How to Handle Manufacturing with Two Step Warehouse Configuration in Odoo 18 : Complete Guide
By Braincuber Team
Published on March 17, 2026
Manufacturing in Odoo can be optimized using a two-step warehouse configuration, which ensures better inventory control by separating component picking from the actual production process. This approach creates a clear distinction between material preparation and production execution.
What You'll Learn:
- Enable two-step manufacturing in warehouse configuration
- Understand the automatically created route for two-step manufacturing
- Select products and set up Bills of Materials (BOM)
- Create and confirm Manufacturing Orders (MO)
- Execute the two-step production process
- Analyze cost calculations for manufacturing orders
Step 1: Enabling Two-Step Manufacturing in Warehouse Configuration
Enable Multi-Step Routes
Navigate to Inventory > Configuration > Settings and enable 'Multi-Step Routes'. This allows Odoo to manage separate steps for component picking and manufacturing.
Configure Two-Step Manufacturing
Go to Inventory > Configuration > Warehouses, select your warehouse, and under Manufacture section enable "Pick components and then manufacture (2 steps)".
Understanding the Automatically Created Route
When you enable two-step manufacturing, Odoo automatically creates a route called "YourCompany: Pick components and then manufacture." This route handles moving materials to pre-production before manufacturing begins.
| Rule | Description | Location Flow |
|---|---|---|
| Rule 1: Component Picking | Pulls materials from main inventory to staging area | WH/Stock → WH/Pre-Production |
| Rule 2: Manufacturing Consumption | Moves staged components to virtual production location | WH/Pre-Production → Virtual Production |
Step 2: Select Product for Manufacturing
Navigate to Products
Go to Manufacturing > Products > Products and select a product to manufacture.
Step 3: Setting Up Bill of Materials (BOM)
Create New BoM
Go to Manufacturing > Products > Bills of Materials and click New.
Configure BoM
Select the product, set quantity, choose BoM Type as "Manufacture this product".
Add Components
Under Components tab, add all required materials for manufacturing.
Define Operations
In Operations tab, specify work centers and estimated time for each operation.
Step 4: Creating and Confirming Manufacturing Order (MO)
Create MO
Navigate to Manufacturing > Operations > Manufacturing Orders and select "New".
Specify Details
Specify product to manufacture and quantity. System pulls details from pre-defined BOM.
Confirm MO
After verifying information, click "Confirm" to initiate manufacturing process.
Step 5: Two-Step Production Process
Component Transfer (First Step)
Automatic Transfer Creation
After confirming MO, Odoo automatically creates transfer to move components from WH/Stock to WH/Pre-Production.
Validate Transfer
Click "Transfers" smart button in MO and validate the transfer to reserve components.
Manufacturing Execution (Second Step)
Begin Production
Once components are in pre-production location, begin manufacturing process via Work Orders tab.
Record Work
As team works through operations, record actual time spent and additional materials consumed.
Complete Work Orders
Click 'Done' button to finalize work order, changing status to 'Finished' and MO to 'To Close'.
Close Manufacturing Order
Navigate to Shop Floor module or click 'Shop Floor' smart button to close production. MO status updates to "Done".
Cost Calculation Breakdown Example
This example shows cost analysis for producing one "Cabinet with Doors":
| Cost Component | Calculation | Amount |
|---|---|---|
| Materials | 5 wood panels ($80) + 10 screws ($0.10) + 10 bolts ($0.50) | $406 |
| Labor | 55 seconds work at $100/hour | $1.53 |
| Total Cost | Materials + Labor | $407.53 |
| Estimated Cost | Based on BOM | $406.00 |
| Variance | Actual - Estimated | $1.53 (0.38%) |
Cost Analysis Insight
The minimal variance (0.38%) indicates highly accurate cost estimation in the BOM, demonstrating effective production planning.
✓ Better Inventory Control: Clear separation between component picking and manufacturing
✓ Improved Accuracy: Components reserved before production starts
✓ Enhanced Tracking: Separate tracking of material preparation vs production costs
✓ Efficient Workflow: Prevents production delays due to missing components
Frequently Asked Questions
What is the main benefit of two-step warehouse configuration in manufacturing?
The main benefit is better inventory control by separating component picking from production execution, ensuring all materials are available before manufacturing begins.
Do I need to manually create the transfer for component picking?
No, Odoo automatically creates the transfer when you confirm the Manufacturing Order when two-step manufacturing is enabled.
Yes, two-step manufacturing can be configured per warehouse and applies to all manufacturing orders in that warehouse.
Go to Inventory > Configuration > Warehouses, select your warehouse, and click the "Routes" smart button to see the automatically created two-step manufacturing route.
Need Help with Odoo Manufacturing Configuration?
Our experts can help you implement two-step warehouse configuration and optimize your manufacturing processes in Odoo 18.