses start with just BOMs and add operations later.

4. Planning

Odoo can trigger manufacturing orders three ways:

• Manually, by a planner
• Make to order, one MO per sales order line
• Reordering rules, when finished goods drop below a minimum

The replenishment report shows what's needed and suggests orders. Odoo's scheduler runs periodically to process reordering rules. The planning view in Enterprise gives a Gantt view of work orders by work centre.

Be realistic: Odoo's standard planning is good for many SMBs but isn't a full finite-capacity APS. If you need advanced scheduling, plan for an extension or a dedicated tool.

5. Subcontracting

If a supplier makes part of your product, use a subcontracting BOM. Odoo tracks components you send to the subcontractor, receives the finished goods and consumes the components automatically.

6. Quality and maintenance

Enterprise adds Quality (control points, checks, alerts) and Maintenance (equipment, preventive schedules). On Community, OCA modules cover parts of both.

7. Costing

With work centre costs and component costs set, Odoo can compute a product cost from the BOM. Actual MO costs come from real consumption and time. Compare the two regularly. The differences tell you where the BOM, the routing or the shop floor needs attention.

Common traps

• Recording production at the end of the week. Stock is wrong all week.
• Not recording scrap. Real usage gets hidden and costs look too good.
• BOM changes without versioning. Use the PLM app (Enterprise) or a clear change process.
• Unit-of-measure errors. Metres vs centimetres, grams vs kilos. Check every BOM line.

Getting help

See our Odoo manufacturing service, the general manufacturing ERP guide, or book a consultation to talk through your shop floor.