Identify the production lifecycle stages
Understanding the lifecycle of a production order is important to understand the manufacturing process in Supply Chain Management. The production order helps to execute the manufacturing process.
The production bill of material and the production route are the main components of the production order. They're copied to the production order based on the item selected for production. The bill of material and route can be modified before the production order gets started.
Create production order
In the production lifecycle, the first step is to create a production order. The following list includes the options for production order creation:
Created by master planning execution based on demand generated
Created directly from a sales order line or when a higher-level production order is created and estimated (pegged supply)
Created manually
When you create a production order, you need to include the item to be produced along with the quantity. You must also include the delivery date of the finished good.
From Production order > Order details > BOM, you can validate the BOM data that was copied from the default active BOM when the production order was created. You can modify the BOM line by changing the item and quantity, if necessary. It may affect the cost estimate of material consumption for the production order.
From Production order > Order details > Route, you can validate the production route data that was copied from the default active route when the production order was created. You can modify the route line by changing the process quantity, if necessary. It may affect the cost estimate of route consumption for the production order.
Estimate production order
After the creation of the production order, you need to estimate the production order. You can find the Estimate button in the action pane under Production order > Process. The Estimate button opens the Estimate dialog, where you can configure the profit-setting options. These options are set up in the cost groups. It helps to create a selling price for the production order. If you use Standard, no markup is used to calculate the selling price.
The estimate process is used to create a cost analysis of the order. In the action pane, you can select the Managed costs button, followed by the View calculation details to view the item and process-wise cost details.
Schedule production order
The next process in the production lifecycle is to schedule the production order. The two primary types of scheduling are operations and job scheduling.
Operation scheduling provides a general estimate of the production process over time. Operation scheduling doesn't explode the operations for the production routes into a job. The main complements of operations scheduling are the scheduling direction, the capacity of resources, and materials optimization. You must estimate the cost of a production order before you can run operations scheduling. If you haven't run an estimate, it runs automatically before operations scheduling is started. The setup time, process time, and run time are set for operations in the production. After you run operations scheduling, the status of the production order is Scheduled.
You can use job scheduling to schedule individual jobs or shop orders, and to control the manufacturing environment. Job scheduling breaks down each operation into its individual tasks or jobs. These jobs are then assigned to the operations resources that perform them. You can specify a start date and time or end date and time for the job, and then run scheduling. The job scheduling process includes the following tasks:
Splitting operations into jobs.
Date and time scheduling of jobs, based on availability of the resources.
The Utilization of the finite capacity of the resources by calculating the start and end time of each job.
Resource groups to be specified for operations, to determine resources based on shortest lead time.
Job scheduling can be forward or backward. Use the forward scheduling to start the production process as early as possible. The backward scheduling is based on the date when the production must be complete, considering which, you can start as late as possible.
Configuration to check the material availability when the operation starts.
Release production order
The next step after scheduling is releasing the production order, which means making it available for execution on the production shop floor or for warehouse processes. When the production order is released, the shop floor operators start executing the production job on the shop floor. Route cards, route jobs, and job cards can be issued when a production is released. These documents can record various times to complete operations and consumption of material. Warehouse workers can pick the materials that are physically reserved for the released production order. You can also release a specific part of the job by selecting certain operations. This process is useful if the third-party contractor executes a certain part of the job. You can also release a certain quantity of product for production instead of releasing all products together.
Start production order
This step starts the production process on the shop floor. This process is responsible for reporting the time and material consumption in the production process. You can record the actual time spent on each operation. You can also track actual consumption of material, including any extra usage or wastage in this step.
When you start the production order, the system creates a picking list journal. This is the picking list generated by the system based on BOM, which is created for the finished good item. The route card journal is also created based on the route card, which is created for the finished good item. After the picking list and route card are posted, you can compare the estimated cost amount with the realized cost amount.
Report production order as finished
At this stage, a finished product is reported and moved from the production floor to inventory. You can also report the error quantity in this process and associate the error reasons.
After you report a production order as finished, you can create a put-away work to move the finished goods to the warehouse. You can also generate a quality order automatically once the production order is reported as finished. The planned or standard cost value of the finished goods can be set up to be reported to ledger accounts.
You can report a production order as finished in several ways:
Select the Reported as finished button under Production order in the action pane.
Use the route and job card journal.
Post the Reported as finished journal.
End the production order
The last step of the production process is to end the production order by selecting the End button under Production order in the action pane. As a part of the end process, you can allocate the scrap material, which adds the cost of the scrap to the finished goods. After you end the production order, you can compare the estimated cost price against the realized cost price to get an overview of the production variances.