In modern manufacturing software like Odoo, understanding how your production process is executed in the system is essential. Odoo gives you three ways to handle manufacturing workflows: one‑step, two‑step, and three‑step manufacturing. Each method represents a different level of detail for how materials are moved and tracked during production. Choosing the right one can improve efficiency, traceability, and accuracy in your operations.

In this article, we’ll walk you through what each approach means, how they differ, and when to use them. These are all based on official Odoo documentation and practical demonstrations.

What “Manufacturing Steps” Mean in Odoo

Before we dive into each type, it’s important to understand that Odoo’s manufacturing process can be configured at the warehouse level. This means each warehouse can use a different manufacturing workflow (one, two, or three steps), depending on your business needs.

The number of steps you use determines how inventory moves and how much detail Odoo tracks:

• One‑step: Simple and fast, minimal tracking

• Two‑step: Adds component picking before production

• Three‑step: Adds finished goods staging after production

This flexibility lets you match the system to your real‑world operations.

In one‑step manufacturing, Odoo does not create separate transfer orders for moving materials or finished products. Instead:

• You create a Manufacturing Order (MO)

• Odoo deducts components from inventory

• Odoo adds finished goods to inventory once production completes

• No physical transfer moves are tracked in the system

  
  

This method is ideal for:

• Small workshops

• Simple assembly tasks

• Companies that are not tracking detailed warehouse movements

How It Works

1. Go to Manufacturing → Operations → Manufacturing Orders

2. Create a new MO and select the product to produce

3. Odoo auto‑fills the associated Bill of Materials (BoM)

4. Confirm the MO to start production

   
   

Once completed, the system updates inventory counts without showing intermediate transfers.

Pros of One‑Step:

• Fast setup

• Easy to manage

• Less administrative tracking

  
  

Cons of One‑Step:

• No physical transfers recorded

• Harder to track how inventory physically moves

Two‑step manufacturing adds one additional layer: picking components before production.

Here’s what happens:

1. Odoo creates a pick components transfer (raw materials moved to production area)

2. A manufacturing order is generated

3. Finished products are automatically added to inventory once done; no transfer for storing them

   
   

Why Use Two‑Step?

This setup is more structured than one‑step and useful when your warehouse team:

• Needs to see physical movements

• Picks materials separately from production

• Tracks who picked what, and when

  
  

Inventory is more visible, even if the finished goods aren’t manually staged back into stock.

Pros of Two‑Step:

• Component movements are tracked

• Better visibility in warehouse operations

  
  

Cons of Two‑Step:

• Slightly more complex than one‑step

• Finished product movements are still not recorded