"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. Preparation: Create product cards for both raw materials and finished goods, then create BOM.
2. Create Sales Order.
3. Add related Production Order to the Sales Order (button ‘Add Related’ >> ‘Stock Replenishment’).
4. Go to created Production Order.
5. In Production Order check if you have enough Raw Materials to produce it. If not — Create a Purchase Order (button ‘Supply’).
6. Go to Purchase Orders, buy raw materials according to it. When you receive raw materials in your warehouse, create Receiving (in Purchase order button ‘Add Related’ >> ‘Receiving’).
7. Go to Production Order again, now you can see that you have enough raw materials and you can start production process (button ‘Start to produce’ in tab ‘Process tracking’).
8. After the production process is finished, go to Sales Order again. Create Shipment and dispatch produced goods to your customer.
9. Use Statuses in both Sales Order, Purchase Order and Production Order to mark the progress, statuses for this process can be changed only manually (for now we don’t support Workflows for Production section).
10. Also manually change statuses in Related transactions. It helps your colleagues to see when they can proceed with their part of the process (analyse 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 (tick ‘Allocate order to committed stock’ in transactions). If not reserved — both goods and materials will look like ‘available’ for other orders and can be unintentionally sold or used for other Production Orders.
• Prohibit ‘negative stock’ for accurate stock counting process. For this in Settings >> Account Settings choose ‘Disallow records that reduce Stock below zero’.
• If you plan to dispatch to your customer by batches (not wait for the entire Production Order is ready before starting to dispatch), then create one of the following:
  • few product lines with finished goods in Production Order,
  • several Production Orders related with Shipment Order.

For more information, see How to produce and ship in several batches against one Sales Order.

Use case example

Let’s imagine that we sew dresses. In this case, we 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.

In the Kladana workspace, we have to do the following steps:

1. We create product cards (both for finished dress and raw materials). Also product cards can be created during the BOM creation.
2. We create ‘dress sewing’ routing and then BOM. In BOM we define finished product = dress, minimum of dresses that can be produced via 1 production cycle and how much materials we need for every stage of Routing. More information on how to create Routings and BOMs.
   
   
   If you don’t need to track every stage of production separately, you can create Routing with the only 1 production operation, e.g. ‘main operation’.
   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
3. Then let’s go to the Sales module, Sales Orders section. We created a Sales Order for 10 dresses. More information about Sales Orders. We can see that we don’t have enough quantity as ’Available’, so we need to produce dresses. We change Sales Order status as ‘to produce’.
   
   In Sales Order some default statuses are configured, in other transactions Statuses are empty. You can change names of Statuses in Sales Orders and configure Statuses in other types of transactions.>More information on how to manage statuses.
   
   In general you have to change status manually. For some cases Workflows can be configured, via Workflow you can create a rule when some statuses can be changed automatically as a response to some trigger action. But for now we don’t support Workflows for the Production module.
4. In the Sales Order we choose ‘Add Related’ >> ‘Stock Replenishment’. In the interface we choose ‘Fill up stock by’ >> Production Order. Before we already created BOM where our dress is a finished product, so in Stock Replenishment BOM is substituted automatically. Then we fill the quantity to produce and press the ‘Create’ button.
5. After this we go to Production >> Production Orders. Here we find our newly created Production Order, open it and check all fields in the header and in the tab Finished Products. More about how to create Production Order.
6. After this we go to the tab Raw Materials in the Production Order. We analyze if we have enough materials to produce using ‘Available’ column. If not — we need to purchase them, for that we press ’Supply’ button and create a Purchase Order. More information on how Supply works.
   
   
   Before starting the Supply process we recommend to set up Status like ‘waiting for supply’ for Production Order.
   Don’t forget to reserve raw materials (put tick ‘Allocate order to committed stock’). If they are reserved eben before receiving them from Supplier, it will prevent their usage for other Production Orders.
   You may have plenty of raw materials on stock, but they can be reserved by the other Production Orders. So take into account only the ‘Available’ column in the Supply interface.
7. Let’s take a look what happens in the lists and Stock report at that moment:
   • In the list of Sales Orders we see the Sales Order as not shipped yet, with status ‘to produce’. If we go into it and open tab ‘Related transactions’ we see that Sales Order is linked with Production Order in status ‘waiting for supply’, and Production Order is linked with Purchase Order.
     
     
   • In the list of Production Orders we see our order with no Start Date and in status ‘waiting for supply’. We can also see Related transactions for it.
   • In the list of Purchase Orders we see new Purchased Order.
   • In Stock report we can see that we still don’t have neither raw materials or finished product On Hand, but they are Committed (reserved for Production Order and Sales Order), so Available quantity is negative (only in this case, when we don’t have another orders; in real life all numbers in report are calculated cumulatively, so the picture won’t be like this).
8. Then let’s purchase raw materials from the Supplier. In the newly created Purchase Order we check all data in the fields, if required add some line items or change quantity of products. Then we send a Request for Quotation to our Supplier (for this you can use the ‘Send by email’ function).
   After receiving confirmation from the Supplier we can change the status of the Purchase Order and wait when raw materials arrive at the Warehouse.
9. When raw materials come to the Warehouse, we create the Receiving (in Purchase Order via Add Related >> Receiving). After saving the Receiving our raw materials are in stock and we can start the production process.
   
   If you use Statuses for Production Orders we recommend to the person who is responsible for the purchasing process to change 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 more than one Supplier he should take this into account.
10. To proceed with the production process we go to our Production Order, tab Process Tracking and press the ‘Start to produce’ button. While we complete stages of production we mark them as completed in Kladana and finish production of our dresses. More information on 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.
    If you use Statuses for Production Orders and Sales Orders we recommend to the person who is responsible for the production process change statuses:
    • When production is started: in Production Order 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 from ‘in production’ >> to ‘finished’ and in related Sales Order from ‘in production’ >> to ‘ready to ship’.
      >That helps to monitor Sales Orders state and properly inform customers.
      
      If you use the field ‘Scheduled Production Date’ it can be clarified or changed at the moment of starting the production process.
11. In the list of Sales Orders we see the Sales Order as not shipped yet, with status ‘ready to ship’.In the list of Production Orders we see our order with both Start Date and End Dates filled and in status ‘finished’.In the Stock report we can see that we have finished products On Hand, they are Committed (reserved for Sales Order), so Available quantity is 0 (only in this case, when we don’t have another orders; in real life all numbers in report are calculated cumulatively, so the picture won’t be like this).
12. After production is completed, the dresses are ready for shipment. We can see it because the Status of Sales Order was changed. Also we were informed by our colleague who finished the last stage. We go to the Sales Order and create Shipment and if necessary — Sales Invoice.