Glossary
What is a work order?
What a work order is in a factory or workshop, the steps it goes through, and how it changes stock and cost when it completes.
Updated
In short
A work order is an instruction to make a quantity of a product from its bill of materials. In SimpleERP a work order runs planned, in progress and completed, and completion consumes components and adds finished goods at actual cost.
A work order is an instruction to make a set quantity of a product from its bill of materials. It moves from planned to in progress to completed. On completion it records what was really consumed, takes those components out of stock, and adds the finished goods at their actual cost, so stock and the books show what production truly used.
Work order: a worked example
Lakshmi Steel plans 50 Steel rack 4 shelf, five batches of the 10-rack BOM. Two shelf panels were dented on the line and half a kilo of paint was saved, so actual consumption differs from the plan.
| Component | Planned | Consumed | Average cost | Cost |
|---|---|---|---|---|
| Slotted angle 6 ft | 200 Nos | 200 Nos | ₹310 | ₹62,000 |
| Shelf panel 36 × 18 in | 205 Nos | 207 Nos | ₹290 | ₹60,030 |
| Nut and bolt set | 1,600 Nos | 1,600 Nos | ₹2 | ₹3,200 |
| Powder coat paint | 21 kg | 20.50 kg | ₹450 | ₹9,225 |
| Material cost | ₹1,34,455 | |||
| Labour and power, 5 batches | ₹21,900 | |||
| 50 racks into stock | ₹1,56,355, so ₹3,127.10 each |
FAQ
Questions, answered
What are the stages of a work order?
Planned, when materials are worked out from the BOM; in progress, once production starts; completed, when you enter what was produced and consumed. Only completion moves stock. A planned or in-progress order can be cancelled without touching stock.
What if we make fewer units than planned?
Enter the quantity actually produced. SimpleERP scales the consumed quantities in proportion as a starting point, and you can change any line to what really left the shelf. The cost per unit is worked out from those actual figures.
Can I start a work order without enough raw material?
You can plan it; shortfalls are shown against what is available in the source warehouse. Completion is refused if a component would go below zero, unless negative stock is allowed in settings.
Can a work order come from a sales order?
Yes. From a confirmed sales order line whose product has a BOM, create a work order with the product and quantity filled in. The sales order then shows its linked work orders and their status.
Related
Keep reading
Bill of materials (BOM)
The recipe for a manufactured product: components, quantities per batch, expected scrap and extra cost per batch.
Read moreConsumption
Material used up in production, recorded when work completes or worked out as opening stock plus purchases less closing stock.
Read moreManufacturing
Bills of materials with scrap and cost roll-up, and work orders from plan to complete.
Read more
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