What is best practice regarding packaging material?

I have a simple case that can have a number of solutions.

Its a trading firm, that buy in bulk and then repack it in smaller units and packaging type depending upon customer requirement.

UOM is not an issue as in the end all purchased product as well as sold packages are quantified in litres and ml only.

A) If we do not want to track stock of packaging material, we can simply create packaging material as , not to maintain stock item and add packaging material cost to cost of goods sold directly via a purchase order/purchase invoice and payment, thats all.

B) In second case, if we do want to track stock of packaging material also, we can do a repack stock entry, say before dispatching product that will update stock of all packaging material too.

Now our confusion is in second scenario, what we understand is , for repack stock entry we have to create multiple product packages as separate products.

So if a product A (bought in Litres in bulk), is repacked in 15 ml, 30 ml, 100 ml, 500 ml,1 litre,20 litre packaging and there are three different kind of packaging materials options like glass bottles, aluminium bottles and plastic bottles then there are more than 6 X 3 = 18 new product variations

Also if there are some custom demand like for 400 ml product then we have to create a new product depending upon the packaging material required.

We have three queries

A) Out of above to scenarios, what is better to go for no stock updation or go for repack entries, what are standard practices for a trading firm ?

B) Is it write that we have to create 6 X 3 = 18 new products or there is some other number.And if we do have to create so many variations of different products , how to or what to name them so that it does not becomes over complicated while creating sales orders.

C) Is there a better way than either of the two options to account for packaging material.

I suppose these are very basic questions,still wanted to know some expert suggestions before opting for an option for standardized stock maintenance and operation flow.

1 Like

Still Waiting For Community help !!

Hi I think you should use Item Variants, please check
https://erpnext.org/docs/user/manual/en/stock/item/item-variants.
as I think you will have template Item A with two attributes type of bottles and size, then you make variants and receive 18 Items with their own names, also these variants will be used in sales orders.

Hi ,

You will need to obtain following business decisions before concluding on methodology / approach to implement above use case.

1 Do you maintain stock of finished product (repackaged) or you repackage product bought out only when you receive a confirmed sales Order ?

If you need to maintain stock of finished product then you must create them as a separate item under item group for e.g. Finished Product

2 Is your product perishable ? If yes , in such case you need to write off / reduce inventory value of items both in raw material as well as finished product (repackaged)

3 What is the cost of packaging material as a % of raw material as well as total % of COGS also Does your customer demand / expect a certain quality of packaging product? in such cases , you would prefer to create a separate stock items for each type of packaging product ,

4