Production order

Production orders are basis for IT system of automatic demand planning and scheduling. They are created on the basis of orders submitted by customers. Specific set of production needs are counted and the electronic documents generated, for example: resource purchase order or acceptance of a lot to store.

When entering an order in IT system user chooses what type of order to use or uses the default type, related to the given customer. Order type controls its circulation and defines stages of processing connected to it.

Process of preparing production order

In the initial phase of the order, user creates a printout of the order confirmation and sends it to customer. Printing is possible at any stage of the procurement cycle.

Accounting for the sale of products starts with ordering. It specifies the set of items of goods sold, along with all the information. These include: information about the delivery, correspondence data.

The system then create a list of releases, that include information about products booked and issued in a specific storage location. List of releases is essential information about the item and the quantities that will be issued in a specific order. After the release of items from the warehouse, system creates magazine report. It can be done manually or automatically.

The next stage of the production order is shipping, it is the process of handing out sold items. The final step is to create an invoice on the basis of the submission of customer orders, registered in the system. After they are created they can be processed and sent to clients.

Examples of Production order

• Work order: A work order is a document that provides instructions for a manufacturing or production process. It is typically generated in response to a customer request or demand and is used to track the progress of the work as it goes through various stages of production.
• Manufacturing order: A manufacturing order is an electronic document that is used to give instructions to a manufacturing facility or supplier. It outlines the specific product or service that needs to be produced and includes details such as the quantity and due date.
• Material requisition: A material requisition is a document used to request materials from a vendor. The requisition includes information such as the type and quantity of materials that are needed, and the expected delivery date.
• Job order: A job order is a document that is used to define the requirements of a job. It may include the duties and responsibilities of the job, the qualifications of the job holder, the expected duration of the job, and any other details related to the job.
• Purchase order: A purchase order is a document used to formalize a purchase between a buyer and a seller. It includes details such as the items to be purchased, the quantity and unit price of each item, and the expected delivery date.
• Production schedule: A production schedule is a document that outlines the timeline for the production of a product or service. It typically includes details such as the start and end dates for each stage of production, the resources that will be needed, and any other relevant information.

Advantages of Production order

Production orders are essential documents for automatic demand planning and scheduling. They have several advantages:

• They allow for accurate and precise planning of resources needed to fulfill customer orders. This helps to ensure that all necessary materials and components are available at the right time, in the right quantities, and of the right quality to meet customer demand.
• Production orders allow for better tracking of raw materials and finished products, which helps to reduce waste and inventory costs. This, in turn, can result in cost savings for the company.
• Production orders also provide visibility into the production process, allowing for better monitoring of production progress and improved performance.
• Production orders can also help to boost customer satisfaction levels, as they enable the production of the exact product specified by the customer.

Limitations of Production order

A production order can have several limitations, such as:

• Inaccuracies in estimated demand: Production orders can be inaccurate if the demand is overestimated or underestimated, leading to production delays or overproduction of goods.
• Lead time: Depending on the complexity of the product, the lead time required to complete the production order can be long and lead to additional delays.
• Limited resources: If the required resources are not available or are in short supply, production orders can be delayed.
• Cost of production: The cost of production can be high and can affect the profitability of the business.
• Quality control: Quality control of the produced goods is essential to ensure that the product meets customer standards and expectations, but can be difficult to control in a production order.
• Inventory management: Managing the inventory associated with a production order can be difficult and can cause delays or shortages.

Other approaches related to Production order

Below are some other approaches related to Production order:

• Automated Production Planning and Scheduling (APPS): This approach utilizes software and algorithms to create production plans and schedules that are optimized for cost, time, and resource utilization.
• Process and Activity-Based Planning: This approach focuses on designing production processes and activities that are tailored to specific business objectives.
• Lean Manufacturing: This approach utilizes principles of lean manufacturing to reduce waste and improve efficiency in production.
• Demand-Driven Manufacturing: This approach is based on real-time demand for products, allowing for more accurate and timely production plans.

In summary, there are several approaches related to production order that can be utilized to increase efficiency and optimize resource utilization. Automated Production Planning and Scheduling, Process and Activity-Based Planning, Lean Manufacturing, and Demand-Driven Manufacturing are all approaches that can be used to create efficient and cost-effective production plans and schedules.

Production order — recommended articles

Master production schedule — Inventory system — Production logistics subsystem — Optimization of the production run-length — Inventory record — Contract logistics — Procurement logistics — Dependent demand — Finished goods inventory

References

• Kimura, O., & Terada, H. (1981). Desiǵn and analysis of Pull System, a method of multi-staǵe production control. The International Journal Of Production Research, 19(3), 241-253.