Understanding Double-Entry Stock Management

Just as in accounting, the Odoo system manages counterparts to each of its main operations such as receipts from suppliers, deliveries to customers, profit and loss from inventory, and consumption of raw materials. Stock movements are always made from one location to another.

To illustrate this concept of stock management, see how stock moves are generated by the following operations:

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Managing Physical Inventory Structure

Warehouse

Warehouses are designed for physical locations from which you can deliver to the customer, and to which you receive raw materials. When you buy products from a supplier, you should take account of the Warehouse you use for this purchase. This also enables the end user to not have to choose from a list of locations, but simply a real warehouse. Use the menu Warehouse > Configuration > Warehouses, then click Create to configure a new warehouse.

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Keeping Track of Stock Movements

Goods Receipts

In Odoo, you have the choice between three ways to receive goods from suppliers.

The first method is to manually enter the information in the incoming shipment. To receive the products through this method, you have to go to Incoming Shipments section (Warehouse > Operations > All Operations > YourCompany: Receipts), click Create and then you enter the information about the receipt.

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Scheduling Procurements

Odoo distinguishes between Production, Purchase and Procurement.

Production is manufacturing, Purchase is the acquisition of goods from another party, and Procurement is either one or both of those.

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Managing Lots and Traceability

The double-entry management in Odoo enables you to run very advanced traceability. All operations are formalized in terms of stock moves, so it is very easy to search for the cause of any gaps in stock moves.

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Financial Inventory Management

Manual and Real-time Stock Valuation

If you have experience of managing with traditional software, you will know the problem of getting useful indicators. If you ask your accountant for a stock valuation or the value added by production, he will give you a figure.

If you ask for the same figure from your stores manager, you will get an entirely different amount. You have no idea who is right!

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Organize your Deliveries

You can manage stock through journals in the same way as you can manage your accounts through journals. This approach has the great advantage that you can define journals in various ways to meet your company's needs.

For example, a large company may want to organize deliveries by department or warehouse. You can then create a journal and a manager for each department. The different users can work in a journal as a function of their position in the company. That enables you to better structure your information.

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Estimating Delivery Dates

Standard Delivery Time

In order to define the delivery time, you have to know three things:

• Customer Lead Time: That is the time you promise to your customer for a delivery. It corresponds to the average delay between the confirmation of the customer order and the delivery of the finished goods. It can be defined in the product form, in the Sales tab. This time will be influenced by the Manufacturing Lead Time and the Delivery Lead Time.
• Manufacturing Lead Time: This is the time you need to produce one unit of a product. If this product needs other sub-products, the different manufacturing times will be summed. It can also be defined in the product form, in the Procurements tab.
• Delivery Lead Time: This is the time your supplier needs to deliver the goods. This delay can be defined in the product form in the Procurements tab in last line.

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Import / Export

Managing import / export with foreign companies can sometimes be very complex. Between a departure port and the destination company, products can get stopped for several weeks at sea or somewhere in the numerous transportation stages and customs. To manage such deliveries efficiently it is important to:

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Stock Location Example

In this section, we will develop a more detailed example that includes different concepts seen in the previous sections. The following example will use the Stock Location types, the Logistic Flows and the Bill Of Materials.

We have two companies: Odoo SA and OpenERP US.

We have three products: Product A, Product B and Product C. For each product, we will have to define the Stock Location to determine where to take these products.

To make one unit of Product A, we need the Product B and the Product C. So we will have to define a Bill of Material.

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