Modules

Examples of products are refrigerators, mortgages, a CNC program to cut out a cabinet, a car, a Skoda, Octavia, a text editor, MS Word, a gear wheel 25mm in diameter with 50 teeth, etc.

The product can also be work, e.g. changing the wheels, repairing the fender, baking a cake, a German lesson for employees, etc.

What they are for in the system and how they are broken down

Products are used to determine what assets are present in a company. For example, if a company has programs for NC machines for various products, each of them is an asset. In order to better classify them according to their common characteristics, they are broken down into products.

In principle, products of 3 categories are distinguished:

Purchased_ are products that a company acquires to use or consumes to produce its own products. Typically, they are inventories, consumer goods, investment purchases as well as procured services.
Produced are products that are produced in a company. Typically sold products, semi-finished products (including those that are further consumed in downstream production), internal calculated works and provided services
Traded are products procured for resale. Typically, they are products supplied for stock for resale.
The determination of products is, of course, always fully dependent on the company – what one uses, the other produces.

Product hierarchy

Products can be many in a company, and for better organization, they can be broken down hierarchically from a more general description to a more detailed description.

Examples of a hierarchy are the above examples auto > damage > Octavia. Keeping products in a hierarchical organization brings the possibility of order and better description. Detail depends on the number of products that are registered.

An important importance of a hierarchy is in relation to the categorization of suppliers. If you have a supplier that supplies a whole group of products, it is advisable to have this group together. You can then easily for the whole group save information about the supplier

Another possibility of organizing products are categories. Each product belongs to a category and with their help further subdivision is possible. The above mentioned car product may belong to the category of the company fleet.

Note: The product hierarchy is promoted when the status changes. If you change the state of a product, the states of all its specific variants will change. Products that do not have a state in common are unlikely to form a hierarchy expressing the relationship between the generic product and its specific variant. Consider whether there should be a breakdown across product categories in that case.

Product states

Product state is important information describing whether a product can be used. Therefore, pay attention to product status. Read more about product statuses here.

Composition of the product

Within the product it is possible to register its composition, i.e. what products and in what quantity are needed for its creation. Of course, the composition of the product makes sense to break down only in the case of manufactured products. The description of the composition of the product allows to calculate the price of the final product, the case of the order, and to check whether the product can be manufactured e.g. from stock.