Manufacturing Orders Guide

A manufacturing order, which is usually made from a bill of materials, is a document that gives you the actual steps for the manufacturing phase.

The manufacturing order contains all the financial and operational data related to the product. Based on this information, you can create a stock request for the raw materials needed for the manufacturing process, as well as a requisition to release these raw materials from your inventory. Additionally, a detailed and summarized cost report is generated.

Once the manufacturing order is finished, the specified quantity of the manufactured product will be added to the warehouse you have designated.

Adding Manufacturing Orders

You can create a manufacturing order linked to one of the Bills of Materials (BOMs) in the system. In this case, the manufacturing order information will be automatically generated based on the data in the selected BOM.

Alternatively, you can create a manufacturing order independently of the BOMs, allowing you to manually enter all the required information.

To create a manufacturing order linked to a BOM, you can either:

Create the manufacturing order directly from the BOM page, as explained in the BOM creation guide.
Or choose the BOM you want from the manufacturing order creation page.

Click on “Manufacturing” then click on “Manufacturing Orders” then Click on “Add Manufacturing Order“ button.

Enter the Manufacturing Order information according to the following classification:

Manufacturing Order Information

Name: Enter a name for the manufacturing order.
Code: A unique automatic code for each manufacturing order, generated by the system.
Start Date: Enter the start date for the manufacturing order.
End Date: Enter the end date for the manufacturing order.
Account: Choose an account from the chart of accounts to assign to the manufacturing order.
- You can modify the chart of accounts and add a new account for the manufacturing order. For more details on how to add a new account, refer to this guide.
Employees: Select the employee to assign the manufacturing order to from the dropdown list.
Customer: Select the customer to assign the manufacturing order to from the dropdown list.
Products: Select the final product to be manufactured from the dropdown list.
- The product must already be added in your system in order to appear here. For more information on how to add a new product, refer to this guide.
Req. Quantity: Enter the required quantity of the product.
BOM: Choose the Bill of Materials for which the manufacturing order is to be created.
- If you have already added a BOM that includes this product and the “Default” option is activated for that BOM, it will be automatically selected in the manufacturing order when you choose the product.
  
  However, if there are BOMs for the product but none are set as default, a dropdown menu will display all the BOMs associated with that product, allowing you to select one if desired. Alternatively, you can choose not to select any BOM and enter all the manufacturing order information manually.
- If you have already added a BOM that contains this product and it is set as the “Default” BOM, it will automatically be selected once you choose the product.
Production Routing: Select the production routing to be assigned to the manufacturing order.
- For more details on how to add a production routing, refer to this .

In the example shown in the previous image:

We adjusted the quantity of the final product, which was automatically generated, to match the BOM quantity (10). The new manufacturing order quantity became (12).

This change affects the quantity of raw materials consumed in the manufacturing order and, consequently, the cost of the raw materials. In other words, the quantity and cost of raw materials increase proportionally to the increase in the quantity of the final product.

The following image displays the quantity of the final product as per the BOM which is selected in the manufacturing order:

Materials

- Products: Choose the raw materials used in manufacturing the product.
  - The raw material must be added as a product in your system. For more information on how to add a new product, refer to this guide.
  - Click the “+Add” button if you need to add more raw materials.
- Planned QTY: Enter the quantity of each raw material needed to manufacture the required quantity of the final product.
  - The unit of measurement for quantity is based on the unit defined when adding the raw material to the products in the system.
- Price: This is automatically determined based on the price entered when adding the raw material to inventory. It will either match the average cost price or the purchase price if there is no average cost available due to different purchase prices.
- Production Operation: Specify the stage in the production process where this raw material is needed.
- Note: The material fields will automatically appear if you select a BOM that includes the raw materials and their details.

In the example shown in the previous image (within the manufacturing order):

Due to the change in the quantity of the final product in the manufacturing order compared to the quantity specified in the selected BOM, the quantity of raw materials in the manufacturing order was automatically adjusted to match the new final product quantity. Consequently, the total cost of raw materials in the manufacturing order changed from the total in the BOM.

The following image displays the quantity and cost of raw materials in the selected BOM within the manufacturing order:

Expenses

- Account: Enter the account to link this expense to from the chart of accounts.
  - You can modify the chart of accounts and add a new account for this expense. For more details on how to add a new account, refer to this guide.
- Estimated Amount: Enter the expense amount if the manufacturing order is not linked to a Bill of Materials (BOM). If the manufacturing order is linked to a BOM, the value will be automatically displayed based on the cost type and the quantity of the final product in the manufacturing order.
- Description: Add a description related to the expense.
- Production Operation: Select the production stage where this expense occurs.
- Note: The expense fields will automatically appear if you select a BOM that includes the expenses and their details.

In the example shown in the previous image (within the manufacturing order):

The value of the first expense remains the same as in the BOM example, despite the change in the quantity of the final product in the manufacturing order compared to the BOM. This is because the cost type is set to “Fixed Amount.”

However, the value of the second and third expenses changed in the manufacturing order due to the change in the quantity of the final product. This is because their cost types are set to “Based on Quantity.” and “Formula.”

The following image shows the cost type and amount for each expense in the selected BOM within the manufacturing order:

Manufacturing Operations

- Workstation: Choose the workstation from the list of workstations that you have previously added in the system.
- Operating Time: Enter the operating time based on the unit set for the workstation.
  - Example: If the unit for the workstation is “minutes” and you want the operating time to be one hour, enter 60. If the unit is “hours” and you want the operating time to be one hour, enter 1.
  - If the manufacturing order is linked to a bill of materials (BOM) with a specified operating time, and the quantity of the final product in the manufacturing order differs from the quantity in the BOM, you will find that the operating time and the calculated amount for the workstation have been adjusted to match the manufacturing order product quantity.
- Description: Add any description related to the workstation.
- Production Operation: Select the production stage for this workstation.
- Note: The manufacturing operations fields will automatically appear if you select a BOM that includes manufacturing operations and their details.

In the example shown in the previous image (within the manufacturing order):

The calculated amounts for the first and third workstations remain the same as in the BOM example, despite the change in the quantity of the final product in the manufacturing order compared to the BOM. This is because their cost type is set to “Fixed Amount.”

However, the calculated amounts for the second and fourth workstations were adjusted in the manufacturing order due to the change in the quantity of the final product compared to the BOM. This is because their cost types are set to “Based on Quantity” and “Formula.”

The following image shows the cost type and amount for each workstation in the selected BOM within the manufacturing order.

Scrap Items

Products: Enter the product to be considered waste.
Quantity: Enter the quantity of the scrap item.
- If the manufacturing order is linked to a bill of materials (BOM) that specifies the quantity of scrap item, and the final product quantity in the manufacturing order differs from the quantity in the BOM, you will find that the quantity and price of the scrap item have been adjusted to match the manufacturing order final product quantity.
Price: Enter the price of the scrap item.
Production Operation: Select the production stage where the scrap item is generated.

In the example shown in the previous image (in the manufacturing order):

You will find that the quantity and price of the scrap item have been adjusted to match the increase in the final product quantity in the manufacturing order compared to what it was in the bill of materials.

In the following image, the quantity and price of each scrap item in the bill of materials selected in the manufacturing order are displayed.

Actions on the manufacturing orders

After saving the manufacturing order, you can perform several actions, such as “Edit,” “Duplicate,” and “Delete.”

You can also review the details of the manufacturing order and the activity log to track the actions performed on it and their timing.

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