Manufacturing Two-Step Warehouse Odoo 18
By Braincuber Team
Published on January 2, 2026
Production managers face 30+ component shortages weekly: manufacturing starts but materials missing from work center, production halts mid-assembly discovering screws not transferred from warehouse, finished goods recorded but raw material inventory never decreased, quality inspector finds wrong component used because staging area disorganized—all because single-step manufacturing allows production before verifying complete material availability instead of separating component picking from actual production execution.
Odoo 18 two-step manufacturing warehouse configuration eliminates production delays through structured material flow where components transfer from main stock to pre-production staging area before manufacturing begins, system validates complete material availability preventing mid-production shortages, dedicated picking operations separate from production execution allowing specialized teams, automated inventory transfers maintain accurate stock levels across all warehouse locations, and complete traceability tracks every component movement from storage through staging to final product—reducing production downtime 75% while ensuring zero surprise material shortages and perfect inventory accuracy.
Core Benefit: Two-step manufacturing = Pick components first → Validate completeness → Then manufacture. Materials staged and verified before production starts = zero mid-assembly surprises, accurate inventory, smooth production flow.
Understanding Two-Step Manufacturing
Step 1: Component Picking
Materials move from main stock location (WH/Stock) to pre-production staging area (WH/Pre-Production). Picking team gathers all required components, validates quantities, and prepares materials for production without starting manufacturing.
Step 2: Manufacturing Execution
Production begins only after all components confirmed available in pre-production location. Manufacturing team focuses purely on assembly/production without worrying about material availability or warehouse coordination.
Material Verification
System validates complete component availability before allowing production start. Prevents mid-production halts discovering missing materials. All shortages identified during picking phase rather than assembly phase.
Inventory Accuracy
Automated transfers track components through each location (Stock → Pre-Production → Production → Finished Goods). Real-time inventory visibility showing exact quantities at each manufacturing stage for precise planning.
Configuring Two-Step Manufacturing
Enable multi-step warehouse operations and configure manufacturing settings. This one-time setup applies to all future manufacturing orders automatically.
Enable Multi-Step Routes
Navigate to Inventory → Configuration → Settings:
- Scroll to Warehouse section
- Enable Multi-Step Routes checkbox
- This unlocks advanced warehouse operation configurations
- Allows defining custom material movement paths
- Click Save to apply settings
Configure Warehouse Manufacturing
Navigate to Inventory → Configuration → Warehouses:
- Select your warehouse (e.g., "Main Warehouse")
- Locate Manufacture section
- Change setting from default to "Pick components and then manufacture (2 steps)"
- System automatically creates necessary warehouse locations and routes
- Pre-Production location added to warehouse structure
Verify Auto-Created Route
Click Routes smart button at top of warehouse form:
- Locate route named "[YourCompany]: Pick components and then manufacture"
- Two push rules automatically created for this route
- Rule 1: WH/Stock → WH/Pre-Production (component picking)
- Rule 2: WH/Pre-Production → WH/Production (manufacturing consumption)
- These rules trigger automatically when Manufacturing Order confirmed
Warehouse Location Structure:
MAIN WAREHOUSE (WH)
│
├── WH/Stock (Main inventory storage)
│ └── Raw Materials: Wood panels, screws, bolts, paint, etc.
│ └── Purpose: Long-term component storage
│ └── Access: Warehouse staff with forklifts/pallet jacks
│
├── WH/Pre-Production (Staging area)
│ └── Components picked and ready for manufacturing
│ └── Purpose: Short-term holding before production consumption
│ └── Access: Production team access for material retrieval
│
├── WH/Production (Virtual location)
│ └── Components consumed during manufacturing
│ └── Purpose: Track material consumption in real-time
│ └── Access: Virtual (components leave here during assembly)
│
└── WH/Stock (Finished Goods)
└── Completed products ready for shipping
└── Purpose: Finished inventory awaiting customer orders
└── Access: Shipping department for order fulfillment
MATERIAL FLOW PATH:
Raw Materials (WH/Stock)
→ [PICK COMPONENTS] →
Staging Area (WH/Pre-Production)
→ [MANUFACTURE] →
Production (WH/Production - consumed)
→ [COMPLETE] →
Finished Goods (WH/Stock)
Creating Bill of Materials (BOM)
The BOM defines which components assemble into finished product and which work centers perform manufacturing operations. Create BOM before generating manufacturing orders.
Create New BOM
Navigate to Manufacturing → Products → Bills of Materials → New:
- Product: Select finished good to manufacture (e.g., "Industrial Cabinet with Doors")
- Quantity: Production batch size (e.g., 1.00 unit)
- BoM Type: Select "Manufacture this product"
- Reference: Optional internal code (e.g., "BOM-CAB-001")
Add Components
Under Components tab, define required materials:
- Click Add a line for each component
- Select component product (e.g., "Plywood Panel 4x8")
- Enter required quantity (e.g., 5.00 units)
- Repeat for all raw materials (screws, bolts, hinges, paint, etc.)
- System calculates total material cost automatically
Define Operations
Under Operations tab, specify manufacturing steps:
- Work Center: Select production resource (e.g., "Assembly Station 1")
- Operation Name: Describe step (e.g., "Cabinet Frame Assembly")
- Default Duration: Estimated time (e.g., 45 minutes)
- Add additional operations for painting, finishing, quality inspection
- Operations execute in listed sequence during production
BOM Configuration Example:
PRODUCT: Industrial Cabinet with Doors (CAB-100) BOM Type: Manufacture this product Quantity: 1.00 Unit COMPONENTS TAB: Component 1: Plywood Panel 4x8 Quantity: 5.00 units Unit Cost: $80.00 Total: $400.00 Component 2: Heavy-Duty Screws #8 Quantity: 10.00 units Unit Cost: $0.10 Total: $1.00 Component 3: Cabinet Bolts 1/4" Quantity: 10.00 units Unit Cost: $0.50 Total: $5.00 Component 4: Industrial Door Hinges Quantity: 4.00 units Unit Cost: $15.00 Total: $60.00 Component 5: Cabinet Handles Quantity: 2.00 units Unit Cost: $8.00 Total: $16.00 TOTAL MATERIAL COST: $482.00 OPERATIONS TAB: Operation 1: Frame Assembly Work Center: Assembly Station 1 Duration: 45 minutes Cost: $75.00 (labor at $100/hour) Operation 2: Door Installation Work Center: Assembly Station 1 Duration: 30 minutes Cost: $50.00 (labor at $100/hour) Operation 3: Quality Inspection Work Center: QA Inspection Area Duration: 15 minutes Cost: $25.00 (labor at $100/hour) TOTAL LABOR COST: $150.00 ESTIMATED TOTAL: $632.00 per unit
Creating Manufacturing Order
Manufacturing Order (MO) initiates production based on BOM specifications. System automatically generates component picking and manufacturing tasks.
Generate Manufacturing Order
Navigate to Manufacturing → Operations → Manufacturing Orders → New:
- Product: Select product with configured BOM (e.g., "Industrial Cabinet with Doors")
- Quantity: Production quantity (e.g., 10.00 units for batch run)
- BOM: Automatically populated with product's BOM
- Scheduled Date: When production should start
- System calculates required components based on quantity × BOM requirements
Review MO Details
Before confirming, verify Manufacturing Order information:
- Components: Check required material quantities calculated correctly
- Operations: Review work center assignments and time estimates
- Work Orders: Will generate automatically based on BOM operations
- Availability: System checks if sufficient stock exists in WH/Stock
Confirm Manufacturing Order
Click Confirm button to initiate production:
- MO status changes from "Draft" to "Confirmed"
- Automatic Actions Triggered:
-
- Transfer operation created: WH/Stock → WH/Pre-Production
- Work orders generated for each BOM operation
- Component reservations made in inventory
- Smart buttons appear: Transfers, Work Orders, Components
Manufacturing Order Overview:
MANUFACTURING ORDER: MO/00045
Product: Industrial Cabinet with Doors
Quantity to Produce: 10.00 units
Scheduled Start: January 15, 2026
WHEN "CONFIRM" BUTTON CLICKED:
STEP 1: System Calculations
✓ Material Requirements: 50 plywood panels (10 units × 5 panels/unit)
✓ Material Requirements: 100 screws (10 units × 10 screws/unit)
✓ Material Requirements: 100 bolts (10 units × 10 bolts/unit)
✓ Labor Requirements: 450 min assembly (10 units × 45 min/unit)
✓ Estimated Cost: $6,320.00 (10 units × $632.00/unit)
STEP 2: Transfer Creation (Two-Step Route Triggered)
Operation: WH/PICK/00123
Source: WH/Stock (main inventory)
Destination: WH/Pre-Production (staging area)
Products to Move:
→ 50 Plywood Panels
→ 100 Heavy-Duty Screws
→ 100 Cabinet Bolts
→ 40 Door Hinges
→ 20 Cabinet Handles
Status: Ready (awaiting warehouse team validation)
STEP 3: Work Order Generation
WO #1: Frame Assembly (Assembly Station 1) - 450 minutes
WO #2: Door Installation (Assembly Station 1) - 300 minutes
WO #3: Quality Inspection (QA Area) - 150 minutes
Total Estimated Labor: 15 hours
SMART BUTTONS CREATED:
[1 Transfer] - Click to process component picking
[3 Work Orders] - Click to track production operations
[Material Availability] - Shows component stock status
Executing First Step: Component Picking
Before production can begin, warehouse team must transfer all required components from main stock to pre-production staging area. This ensures complete material availability.
Access Transfer Operation
From Manufacturing Order, click Transfers smart button:
- Opens automatically generated transfer operation (e.g., "WH/PICK/00123")
- Source Location: WH/Stock (main warehouse inventory)
- Destination Location: WH/Pre-Production (staging area)
- All required components listed with quantities
- Barcode scanning integration available for pickingaccuracy
Validate Component Picking
Warehouse team gathers materials and confirms transfer:
- Review each line item and verify quantities available
- If shortage discovered, adjust quantities or wait for restock
- Click Validate button to confirm transfer completion
- Inventory Updates:
-
- WH/Stock: Component quantities decreased
- WH/Pre-Production: Component quantities increased
- Stock moves recorded for traceability
Verify Transfer Completion
After validation, confirm transfer processed correctly:
- Transfer status changes from "Ready" to "Done"
- Return to Manufacturing Order view
- MO status remains "Confirmed" (ready for production execution)
- Components now available in WH/Pre-Production for manufacturing team
Component Picking Process:
TRANSFER OPERATION: WH/PICK/00123
Related MO: MO/00045 (Industrial Cabinets × 10)
Warehouse Team: Assigned to John (Forklift Operator)
PICKING LIST (WH/Stock → WH/Pre-Production):
☐ Plywood Panel 4x8
Location: Aisle A, Rack 12, Level 3
Required: 50 units
On Hand: 75 units ✓
Pick: 50 units → Load onto pallet
☐ Heavy-Duty Screws #8 (Box of 100)
Location: Small Parts, Bin 47
Required: 1 box (100 screws)
On Hand: 8 boxes ✓
Pick: 1 box → Place in picking cart
☐ Cabinet Bolts 1/4" (Box of 50)
Location: Small Parts, Bin 52
Required: 2 boxes (100 bolts)
On Hand: 5 boxes ✓
Pick: 2 boxes → Place in picking cart
☐ Industrial Door Hinges
Location: Aisle C, Rack 8, Level 1
Required: 40 units
On Hand: 60 units ✓
Pick: 40 units → Load onto pallet
☐ Cabinet Handles
Location: Aisle C, Rack 9, Level 2
Required: 20 units
On Hand: 45 units ✓
Pick: 20 units → Place in picking cart
VALIDATION CHECKLIST:
✓ All components physically picked
✓ Quantities verified against pick list
✓ Materials moved to Pre-Production staging area (Zone B)
✓ Picking cart/pallet labeled with MO reference
✓ Click "Validate" button in Odoo
RESULT:
Transfer Status: Done
Inventory Updated:
- WH/Stock: Quantities reduced by picked amounts
- WH/Pre-Production: Quantities increased by picked amounts
Manufacturing Order: Ready for production execution
Executing Second Step: Manufacturing Production
With all components now in pre-production staging area, manufacturing team executes production operations using Shop Floor interface or Work Orders.
Access Work Orders
From Manufacturing Order, click Work Orders smart button:
- View all operations defined in BOM Operations tab
- Each work order shows: Work Center, Duration, Status
- Operations listed in execution sequence
- Click individual work order to open detailed work instruction
Execute Production Operations
Production team completes manufacturing tasks:
- Open work order for current operation (e.g., "Frame Assembly")
- Click Start button to begin timer
- Perform manufacturing task following work instructions
- Record actual time spent if different from estimate
- Add quality check notes if applicable
- Click Done button to complete operation
- Status changes to "Finished" and next operation becomes active
Complete Manufacturing Order
After all work orders finished, finalize production:
- Option 1: Click Shop Floor smart button → Mark production complete
- Option 2: Use Shop Floor app for touchscreen production tracking
- Click Produce button to record finished goods quantity
- System validates all work orders completed
- MO status changes from "In Progress" to "To Close" → "Done"
Production Execution Workflow:
MANUFACTURING ORDER: MO/00045 Status: Components Ready in Pre-Production Production Team: Assembly Team Alpha (Shift 1) WORK ORDER 1: Frame Assembly Work Center: Assembly Station 1 Assigned To: Sarah (Lead Assembler) Estimated: 450 minutes (for 10 units) 08:00 AM - Click "Start" button ✓ Timer begins tracking actual labor time ✓ Components consumed from WH/Pre-Production ✓ Status: In Progress 08:00-03:45 PM - Assembly Process • Retrieve plywood panels from staging area • Cut panels to specification using saw station • Assemble frame structure using screws and bolts • Quality check each frame before proceeding • 10 cabinet frames completed 03:45 PM - Click "Done" button ✓ Actual time: 455 minutes (5 min over estimate) ✓ Status: Finished ✓ Components marked as consumed in inventory WORK ORDER 2: Door Installation Work Center: Assembly Station 1 Assigned To: Michael (Assembly Specialist) Estimated: 300 minutes 03:45 PM - Click "Start" button • Install hinges on cabinet frames • Attach pre-assembled doors • Test door swing and alignment • Install cabinet handles 08:45 PM - Click "Done" button ✓ Actual time: 305 minutes ✓ Status: Finished WORK ORDER 3: Quality Inspection Work Center: QA Inspection Area Assigned To: Lisa (Quality Inspector) Estimated: 150 minutes Next Day 08:00 AM - Click "Start" button • Visual inspection for defects • Measure dimensions against specs • Test door functionality • Apply QA pass stickers 10:30 AM - Click "Done" button ✓ Actual time: 150 minutes ✓ All WOs complete ✓ MO Status: To Close FINAL STEP: Click "Produce" button Finished Goods: 10 Industrial Cabinets Location: WH/Stock (Finished Goods) MO Status: Done Total Production Time: 910 minutes (15.17 hours)
Cost Tracking and Analysis
Odoo automatically calculates manufacturing costs by tracking material consumption and labor time. Compare actual costs against estimates for continuous improvement.
Cost Components:
MANUFACTURING ORDER: MO/00045 Product: Industrial Cabinet with Doors Units Produced: 10.00 Production Date: January 15-16, 2026 === MATERIAL COSTS === Plywood Panel 4x8: 50 units × $80.00 = $4,000.00 Heavy-Duty Screws: 100 units × $0.10 = $10.00 Cabinet Bolts: 100 units × $0.50 = $50.00 Door Hinges: 40 units × $15.00 = $600.00 Cabinet Handles: 20 units × $8.00 = $160.00 -------------------------------------------------- TOTAL MATERIAL COST: $4,820.00 === LABOR COSTS === Frame Assembly: 455 minutes actual (450 est.) Rate: $100/hour Cost: $758.33 (vs $750.00 estimated) Variance: +$8.33 (+1.1%) Door Installation: 305 minutes actual (300 est.) Rate: $100/hour Cost: $508.33 (vs $500.00 estimated) Variance: +$8.33 (+1.7%) Quality Inspection: 150 minutes actual (150 est.) Rate: $100/hour Cost: $250.00 (exactly as estimated) Variance: $0.00 (0%) -------------------------------------------------- TOTAL LABOR COST: $1,516.66 === TOTAL MANUFACTURING COST === Materials: $4,820.00 Labor: $1,516.66 -------------------------------------------------- TOTAL COST: $6,336.66 Per Unit Cost: $633.67 === VARIANCE ANALYSIS === Estimated Total: $6,320.00 Actual Total: $6,336.66 Variance: +$16.66 (+0.26%) COST ACCURACY: 99.74% ✓ Excellent KEY INSIGHTS: ✓ Material costs exactly as estimated (perfect inventory tracking) ✓ Labor slightly over due to 10 extra minutes (negligible) ✓ Overall variance under 0.3% indicates excellent planning ✓ Per unit cost: $633.67 within acceptable range for pricing
Inventory Movement Traceability
Track complete component journey through manufacturing process. Every material movement recorded with timestamps and locations for full audit trail.
Stock Move Sequence:
COMPONENT: Plywood Panel 4x8 Lot/Serial: PLYWOOD-BATCH-2026-001 Quantity: 50 panels (for MO/00045) MOVEMENT 1: Component Picking (Step 1) Date/Time: January 15, 2026 08:00 AM Operation: WH/PICK/00123 Source: WH/Stock (Aisle A, Rack 12, Level 3) Destination: WH/Pre-Production (Zone B) Quantity: 50 panels Performed By: John (Warehouse) Status: Validated Stock Balance: - WH/Stock: 75 → 25 panels remaining - WH/Pre-Production: 0 → 50 panels staged MOVEMENT 2: Manufacturing Consumption (Step 2) Date/Time: January 15, 2026 08:00 AM Operation: MO/00045 - Frame Assembly Source: WH/Pre-Production Destination: WH/Production (virtual - consumed) Quantity: 50 panels Performed By: Sarah (Assembly Team) Status: Consumed during production Purpose: Cabinet frame construction MOVEMENT 3: Finished Goods Receipt Date/Time: January 16, 2026 10:30 AM Operation: MO/00045 - Production Complete Source: WH/Production Destination: WH/Stock (Finished Goods Area) Product: Industrial Cabinet with Doors Quantity: 10 units (finished products) Status: Available for sale COMPLETE CHAIN OF CUSTODY: Raw Material Purchase → WH/Stock storage → Pre-Production staging → Manufacturing consumption → Finished Goods → Ready for customer shipment TRACEABILITY BENEFITS: ✓ Know which raw material batch used in which finished product ✓ Track quality issues back to specific material lots ✓ Prove regulatory compliance with full audit trail ✓ Calculate precise inventory valuation at each stage
Benefits of Two-Step Manufacturing
Zero Mid-Production Surprises
All component shortages discovered during picking phase rather than mid-assembly. Production never starts until 100% of materials confirmed available in staging area. Eliminates costly production halts.
Perfect Inventory Accuracy
Automated transfers track components through each location (Stock → Pre-Production → Production → Finished Goods). Real-time visibility prevents discrepancies between physical stock and system records.
Specialized Team Efficiency
Warehouse staff focuses on picking accuracy without production pressure. Manufacturing team focuses on assembly without warehouse coordination. Each team optimized for their specific role.
Accurate Cost Tracking
System captures exact material consumption and labor time per production run. Compare actual vs estimated costs for continuous improvement. Precise per-unit costing supports profitable pricing decisions.
Best Practices
✅ Follow These Guidelines:
- Configure warehouse before first MO: Enable two-step manufacturing in warehouse settings before creating any production orders—prevents manual location adjustments
- Organize pre-production zone physically: Dedicate specific floor space for staged components with clear MO labeling—prevents material mix-ups between concurrent production runs
- Validate transfers promptly: Complete component picking same day as MO confirmation—prevents production delays and maintains schedule adherence
- Use barcode scanning: Scan component barcodes during picking for accuracy—reduces picking errors from 8% to under 0.5%
- Track actual vs estimated time: Record real labor hours for each work order—improves future BOM time estimates and cost predictions
- Conduct cycle counts: Regularly verify WH/Pre-Production physical quantities match system—maintains inventory accuracy across all locations
- Clean up staging area daily: Return unused components to main stock after production—prevents clutter and maintains efficient material flow
- Review cost variances: Analyze material and labor cost differences between estimated and actual—identify opportunities for process improvement
Common Mistakes to Avoid
🚨 Mistake #1: Starting Production Before Transfer Validated
Assembly team begins work while components still in main stock = materials not in staging area, production halts searching warehouse. Solution: Always validate transfer operation before starting first work order.
🚨 Mistake #2: Mixing Multiple MOs in Pre-Production
Staging area contains components from 5 different MOs without labeling = wrong materials used, rework required. Solution: Use clearly labeled bins/pallets per MO, physically separate concurrent productions.
🚨 Mistake #3: Ignoring Partial Picking Notifications
Only 40 of 50 panels available but transfer validated anyway = short components during assembly. Solution: Never validate partial transfers—adjust MO quantity or wait for restock before confirming.
🚨 Mistake #4: Not Recording Actual Work Order Times
Always using estimated times instead of actual = cost calculations inaccurate, future estimates unreliable. Solution: Start/stop timers honestly for real data, use insights to improve BOM estimates.
Conclusion
Odoo 18 two-step manufacturing warehouse configuration transforms chaotic production into organized, predictable workflow by separating component picking from manufacturing execution. Enable multi-step routes in warehouse settings, configure two-step manufacturing process, create detailed Bills of Materials defining components and operations, generate Manufacturing Orders triggering automatic transfer creation, complete first step by picking all components from main stock to pre-production staging area validating complete material availability, execute second step through work order operations tracking actual labor time and costs, and leverage complete inventory traceability from raw materials through finished goods—reducing production delays 75%, eliminating mid-assembly material shortages, maintaining perfect inventory accuracy across all warehouse locations, and providing precise cost tracking for profitability analysis and continuous improvement.
🎯 Key Takeaway: Two-step manufacturing = verify materials first, then produce. Components staged and confirmed in pre-production before assembly starts = zero surprise shortages, smooth production flow, perfect inventory accuracy. Single-step manufacturing = chaos. Two-step manufacturing = control.