'Make to order' manufacturing process

If you produce to order it can be convenient to link Sales Order to Production Order and track the status of production.

• 'Make to order' manufacturing process settings
• General hints
• Use case example

'Make to order' manufacturing process settings

1. Create product cards for both raw materials and finished goods.
2. Сreate BOM.
3. Create Sales Order.
4. Click Add Related and select Stock Replenishment to add related Production Order to the Sales Order.
5. Go to the created Production Order.
6. Check the quantity of Raw Materials. If it is not for the production, click Supply and create a Purchase Order.
7. Go to Purchase Orders, buy raw materials according to it. When you receive raw materials in your warehouse, create Receiving. Click Add Related and select Receiving.
8. Go to Production Order again, now you have enough raw materials and you can start production process. Navigate to the Process tracking tab, and click Start to produce.
9. After the production process is finished, go to Sales Order again. Create Shipment and dispatch produced goods to your customer.
10. Use Statuses in both Sales Order, Purchase Order and Production Order to mark the progress, statuses for this process can be changed only manually.
11. Change statuses in Related transactions manually. It helps your colleagues to see when they can proceed with their part of the process — analyze and order materials, start production when materials are in stock, and dispatch goods to the customer.

General hints

• Don’t forget to reserve finished goods for Sales Order and raw materials for Production order (check the Allocate order to committed stock checkbox in transactions). If it is unchecked both goods and materials are available for the other orders and they can be unintentionally sold or used in the other Production Orders.
• Prohibit the negative stock for accurate stock counting process. To do this, select Settings → Account Settings → Disallow records that reduce Stock below zero.
• If you plan to dispatch finished products to your customer by batches (without waiting for a Production Order to be completed), create one of the following:
  • several product lines with finished goods in Production Order,
  • several Production Orders related with Shipment.

Learn more: How to produce and ship in several batches against one Sales Order.

Use case example

Let’s imagine that you sew dresses. In this case, you have the following:

• Raw materials: fabric, threads, buttons, decorative jewellery, packing box.
• Finished good: a dress with golden buttons.
• Routing (sequence of production operations): cutting the fabric, sewing, buttons and decoration attaching, quality control and packing.

Then in the Kladana workspace:

1. Create product cards (both for finished dress and raw materials). Also product cards can be created during the BOM creation.
2. Create a dress sewing Routing.
   
3. Create Bill of Materials.
   
4. In the Bill of Materials, define finished product as Dress. Minimum of dresses that can be produced in the frames of one production cycle and how much materials is necessary for every stage of Routings.
5. If you don’t need to track every stage of production separately, create Routing with the only one production operation, e.g. Main operation.
6. During the production process actually used materials or their quantity may change, actually produced quantity of goods may change. All this you can later reflect in the Production Order.
7. Select Sales → Sales Orders and create a Sales Order for 10 dresses. As Available quantity is not enough produce the dresses. Change Sales Order status to To produce. You can manage statuses: change their names and configure them.
   
8. In the Sales Order select Add Related → Stock Replenishment.
9. In the opened window, select Fill up stock by → Production Order. As the BOM for a dress is already created, it is substituted automatically. Then specify the quantity to produce and click Create.
   
10. Navigate to the Production → Production Orders and select the Production Order newly created. Check the information in the order. Learn more about Production Order.
11. In the Raw Materials tab, in the Available column check whether you have enough raw materials. Purchase them, if necessary. Click Supply and create a Purchase Order. Learn more about Supply.
    
    
    Before starting the Supply process set up the status Waiting for supply in the Production Order.
    Reserve raw materials using the Allocate order to committed stock checkbox to prevent their usage in another Production Order. Take into account only the quantity of available materials in the Available column of the Supply.
12. Let’s take a look what happens in the lists and Stock report at that moment:
    • In the list of Sales Orders the Sales Order has the status To produce. If you open the Related transactions tab in the Sales Order, you see that it is linked with the Production Order (in Waiting for supply status), and Production Order is linked with Purchase Order.
      
    • In the list of Production Orders the Production Order has no Start Date and has the Waiting for supply status. You can also see the Related transactions of it.
    • In the list of Purchase Orders there is new Purchased Order.
    • In Stock report there are not raw materials and finished products On Hand, but they are Committed (reserved for Production Order and Sales Order). Thus, the Available quantity is negative.
13. Purchase raw materials from the Supplier. Check the newly created Purchase Order check and edit if necessary. Send a Request for Quotation to the Supplier using Send by email function.
    After receiving confirmation from the Supplier change the status of the Purchase Order and wait when the raw materials arrive at the warehouse.
14. When raw materials come to the Warehouse, create a Receiving. After saving the Receiving the raw materials are in stock and you can start the production process.
    If you use Statuses for Production Orders it is highly recommended to change the status in the Production Order related to the Receiving from Waiting for supply to Ready for production.
    If you are waiting for raw materials from several Suppliers you should take it into account.
15. To proceed with the production process, go to the Production Order, navigate to the Process Tracking tab, and click Start to produce. As the stage of production is completed you mark is as completed in Kladana and finish production of the dresses. Learn more about Process tracking.
    
    
    
    After each stage in the production process you can change the actual quantity of finished goods, replace raw materials or change their quantity.
16. If you use Statuses for Production Orders and Sales Orders it is highly recommended to change the statuses:
    • When production is started, in Production Order the status should be changed from Ready for production to In production, and in related Sales Order from To produce to In production.
    • When production is completed, in Production Order the status should be changed from In production to Finished, and in related Sales Order from In production to Ready to ship. That helps you to monitor Sales Orders state and properly inform customers.
      
      If you use the Scheduled Production Date field, it can be clarified or changed at the moment of starting the production process.
17. In the list of Sales Orders, the Sales Order has the Ready to ship status. It means that it is not shipped yet .In the list of Production Orders the Production Order has both Start Date and End Date filled in and the Finished status.In the Stock report you have finished products On Hand. They are Committed (reserved for Sales Order), so Available quantity is 0.
18. After production is completed, the dresses are ready for shipment. You can see it because the Status of Sales Order was changed. Also you can be informed by your colleagues who finished the last stage. G to the Sales Order and create Shipment and Sales Invoice, if necessary.