Subassembly is an item produced in your or contractor's factory designed to be used in making a larger assembly or a final product.
In Katana, subassemblies are products, not materials. Each product can be a subassembly and also sold to customers simultaneously. There is no difference between products and subassemblies in Katana. Both are included in the "Products" list and have exactly the same characteristics (including a Product recipe and Production operations).
Including subassemblies in Product Recipes
In a "Product recipe" tab for any product, you can select other products as ingredients. Include a product in the recipe of another product to create multilevel Product Recipes (multilevel bill-of-materials). You can also include this other product in a recipe for the next product, and so on. There is no limit to the hierarchy levels.
Note: Katana does not block creating a recipe loop (i.e. including a product in the Product Recipe of its own subassembly). However, be aware of creating a loop as then the manufacturing cost cannot be calculated.
How to make products that include subassemblies?
When you create a Manufacturing Order (MO) or an Outsourced Purchase Order (OPO) for a product that includes a subassembly in the recipe, the subassembly is shown in the ingredients list similarly to any other materials. Katana will also show the Material Availability status for the subassembly.
If the Material Availability status for a subassembly is "Not available", you need to create a new Manufacturing Order or an Outsourced Purchase Order for producing the subassembly. You can use the quick-add button at the end of the ingredient line item to quickly create the required MO for the subassembly.
When you create a Manufacturing Order (MO) for a product that includes at least one subassembly in the product recipe, then you get the option to create Manufacturing Orders for subassemblies Automatically.
When you create a Manufacturing Order for the subassembly, the MO appears in the "Schedule" in the "Make" screen similar to any other MOs. You can manage the priority, Production status, and Ingredients Availability for those orders.
Effect on Sales Items/Ingredients Availability
As subassemblies are products in Katana and could also be sold to customers, then the same item could be required by a Sales Order and a Manufacturing Order or an Outsourced Purchase Order at the same time (e.g. you have a customer order for a product that is also used as a subassembly and required by existing MOs). Sales Orders, Manufacturing Orders and Outsourced Purchase Orders all take part in the Sales Items Availability calculation for this product.
Click on the Sales Items Availability status (on Sales Orders) or Ingredients Availability status (on Manufacturing Orders or on Outsourced Purchase Orders) to see the list of all orders that require a product. You can access the information by clicking on the "Committed" value for the item in the "Inventory" list in the "Stock" screen.
If you create a Manufacturing order or an Outsourced purchase order for a product that includes subassemblies in the recipe, the "Committed" quantity for the subassembly will increase by the required amount. When the MO or OPO is completed, both "Committed" and "In stock" quantities for the subassembly product will decrease.
In a Product Recipe, the unit cost of the subassembly is the Average Cost of this subassembly in stock. If "In stock" quantity is zero and, thus, there is no Average Cost, then the manufacturing cost is used for the subassembly. Manufacturing cost is the sum of materials cost and production cost and is calculated based on the Product Recipe and Production Operations of the subassembly.