1. About
This article describes how to manage recipes and assemblies using InventoryIQ.
If you manufacture or assemble products using multiple components or raw materials, or you bundle multiple products together to sell as a separate product or SKU, recipes and assemblies are really helpful features to help you better manage the costs and assembly process of your products.
To understand more of an overview of how recipes and assemblies fit into the big picture of InventoryIQ, check out InventoryIQ: Everything you need to know.
2. What are recipes & assemblies?
Recipes
A recipe is essentially a bill of materials for manufacturing a finished product. It is a set of components or materials that, when combined, result in a specific product or SKU.
Recipes help us properly track and calculate your cost of goods sold for each product you sell.
Example: You sell SKU A which is a bundle of Shampoo + Conditioner. An example of a recipe for SKU A may be:
1 bottle of SKU B (shampoo), and
1 bottle of SKU C (conditioner).
Note that the same SKU can be its own product and can also be a component of another product’s recipe. In the example above, the shampoo is its own product (SKU B) but can also be a component of the SKU A bundle.
A recipe can also include both active products (i.e., products that are being sold, like the shampoo) and inactive products, such as raw materials or the bottle to hold the shampoo.
Assemblies
An assembly is the process involved in following a recipe or adding specific components together in order to create the finished product. This can be done both as a manual assembly or on-demand assembly.
Manual assembly: When you enter the assembly data every time a batch is produced or manufactured.
For example, on June 15, you enter a batch of 500 units of SKU A created when you bundled 500 bottles of shampoo and 500 bottles of conditioner into 500 SKU A units.
On-demand assembly: If this is selected, we’ll automatically create an assembly based on a recipe you created if you fulfill a SKU that has 0 on-hand units.
For example, on June 1 you fulfilled an order of 10 units of the SKU A bundle but your on-hand units of SKU A are showing as 0. So we automatically reduce 10 units of the SKU B shampoo and 10 units of the SKU C conditioner to show this order as fulfilled.
This helps ensure your product (in this case, SKU A) doesn’t go into negative on-hand units (although this may result in components of the products becoming negative, in this case, SKUs B and C).
3. Adding a recipe
Click on Inventory>Products then click into the SKU page for the relevant product.
Click the Recipes tab and then Add recipe.
Click Add components to start building your recipe.
Select the products to add as components from your list of products. If you have a component that isn’t listed, click the + sign at the top of the list.
Note: The link icon on the corner of the image means this product is merged with other products.
After selecting the components, click Add.
Enter the quantity of each component needed to assemble one unit of the product. By default, the quantities are in whole units. To add fractional quantities, see section below on Adding Fractional quantities and measurements.
You can also add the estimated quantity of waste of each product that occurs in each assembly (optional). This will show as a separate line item in your P&L.
You can also add the source warehouse, or the warehouse from which the component will be taken when assembling the product. If no warehouse is specified, the component will be taken from the assembled item's warehouse.
Click Save.
On the Products screen, you can see from the green icons which products have recipes and which are components of other recipes:
Important note: If you merge multiple products, only the recipes of the primary product will remain intact. The recipes of the secondary products will disappear and will need to be added back if the products are unmerged in the future. To learn more see Merging multiple products.
Adding fractional quantities and measurements
In order to create fractional components in a recipe, you’ll need to first enable fractions in the component product itself.
On the Products page, select the specific product that will be a component in the recipe.
When the SKU screen opens, click the 3 dots on the right side of the screen and select Enable fractions.
Note: This feature is locked for any active products (i.e., products that are actually sold). We do this to ensure your COGS tracking for these products stays completely accurate.
4. Editing a recipe
After saving a recipe, you can always go back and edit it.
On the Recipes tab, find the relevant recipe and click the edit icon.
Make the necessary changes or updates and click Save.
5. Adding an assembly
As explained above, an assembly is the process involved in following the recipe in order to create the finished product. This can be done both as a manual assembly or on-demand assembly.
Manual assembly
To create a manual assembly:
Go to the Assemblies tab in the individual SKU page, and click on the Manual tab.
Click +Manual assembly on the top right corner.
Click Add components or select Load recipe to add an assembly from an existing recipe.
Similar to recipes, quantities are by default set as whole units. If you'd like to add fractional quantities, follow the instructions in the section called Adding fractional quantities and measurements.
You can also optionally add waste, or the estimated wasted quantity that occurs in each assembly, and the warehouse from which the component will be taken when assembling the product. If no warehouse is specified, the component will be taken from the assembled item's warehouse.
Add the number of Units assembled, the Assembled on date and the Warehouse.
Click on the Costs tab in the manual assembly screen to see what the cost of each batch of units assembled is composed of.
Click Save.
On-demand assembly
You can apply on-demand assembly to automatically record assemblies based on a recipe if this product is fulfilled and there are no on-hand units. This is very useful to reduce manual assembly entries if a product is assembled frequently.
You can also choose to apply on-demand assembly only for a specific period or for a specific warehouse and can delete or duplicate a recipe.
On-demand assemblies will appear as a separate inventory layer in the Purchases tab. The costs for this layer will be based on the cost of the components.
Click on the on-demand assembly row to drill down into the cost of the various batches of assemblies.
You can also drill down into the cost details by clicking on the Assemblies tab, and selecting On-demand.
If you have any specific questions, feel free to reach out to support at [email protected] for help!