Odoo, with its powerful suite of integrated Apps, provides a complete solution for managing cloth manufacturing processes. Whether you’re handling in-house operations or outsourcing part of your production to subcontractors, Odoo helps streamline procurement, production, inventory, compliance, and sales — all in one place.
This article walks you through a step-by-step manufacturing workflow for cloth production, including in-house processing and subcontracting using the “Resupply Subcontractor” route, ensuring smooth transitions and traceability across the process.
Why Odoo ERP for the Manufacturing Industry?
Odoo’s modular design offers manufacturers the tools they need to digitize and optimize every aspect of their business.
Here are the key Benefits of Odoo ERP in Manufacturing:
- End-to-End Process Integration - Connect manufacturing, inventory, purchase, sales, accounting, HR, and CRM in one system.
- Automated Workflows - Reduce manual effort through automated work orders, procurement, scheduling, and invoicing.
- Real-Time Production Tracking - Get real-time visibility of work orders, raw materials, machine capacity, and labor.
- Cost Control & Reporting - Monitor actual vs standard costs, overheads, and inventory valuations.
- Scalability - Odoo grows with your company—from 10 to 10,000+ users across multiple factories or regions.
Step-by-Step Implementation of Odoo ERP in a Manufacturing Company
1. Install below required Odoo Apps:
- Purchase
- Inventory
- Manufacturing
- Sales
- Accounting (recommended for compliance & invoicing)
2. Enable Key Settings
- Manufacturing → Settings:
o Enable Subcontracting
o Enable Work Orders (to manage in-house steps)
- Inventory → Settings:
o Enable Multi-Step Routes
o Enable Storage Locations
3. Create Products
Create records for all Raw Materials, Semi-Finished Goods, and Finished Products.
- Raw materials = Storable
- Semi-finished and finished goods = Storable and Manufacturable
4. Create a Bill of Materials (BoM)
- Go to Manufacturing → Products → Bill of Materials
- Create a BoM for the final product with:
o All raw materials
o Type: Manufacture this product
o Operations listed (if using work orders for in-house processes)
5. In-House Manufacturing (if applicable)
- For in-house steps (e.g., fabric cutting, stitching):
o Go to Manufacturing → Create
o Assign product and BoM
o Complete Work Orders
o Mark the Manufacturing Order (MO) as Done to move to the next stage
6. Define Subcontracting BoM
- Create a Subcontracting BoM for the last stage (e.g., ironing, packing)
o Type: Subcontracting
o Add only components to be sent to the subcontractor
o Assign the Subcontractor (Vendor)
🧵 Example: After internal stitching is done, the semi-finished shirt is sent to the subcontractor for ironing and packing.
7. Enable “Resupply Subcontractor” Route
- Go to Inventory → Configuration → Routes
- Enable or configure Resupply Subcontractor on Order
- Apply this route to all applicable components
8. Set Up Subcontractor as a Vendor
- Go to Contacts → Create
- Mark as Vendor
- Assign to the subcontracting BoM
9. Create Purchase Order for Subcontracting
- Go to Purchase → Request for Quotation
- Select the Subcontractor, add the final product
- On confirmation, Odoo generates:
o A Delivery Order (to send materials)
o A Receipt (to receive finished product)
10. Send Components to Subcontractor
- Go to Inventory → Transfers
- Validate the Delivery Order to send raw/semi-finished goods
11. Receive Finished Goods from Subcontractor
Once the subcontractor completes the work:
- Go to Inventory → Transfers
- Validate the Receipt
- Odoo automatically consumes supplied materials and adds the finished product to inventory
12. Taxation, Accounting & Compliance
- Go to Accounting → Settings:
o Set Fiscal Localization (e.g., India, US, Europe)
- Configure Purchase/Sales Taxes in Accounting → Configuration → Taxes
- Register Vendor Bills for subcontracting costs
- Automatic posting of journal entries for:
o Inventory valuation
o Cost of Goods Sold
o Subcontractor expenses
- Attach invoices, agreements using the Documents App
- Monitor through Tax Reports, General Ledger, and Inventory Reports
13. Sales of Finished Product
- Go to Sales → Create Quotation
- Add the finished product and confirm
- Odoo auto-generates a Delivery Order
- Revenue and tax entries posted upon invoicing
Summary Table –
Odoo App Requirement at Integration
|
Step |
Odoo Apps Needed |
|
Purchase Raw Materials |
Purchase, Inventory, Accounting |
|
In-House Manufacturing |
Manufacturing, Inventory, (Quality) |
|
Resupply to Subcontractor |
Purchase, Inventory, Manufacturing, Accounting |
|
Receive from Subcontractor |
Purchase, Inventory, Accounting, Manufacturing |
|
Quality Control (Optional) |
Quality, Inventory, Manufacturing |
|
Billing and Accounting |
Purchase, Accounting |
Conclusion
Odoo enables manufacturers to manage both in-house and subcontracted operations with precision and efficiency. The "Resupply Subcontractor" route automates the delivery of components, improves traceability, and reduces manual follow-ups. When paired with strong accounting and compliance modules, it becomes a robust end-to-end ERP system for modern manufacturers.
This structured flow ensures that every shirt you produce — or any product — goes through a transparent, efficient, and auditable journey from raw material to happy customer.
Checkout this video to know more about Manufacturing process in Odoo:
📌 Interested in implementing Odoo ERP for your business? We can help you plan the right modules, workflows, and rollout strategy.