Multi-level BOM with Phantom BOM — drawing revision tracking
ERPNext v16 supports multi-level BOM up to 10+ levels, Phantom BOM for sub-assemblies not produced separately, BOM versioning with effective dates and customer-specific BOM variants for each OEM. MRP runs against all open Sales Orders and auto-creates Material Requests for every RM shortage.
✓
Multi-level BOM — 10+ levels, component assemblies, raw materials and operations in one structure
✓
Phantom BOM (v16) — virtual sub-assemblies that explode into RM during MRP without separate Work Orders
✓
BOM versioning — Rev 1, Rev 2, Rev 3 with effective dates. Work Orders always use current revision.
✓
Customer-specific BOM — different OEMs may specify different tolerances or materials for the same part number
✓
MRP engine — all open Sales Orders vs stock vs open POs. Material shortages flagged in one run. Auto Material Request creation.
ERPNext · Manufacturing › BOM · Brake Bracket Assy A2
Rev 3 · Active
BOM — Brake Bracket Assy A2 · Rev 3 · Effective: 01 Sep 2026
| Component | Qty | UOM | Operation | Type |
|---|
| MS Flat Bar 50×6mm (IS 2062 E250) | 0.42 | kg | Blanking | Raw Material |
| Brake Bracket Sub-assy [Phantom] | 1 | nos | — | Phantom BOM |
| M8 Hex Bolt Grade 8.8 | 4 | nos | Assembly | Purchased |
| Zinc Phosphate Coating | 1 | nos | Surface treatment | Job Work |
Work Orders and Job Cards — actual vs standard cost per operation
Work Orders are raised from Sales Orders or Production Plans. Each Work Order has a routing of operations — blanking, machining, welding, inspection. Job Cards capture actual time and material per operation. Actual cost is calculated in real time — no waiting for month-end cost accounting.
✓
Work Order from Sales Order — quantity, BOM revision, routing and planned dates all pulled automatically
✓
Job Cards per operation — operator records start time, end time and quantity completed. Scrap quantity recorded.
✓
Actual vs standard cost — material cost, machine cost and labour cost per Work Order. Variance report per part, per order.
✓
Material shortage check — before releasing a Work Order, ERPNext flags any RM below required quantity
✓
COGM auto-posting — Cost of Goods Manufactured posted to accounts when Work Order is completed. No manual journal.
ERPNext · Manufacturing › Work Order · WO-0841
In Progress
Job Cards — WO-0841 · Brake Bracket Assy A2 · 500 nos
| Operation | Planned (min) | Actual (min) | Qty | Variance |
|---|
| Blanking | 120 | 118 | 500 | -2 min ✓ |
| CNC Machining | 240 | 268 | 500 | +28 min ↑ |
| Deburring | 60 | — | — | Pending |
| Zinc Phosphate (JW) | — | — | 500 | Subcon |
Subcontracting and ITC-04 — challan tracked from despatch to return
Every challan raised when material leaves your factory for a job worker is tracked in ERPNext — quantity, date, job worker name and challan number. When material returns, the Subcontracting Receipt closes the challan. At quarter-end, the ITC-04 report auto-prepares Tables 4, 5 and 6 from these transactions. Filing time: 45 minutes, not 3 days.
✓
Subcontracting Order — materials to send, process to perform, expected return date
✓
Delivery Challan — material despatched to job worker with challan number, date and quantity
✓
Subcontracting Receipt — materials received back. QC inspection. Accepted qty to FG. Rejected qty returned to job worker.
✓
ITC-04 auto-prepared — Tables 4, 5 and 6 from challan transactions. Ready to file in 45 minutes.
✓
Open challan ageing report — flags any challan older than 180 days before ITC reversal risk triggers
ERPNext · Manufacturing › Subcontracting Challan Tracker · Q2 FY27
ITC-04 ready
Subcontracting Challans — Jul–Sep 2026 · ITC-04 Preparation
| Challan No | Job Worker | Material | Sent | Returned | Status |
|---|
| SC-0341 | Rajan Plating Works | Brake bracket (500 nos) | 5 Jul | 18 Jul | Closed |
| SC-0358 | Kumar Zinc Coaters | Hub cap (800 nos) | 12 Aug | — | Open · 70 days |
| SC-0372 | Sri Selva Machining | Knuckle pin (200 nos) | 1 Sep | — | Open · 20 days |
Quality Inspection — GRN, in-process and final QC in ERPNext
ERPNext quality inspection can be configured at three stages — GRN (incoming RM), in-process (during production) and final (before dispatch). Inspection parameters are configured per item. Quarantine warehouse holds RM until QC is cleared. Failed batches are returned or destroyed with full documentation.
✓
GRN inspection — mandatory before RM enters usable stock. COA check, hardness, dimensional. Quarantine warehouse.
✓
In-process inspection — triggered at defined operations in the Work Order routing. Dimensional check per operation.
✓
Final inspection — before Delivery Note. Customer-specific inspection parameters. PPAP checklist if configured.
✓
Subcontracting receipt QC — material returned from job worker inspected before entering FG stock
✓
Rejection records — quantity rejected, reason code, disposition (return/rework/scrap). Debit note to job worker auto-raised.
Batch Tracking and IATF 16949 Traceability
Every RM lot is tracked from the purchase receipt — heat number, supplier batch, mfg date — through material issue to Work Order to the finished component batch and delivery challan. Forward traceability (which customers got which batch) and backward traceability (which RM lot went into which finished parts) both available from one report.
✓
RM heat number / lot number captured at GRN — supplier reference, mfg date, incoming batch
✓
Material issue to Work Order — batch used in production linked to Work Order number
✓
Finished goods batch — assigned at Work Order completion. Linked to RM batches used.
✓
Delivery Challan link — FG batch linked to customer, delivery date and challan number
✓
Traceability report — complete chain from supplier heat number to customer delivery in 90 seconds. OEM audit-ready.
GST Compliance — e-Invoice, e-Way Bill and ITC-04
All three GST compliance requirements for auto ancillary manufacturers handled in ERPNext through the India Compliance app — e-Invoice IRN for eligible businesses, e-Way Bill from Delivery Note and ITC-04 quarterly return from subcontracting challan data.
✓
e-Invoice IRN — auto-generated at Sales Invoice submission for businesses with AATO above ₹5 crore. QR code embedded in print.
✓
e-Way Bill — generated from Delivery Note above ₹50,000 via India Compliance app. EWB number stored against document.
✓
ITC-04 — quarterly return for job work auto-prepared from subcontracting challan data. Tables 4, 5 and 6 complete.
✓
GSTR-1 — B2B invoices with OEM GSTIN, HSN codes, e-Invoice reference. JSON export for portal upload.
✓
HSN codes per item — Chapter 84, 85, 87 commonly used in auto components. All configured per item in ERPNext.
