Manufacturing Settings in ERPNext
Manufacturing Settings in ERPNext allow organizations to configure how production activities are executed across the manufacturing workflow. These settings control raw material consumption, capacity planning, warehouse defaults, production limits, job card behavior, and other manufacturing preferences, enabling businesses to tailor the production process according to their operational requirements.
Navigate to:
Home → Manufacturing → Settings → Manufacturing Settings
Raw Materials Consumption
The Raw Materials Consumption section defines how materials are consumed during manufacturing and how ERPNext calculates material usage and production costs.
1. Allow Continuous Material Consumption
When this option is enabled, manufacturers can consume raw materials continuously without immediately producing the finished goods within the same Work Order.
This is particularly useful for long-running manufacturing processes where production takes several days or weeks, but raw materials are consumed regularly throughout the production cycle.
Instead of waiting until production is completed, ERPNext allows users to create multiple Material Consumption Stock Entries, ensuring inventory accurately reflects material usage over time.
If manufacturing a product takes one month and raw materials are consumed daily, Continuous Material Consumption allows daily stock consumption while the finished goods can be recorded once production is completed.
2. Backflush Raw Materials Based On
This setting determines how ERPNext calculates the quantity of raw materials consumed during manufacturing.
The available options are:
- Material Transferred for Manufacture – Consumes only the quantity that has been transferred to production.
- BOM – Consumes the quantity defined in the Bill of Materials regardless of transferred quantity.
The selected option is automatically applied whenever manufacturing Stock Entries are created.
3. Validate Components and Quantities Per BOM
Available from ERPNext Version 15, this option validates that the components and their quantities exactly match the Bill of Materials during manufacturing.
This validation is applicable only when Backflush Raw Materials Based On is set to BOM.
When enabled:
- The system verifies component quantities during Material Transfer for Manufacture.
- The same validation is performed during Manufacture Stock Entries.
- Users cannot modify component quantities beyond the BOM specification.
- Users cannot remove mandatory BOM components.
If users modify quantities or remove components that are defined in the BOM, ERPNext displays a validation error and prevents the transaction from being submitted.
4. Get Raw Materials Cost from Consumption Entry
This option becomes available only when Allow Continuous Material Consumption is enabled.
When enabled, ERPNext calculates the raw material cost of manufactured goods using the actual Material Consumption entries instead of estimated BOM values.
This ensures manufacturing costs are based on the actual quantity and valuation of materials consumed during production.
Capacity Planning
Capacity Planning helps manufacturers schedule production efficiently by considering available workstations, operating hours, holidays, and existing Work Orders before accepting new production requests.
1. Disable Capacity Planning
When enabled, ERPNext skips capacity planning during production scheduling.
If disabled, the system evaluates workstation availability before scheduling operations and creating Work Orders.
2. Allow Overtime
Allows production activities such as Work Orders and Job Cards to be scheduled outside the normal working hours defined for workstations.
3. Allow Production on Holidays
When enabled, ERPNext permits manufacturing operations on dates marked as holidays in the organization’s Holiday List.
4. Capacity Planning For (Days)
Specifies how many days in advance ERPNext should evaluate workstation capacity while planning production activities.
5. Time Between Operations (Minutes)
Defines the minimum time interval maintained between two consecutive manufacturing operations during production scheduling.
Default Warehouses for Production
These settings automatically populate warehouse fields in manufacturing documents, reducing manual data entry and maintaining consistency.
1. Default Work In Progress Warehouse
Automatically fills the Work In Progress Warehouse field in newly created Work Orders.
2. Default Finished Goods Warehouse
Automatically populates the Target Warehouse where finished goods are received after manufacturing.
3. Default Scrap Warehouse
Automatically assigns the warehouse used for storing scrap generated during manufacturing.
Over Production for Sales and Work Orders
These settings define the allowable tolerance for producing quantities beyond planned production.
1. Overproduction Percentage for Sales Order
Specifies the maximum percentage by which manufacturing can exceed the quantity ordered in a Sales Order.
2. Overproduction Percentage for Work Order
Defines the maximum allowable production quantity beyond the quantity specified in the Work Order.
These tolerances help manufacturers accommodate unavoidable production variations without creating validation issues during manufacturing.
Job Card Settings
These settings control how ERPNext manages production costs and material transfers at the Job Card level.
1. Add Corrective Operation Cost in Finished Goods Valuation
When enabled, ERPNext includes the cost of corrective operations while calculating the valuation of finished goods.
This ensures additional labor or operational expenses incurred during corrections are reflected in the product cost.
2. Allow Excess Material Transfer
Allows users to transfer additional raw materials to a Job Card even after the required quantity has already been transferred.
This is useful when previously transferred materials become damaged, defective, or unusable and additional materials are required to complete production.
Other Settings
The Other Settings section contains additional configuration options that influence BOM management, inventory creation, and Work Order behavior.
1. Update BOM Cost Automatically
When enabled, ERPNext automatically recalculates BOM costs whenever the valuation rate, price list rate, or last purchase rate of raw materials changes.
2. Set Operating Cost / Scrap Items From Sub-Assemblies
When using Multi-Level BOM, enabling this option includes operating costs and scrap items from sub-assemblies while calculating the valuation of finished goods.
This is particularly useful when manufacturing without Job Cards but still requiring complete production costing.
3. Make Serial No / Batch from Work Order
Automatically generates Serial Numbers or Batch Numbers for finished goods when a Work Order is submitted.
This simplifies inventory tracking for serialized and batch-controlled items.
4. Allow Editing of Items and Quantities in Work Order
When enabled, users can modify the raw materials and their quantities directly within a Work Order.
ERPNext preserves these manually entered quantities and does not automatically reset them according to the Bill of Materials.
This option provides flexibility for manufacturers who need to adjust material requirements during production while retaining their custom changes in the Work Order.
Key Summary
Manufacturing Settings in ERPNext provide comprehensive control over production operations by configuring material consumption, capacity planning, warehouse defaults, production tolerances, job card behavior, BOM costing, and Work Order management. Properly configuring these settings helps organizations standardize manufacturing processes, improve inventory accuracy, enhance production scheduling, and maintain consistent manufacturing costs across the production lifecycle.
