Add Manufacturing Order

What is a Manufacturing Order?

A manufacturing order is a document that provides instructions related to the manufacturing phase, often generated from a Bill of Materials.

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 completed, the specified quantity of the manufactured product is added to the warehouse you have designated.

Adding a Manufacturing Order

1. From the main menu click on “Manufacturing“.
2. Choose “Manufacturing Order” from the dropdown.
3. Click on “Add Manufacturing Order“.
4. Enter the manufacturing order information as follows:
   • • 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 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 route to be assigned to the manufacturing order.
     • For more details on how to add a production routing, refer to this guide.
   • 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 your 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.
   • 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.
     • Cost Type: There are three different ways to calculate costs, and the difference becomes evident when issuing a manufacturing order with a quantity different from that listed in the BOM.
     • Choose from the following options:
       • Fixed Amount: In this case, the cost remains fixed even if the number of products in the manufacturing order changes.
         • Example: If an expense costs 100 and the BOM lists a quantity of 5, but the manufacturing order is changed to 7, the cost remains 100 and will be allocated to the 7 products instead of 5.
       • Based on Quantity: In this case, the cost is distributed across the quantity of products listed in the BOM. If the quantity in the manufacturing order changes, the total cost is recalculated based on the new number of units.
         • Example: If an expense costs 100 and the BOM lists a quantity of 5, but the manufacturing order is changed to 7, the total cost will change to 140.
       • Formula: The formula is a flexible method where you can enter variables to calculate the cost based on them.
         • The default system formula is: Amount in BOM * (Quantity in BOM / Quantity in Manufacturing Order) This method is the same as calculating cost based on quantity.
     • Amount: Enter the value of the expense.
     • 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.
   • 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.
     • 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.
   • Scrap Items
     • Products: Enter the product to be considered waste.
     • Quantity: Enter the quantity of the waste product.
     • Price: Enter the price of the waste product.
     • Production Operation: Select the production stage where the waste product is generated.
5. Click on “Save.”