Short answer: For a maker of car filters and other auto components, manufacturing cost accounting starts with the bill of materials (BoM): every part, filter paper, rubber, packaging, machine time and scrap rate is costed in one system. The raw material plan (MRP) is built automatically from orders and stock, and dealer sales and returns are measured against the same cost. In Odoo ERP this is one chain of the Manufacturing, Inventory, Sales and Accounting apps.
An oil filter looks like a simple product: housing, filter paper, rubber seal, valve, box. But for the manufacturer the price of each component changes every month, many are imported and tied to the dollar. The shop floor produces scrap, machines stand idle, and dealers want prices fixed in advance. In many plants unit cost is calculated once a year in Excel and then lives on as an "approximately". The owner ends up not knowing which model makes money and which one actually loses it. This article shows how to link the raw material plan, product costing and dealer sales in one system for component manufacturing, and what automation delivers in numbers.
Why does manufacturing cost accounting matter for an auto component maker?
Manufacturing cost accounting is a system that precisely tracks raw materials, semi-finished goods, labour, machine time and overheads per unit of product.
In Uzbekistan a window is opening for auto component suppliers. According to Kun.uz, Uzavtosanoat aims to cut annual imports by $500 million through localization: 16 working groups assessed 1,299 enterprises and found 79 of them ready to produce about $162 million a year of import-substituting components (Kun.uz, 2024). Another report set a 2025 target of 450,000 cars produced and $700 million in exports (Kun.uz, 2024).
To supply a large car plant, a component maker has to justify its price, show quality by lot and guarantee delivery dates. All of that rests on accurate cost and planning data.
How is a raw material plan (MRP) built?
MRP (Material Requirements Planning) is a method that automatically calculates which materials to buy, how much and when, based on orders, forecasts and stock on hand.
In car filter production MRP answers questions like these:
- How much filter paper, sheet metal and rubber do next month's expected dealer orders need?
- If imported materials take 45–60 days to arrive, when must the order be placed?
- Which semi-finished items (for example, painted housings) are in stock, and which must be made in the shop?
- Which machine has free capacity on which day?
Manual planning tends to fail in one of two ways: materials run out and the line stops, or extra is bought "just in case" and cash freezes in the warehouse. McKinsey reports that early adopters of AI-enabled digital supply chain management cut inventory by 35% and logistics costs by 15%, and raised service levels by 65% (McKinsey, 2021).
How do the BoM and scrap affect unit cost?
A bill of materials (BoM) is the list of all components, their quantities and the operations needed to produce one unit of a product.
For example, take a simplified BoM for one oil filter (prices are illustrative, only to show the method):
- Metal housing and cover: 9,000 so'm.
- Filter paper: 4,500 so'm.
- Rubber seal and valve: 3,000 so'm.
- Box and label: 1,500 so'm.
- Labour and machine time: 4,000 so'm.
Total: 22,000 so'm. Now assume 3% of housings are scrapped at the stamping stage. The cost of that scrap is spread over the good units, and unit cost shifts noticeably. If imported paper rises 10% because of the exchange rate, cost shifts again. An ERP records actual consumption, scrap and prices on every manufacturing order, so the owner can compare planned and actual cost.
We cover general manufacturing processes in Odoo ERP for manufacturing companies.
How should dealer sales and returns be controlled?
Auto component makers usually sell through dealers and wholesale shops rather than directly. That brings three problems:
- Separate prices and discounts per dealer: if the system does not show who buys at what price, sales managers discount at will.
- Credit and receivables: without a credit limit, a dealer's debt grows unchecked.
- Returns: if the reason for a return (manufacturing defect, transport damage, dealer error) and the lot are not recorded, the root cause of a quality problem cannot be found.
In Odoo each dealer tier gets its own pricelist and credit limit, and the return document is linked to the lot number. One report then shows which lot generates the most returns and which dealer owes the most. Read more about the sales and purchasing apps in Odoo Sales and Purchase.
What changes after automation: in numbers
- Production efficiency: in the Deloitte and MAPI study, companies with smart factory initiatives reported average gains of 10–12% in production output, capacity utilization and labour productivity (Deloitte and MAPI, 2019).
- Inventory levels: early adopters of digital supply chain management cut inventory by 35% (McKinsey, 2021).
- Logistics costs: the same companies cut them by 15% (McKinsey, 2021).
- ERP return: Nucleus Research found that every dollar spent on ERP returned $7.23 on average (Nucleus Research, 2014).
- Market opportunity: Uzavtosanoat's review found 79 enterprises ready to make about $162 million a year of import-substituting components; winning those orders takes a defensible cost base and a stable plan (Kun.uz, 2024).
How is component manufacturing set up in Odoo?
- Manufacturing: multi-level BoMs, work centres with hourly costs, manufacturing orders.
- Inventory: warehouses for raw materials, semi-finished and finished goods, lot tracking.
- Purchase and MRP: minimum stock rules and automatic make-to-order purchase suggestions.
- Quality: lot-level quality checks and scrap records (in the Enterprise edition).
- Accounting: actual cost, receivables by dealer and margin by product.
For more detail, see Odoo Manufacturing and, for owner-level reports, what is management accounting.
How does Deep Vision approach this?
Deep Vision is an official Odoo Gold Partner in Tashkent. According to its Odoo partner page, the team has 7 Odoo-certified experts, most of its 24 client references are in wholesale, retail and manufacturing, the largest client has 100+ users, and customer retention is 89%. Our portfolio includes manufacturing projects such as RockBeton, which you can see on the portfolio page.
In the projects of Deep Vision founder Amon Olimov's team, manufacturers often show the same pattern: the BoM lives in the process engineer's notebook and actual consumption is not recorded anywhere. So we usually work in this order:
- Digitise the product and component catalogue and the BoMs.
- Split stock into raw materials, semi-finished and finished goods.
- Record actual consumption and scrap through manufacturing orders.
- Set up dealer pricelists, credit limits and the returns process.
- Build a margin-by-model report for the owner.
A full project usually takes 2–6 months. To discuss your case, fill in a brief or see our Odoo implementation service.
Frequently asked questions
Does Odoo calculate product cost by itself?
Yes. From component prices in the BoM and work centre hourly costs, Odoo computes the product cost, and actual manufacturing orders show the actual cost.
How is scrap recorded?
Scrap is recorded on the manufacturing order or with a scrap document from the warehouse. Its value goes to expenses, and you can report it by reason.
Does cost update when the exchange rate moves?
Imported purchases are valued at the rate on the receipt date, so when a new lot of material arrives, the cost reflects the new price.
Can dealers place orders themselves?
Yes. Through the Odoo portal or a B2B webshop, a dealer sees their prices, available stock and balance, and places the order.
Does a small workshop need an ERP?
If the product range is wide and materials depend on imports, manual costing goes wrong even in a small workshop. You can start step by step, with inventory and manufacturing first.
Sources
- Kun.uz: Uzavtosanoat targets one million jobs and localization by 2030
- Kun.uz: Uzbekistan targets production of 450,000 cars and $700 million in exports
- Deloitte and MAPI, Smart Factory Study, 2019
- McKinsey, Succeeding in the AI supply-chain revolution, 2021
- Nucleus Research: ERP returns $7.23 for every dollar spent
Want to know the true cost of every product you make? Leave a brief or call +998 77 093 00 07.