February 12, 2020

Production Orders with M-Dynamics 365

Small Business
Ronald B. Allen

An excellent resource for producing production orders is Business Central within Microsoft Dynamics 365. The comprehensive software in this intelligent business solution contains all of the necessary steps from receiving a sales order for products to shipping them from the production floor. If requisition orders are needed for parts produced offsite, this is included as well. The software includes the ability to generate planned costs and capacity requirements. It checks to see if materials are in stock and can generate requests of needed items.

As a production order is a tool to handle the process by which purchased elements are converted into finished products, Dynamics 365 Business Central handles the routing of materials to and schedules work at the correct production locations.

The traditional process that companies follow is to do weekly supply planning. At that time they decide on the number of purchase orders to fill and the number of production orders to execute in order to satisfy the sales demand of that week. Depending on how long it takes to make their products, the time frame may be shorter or much longer than a week. Dynamics 365 holds all of the information needed to satisfy the bill of materials (BOM) associated with each end product.

Information Contained in Dynamics 365 Production Orders

Dynamics 365 Business Central will carry all of the necessary information for production orders to be generated:

• Products to be manufactured

• Lists of materials needed for each planned production order

• Listing of just-manufactured products

• Listing of materials already selected

• History of all previously manufactured products

• Lists of materials use for prior manufacturing runs

Dynamics 365 allows you to do the following:

• Plan future manufacturing jobs

• Control the manufacturing jobs you are doing

• Track manufacturing during the process and when it is finished

• Create Production Orders

With Business Central in Microsoft Dynamics 365, you can create production orders one at a time and manually on a Production Order page and from either the Order Planning or Sales Order Planning pages. And, you can do multiple orders are created from the Planning Worksheet page.

Dynamics 365 creates production orders from the following:

• Production bills of materials

• Routings

• Machine centers

• Work centers

• Limitations on the Creation of Production Orders

It also tracks and tracks to the source when the following occur:

• Creation from a Panning Worksheet

• Creation by the Order function found on the Sales Order Planning page

• Creation from the Order Planning page

• When using the Replan function for production orders

More info about this can be found under “Track Relations Between Demand and Supply.”

Automatic reservation and tracking do not occur when production orders are created by other means.

Status of Production Orders

How the production order behaves within the application is managed by production order status controls. As orders move through production the form and content of the production change with the status of the order. At each step, the page will display differently in order to provide the necessary information. If you want to change this, you need to use the Change Status function. It cannot be done manually. This is a useful feature as it helps avoid undesired changes in the functions of the software.

Functions for Working with Production Orders

Business Central in Dynamics 365 has a very effective step-by-step way to create production orders.

• Simulated Production Order

• Planned Production Order

• Firm Planned Production Order

• Released Production Order

• Finished Production Order

• Production Order Execution

This setup allows you to work through the creation of work orders in an orderly and efficient manner and make corrections as needed. Here are brief snapshots of each step.

Simulated Production Order

The reasons for this step are to do quoting and costing and to allow you to test various scenarios. The simulated order does not make changes in how orders are planned and it disappears when its status is changed. (It cannot be used as a template.)

Planned Production Order

A planned production order can be automatically generated starting from a sales order. They resemble released production orders in that they provide information for capacity requirements when they show the total capacity requirements broken down by work center and machine center.

The main value of a planned production order is that it is the best estimate of work center and machine center workloads using the most current information. These orders can be done manually but are typically generated from planning. They are erased as you move through several generations of planning, so manual creating of planned production reports is wasteful and not practical.

What you get out of the planned production order is a planned order release containing the following.

• Quantity

• Release Date

• Due Date

Dynamics 365 uses reorder policies, your replenishment system, and order modifiers that you have set up to do its calculations. This step lets you see all work center workloads and how they are affected by the proposed production order.

Firm Planned Production Order

This is the first step in creating production orders that is not erased as planning proceeds. It can be created automatically from your sales order. It functions as a placeholder in your planning schedule for future jobs to be released to the production floor. Because a planned production order is not erased you proceed, manual create is a practical approach in this case. Like the planned production order step, this report provides quantities, release dates, and due dates as part of the planned order release. And, its programming consults reorder policies, the replenishment system, and your order modifiers to complete the task. To view their impact, look at the load for each work center or machine center on the firm planned production order's routing.

Released Production Order

This production order can be generated from a sales order and released immediately. This is common in Make-to-Order manufacturing. However, when this step in the production order scheme of things is released, it not mean that the job has been moved to its production location or even that materials have been picked.

However, at this step manual recording of product output and material consumption is possible. This is the first step at which automatic flushing of consumption occurs.

Finished Production Order

The finished production order is usually what has already been manufactured and it cannot be modified or changed. This is the last and essential step in the production order process as it completes the costing lifecycle for production items. Here is where costing is adjusted and reconciled.

You will use finished production orders for reporting statistics and to backtrack to other orders, purchases, sales, and production runs. This where you can review detailed production histories if you are looking at problems or ways to improve your procedures and processes.

Production Order Execution

This is the point at which the order has been released to the production floor for order execution. At this time the system can record exact materials picked and consumed. Time spent working on other orders is recorded as well as the quantities produced. The information can be either recorded manually or automatically using items set up within the Flushing Method field.

Dynamics 365 records details of materials consumption. This can be done with a consumption journal or processed automatically using Manual, Forward, or Backward methods. The methods a company chooses will be determined by factors such as the frequency of component substitutions and how much material is scraped.

Manual consumption reporting uses the consumption journal while forward consumption reporting assumes that the projected quantities of all materials are consumed. This can be modified by using routing link codes, in which case, material consumed is recorded in the Output Journal. The complete production order can be forward-flushed by either of two methods. All items have forward flushing chosen on their item cards. Or, all link codes on the BOM have to be removed.

When you use backward consumption reporting, you are recording the real quantities of all materials picked and consumed when you change the production order status to finished. But, if you use link codes, materials consumed are recorded in the Output Journal.

Dynamics 365 Handles Production Orders and More

As you can see, the capabilities of Microsoft Dynamics 365 don’t stop with the production of planning orders. They go on to manage the production process as well.

This intelligent business software integrates with business intelligence tools like Microsoft Power BI to most-effectively manage all aspects of sales, production, customer management, and other accounting and business functions. Dynamics allows you to run your business efficiently while you are expanding and changing it. If your business expands to multiple locations, there are accounting programs based on Dynamics, like Gravity Accounting Software, that track more than one company.

If you need a better method of producing production orders, a system that integrates this job with your entire range of business needs and a system that is scalable as your business grows, contact us at Exigo Business Solutions about Microsoft Dynamics 365.

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