Discrete manufacturing life cycle

  • 20 minutes

The production of items follows a sequential production life cycle. The life cycle reflects the actual steps that are taken to manufacture an item. It begins with the creation of a production order and ends with a finished, manufactured item that is ready for the customer. Each step in the life cycle requires different kinds of information.

The Production control module is linked to these other modules in Supply Chain Management and Dynamics 365 Finance.

  • Inventory management
  • Warehouse management
  • General ledger
  • Master planning
  • Organization administration

This integration supports the information flow that is needed to complete the manufacturing of a finished item.

When a step in the life cycle is completed, the production order signals this completion by a change in the production status. If one or more of the mandatory steps (or updates) are skipped, the steps are performed automatically before the production order is moved to the next step. The production order is assigned a status that reflects where it is in the production life cycle.

The status on the production order reflects the sequential steps of the production life cycle. The following list is an overview of the status that a production order can have.

  1. Create - The status of the production order when it is first created.
  2. Estimate - The status of the production order after running a material and cost estimation.
  3. Schedule - The status after running operation or job scheduling.
  4. Release - The status when production orders are scheduled and have been released to production.
  5. Start - The status of the production order when production starts.
  6. Report as finished - The status of the production order when production is finished and ready for final action.
  7. End - The status of the production order after final costs have been applied, the item is complete, and the order is no longer active.

Watch the following videos for demonstrations of these stages of production.

Create, estimate and schedule production.

Release, Start, Report as finished, and end a production order.

You can change information on production orders up to and including those with Release and Start statuses. However, if the changes affect cost estimates or scheduling, you must run the Estimation process, or you should run Operations scheduling or Job scheduling (or both) again to update the information.

The Production control module supports a company's ability to maintain various production sites that are distributed over different geographic locations. The production sites must be contained within a single legal entity.

Create and estimate

The first two steps of the production life cycle are Create and Estimate, and are part of the preproduction stage.

Create

You can create production orders manually or automatically from a sales order or master planning schedule. When the order is created through the master planning process, the production orders are generated based on demand. When the planned order is firmed, a production order is created and automatically sets to the scheduled state. If the planned order is not firmed, then it appears in the Production control module as a production order. If created manually, the planned order is also called a production order.

The inventory transactions for the BOM item are generated in the Create stage.

Estimate

You can calculate material and resource consumption. The estimation creates inventory transactions for raw materials that have a status of On order. When production orders or batch orders have been estimated, receipts are generated. Purchase orders for materials or subcontracted operation services are attached to the production or batch order if the Bill of material has lines of the Pegged supply type.

The reservation strategy of the production order determines the items or orders that are reserved. Based on parameter settings, the price of the finished goods are calculated.

Schedule

Scheduling is the next step in the production life cycle. You can run scheduling after the production order has been created and estimated. Running the scheduling step raises the production order status to Scheduled. Because the production life cycle is sequential, if the production order has not already been estimated before it is scheduled, an estimation of the projected cost is run automatically.

After the production order has been estimated (which is mandatory and run either automatically or manually), it is scheduled. Production orders can be scheduled based on operations scheduling, job scheduling, or both.

  • Operations scheduling - This scheduling provides a rough, long-term plan. By using this method, you can assign start and end dates to production orders. If the production orders are attached to route operations, you can assign them to Resource groups.
  • Job scheduling - This scheduling method provides a detailed plan. Each operation is broken down into individual jobs with specific dates, times, and assigned resources. If finite capacity is used, jobs are assigned to resources based on availability. You can view and change the schedule in the Gantt chart.

Release and start

The next steps of the production life cycle are Release and Start, and both are part of the production stage.

Release

The production order is released when the schedule is realistic and finalized. Production order documents such as the job card, the route card, and route job can be printed. The status of the production order at this stage changes to indicate that the production can start. Jobs will be visible in the Job Card Terminal and Job Card Device after Release. Also, you can tie release to warehouse for pick work to the production order release process.

Start

When a production order is started, material and time consumption can be issued to the order by using the journals. Estimated material and route costs can be allocated automatically to the order when it is started. This allocation is known as preflushing or auto consumption.

You can manually allocate material to the order by creating picking list journals and then manually allocate labor and other route costs to the order. If using operations scheduling, you can allocate these costs by creating a route card journal; if using job scheduling, you can allocate these costs by creating a Job card journal.

Report as finished

When the production order is reported as finished, the quantity of finished goods that are completed is updated in the Inventory management module and ready to be put-away to a warehouse location or a shipping area

If you are using work-in-process (WIP) accounting, Supply Chain Management creates a ledger journal to reduce the WIP accounts and increase the inventory of the finished goods by using the standard cost from the Item details page.

When you calculate the cost of a production order, the system posts the actual cost of the production and then reverses the posting that occurs during the report-as-finished phase. If the material and labor costs that are associated with production are not already allocated in a journal or by preflushing, you can automatically allocate them by back-flushing, which involves the post-deducting of inventory transactions processes.

If the production order is complete, select the End job field to change the remaining status to End. Otherwise, it is left open to report other quantities that are produced.

End

The final step in the production life cycle is End, and it is part of the post-production stage. Before you end production, actual costs are calculated for the quantity that was produced.

All estimated costs of material, labor, and overhead are reversed and replaced with actual costs. If you select the End job check box when you run the cost calculation, the production order status changes to Ended.

The Ended status prevents any other costs from being inadvertently posted to a completed production order.

Example

A sales order is received and entered into the system by the Order processor, and a production order is created to fulfill the sales order demand.

Note

In most cases, the production order is not created along with the sales order but created when you are firming a planned production order after running master planning.

The Planner, either runs the plans manually or allows the plans to run automatically based on a defined schedule by a batch job.

The Purchasing manager will create the purchase order for the raw materials from a vendor, preferably an approved or preferred vendor because there might be trade agreements to secure the purchase price for a specified time.

The Warehouse manager plans and allocates tasks to warehouse workers to prepare the locations in the warehouse. The raw materials arrive and are registered in Supply Chain Management, and then a warehouse worker receives raw materials by placing them in a proper location.

The Production manager, along with the Production floor (shop floor) manager, assigns operators to specific production orders on a machine to perform the job. The Production manager can also receive an overview of the resources and their use in the resource overview forms and by using the Gantt chart for optimizing the production plan.

By using time and attendance, the Production floor (shop floor) manager can schedule production orders based on availability of resources.

The Machine operator uses the job card terminal or job card device, which is a part of the Manufacturing execution module, to register when they start and ends a job, enter the quantity completed, and log error quantities for each production job.

When the production is reported as finished, the quality control team might need to test the finished goods prior to changing the status of the production order to End.

When the production order is ended, the Warehouse manager dedicates a warehouse worker to move the finished goods to a location for outbound processing, such as a place to pick, pack, and ship to the customer.

The Order processor can then invoice the customer upon delivery of the goods.