Production control D365 F&O Production order life cycle

Overview of the production life cycle

The following steps in the production life cycle can occur for all order types of mixed
mode manufacturing. However, not all of them are represented as an explicit order
status.

1. Created – You can create a production order, batch order, or kanban

manually, or you can configure the system to generate them based on
various demand signals. Master planning creates production orders, batch
orders, or kanban’s by firming planned orders. Other demand signals are
sales orders or pegged supply signals from other production orders or
kanban’s. For fixed-quantity kanban’s, demand signals are generated when
kanban’s are registered as empty.
2. Estimated – You can calculate estimates for material and resource
consumption. The estimation generates inventory transactions for raw
materials that have a status of On order. The receipts for main products,
co-products, and by-products are generated when production orders or
batch orders are estimated. If the BOM contains lines of the Pegged
supply type, purchase orders for materials or subcontracted operation
services are generated and pegged to the production order or batch order.
Items or orders are reserved according to the reservation strategy of the
production order, and the price of the finished goods is calculated based on
parameter settings.
3. Scheduled – You can schedule production based on operations, individual
jobs, or both.
 Operations scheduling – This scheduling method 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
cost center groups.
 Job scheduling – This scheduling method provides a detailed
plan. Each operation is broken down into individual jobs that
have specific dates, times, and assigned operations resources.
If finite capacity is used, jobs are assigned to operations
resources based on availability. You can view and change the
schedule in a Gantt chart.
 Kanban schedule – Kanban jobs are scheduled on the kanban
schedule board or automatically scheduled based on the
automatic planning configuration of the kanban rules.
4. Released – You can release the production order or batch order when the
schedule is finished and the material is available to be picked or prepared.
The material availability check helps the shop floor supervisor assess the
availability of material for the production orders or batch orders. You can
also print the production order documents, such as the pick lists, job card,
route card, and route job. When the production order is released, the status
of the order changes to indicate that the production can begin. When
warehouse management is used, release of the production order or batch
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 Production control D365 F&O Production order life cycle

order releases the production BOM lines to warehouse management.

Warehouse waves and warehouse work are then generated according to
the setup of the warehouse.

5. Prepared/Picked – When all materials and resources have been staged at

the production location, the production BOM lines or kanban lines are
updated to a status of Picked. Pegged supply orders and related
warehouse work are typically completed at this stage. The kanban cards or
job cards that are required to report production progress should be
assigned and printed.
6. Started – When a production order, batch order, or kanban is started, you
can report material and resource consumption against the order. The
system can be configured to automatically post the material and resource
consumption that are allocated to the order when the order is started. This
allocation is known as pre flushing, forward flushing, or auto consumption.
You can manually allocate materials to production orders or batch orders by
creating additional picking list journals. You can also manually allocate
labor and other route costs to the order. If you're using operations
scheduling, you can allocate these costs by creating a route card journal. If
you're using job scheduling, you can allocate the costs by creating a job
card journal. Production orders or batch orders can be started in batches of
the requested final quantity. Within a production order, batch order, or
kanban, the jobs that are created can be started and reported separately
through journals, the manufacturing execution terminal (MES Terminal), or
the kanban boards.
7. Report progress/Complete jobs – Use the MES Terminal, production
journals, kanban boards, or mobile scanning capabilities to report the
production progress by job or resource. Material and resource consumption
will be posted, and the status of the related kanban’s, production orders,
and batch orders might be updated to Received or Reported as finished.
Put-away work for the warehouse might be created, depending on the
warehouse configuration.
8. Reported as finished (the product receipt) – When a production order or
batch order is reported as finished, the quantity of the finished goods that
were completed is updated in inventory. This quantity includes the quantity
of relevant co-products and by-products. If you're using work-in-process
(WIP) accounting, a ledger journal is generated to reduce the WIP accounts
and increase the inventory of the finished goods. When the cost of a
production order is calculated, the actual cost of the production is posted. If
the material and labor costs that are associated with a production aren't
already allocated in a journal or by preflushing, they can be automatically
allocated through back-flushing. Allocation through back-flushing involves
the post-deducting of inventory transaction processes. If the production
order is completed, select the End job check box to change the remaining
status to Ended. Otherwise, leave the field empty to enable reporting of
additional quantities that are produced.

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9. Quality assessment – A product receipt can trigger the creation of quality

orders, depending on the configuration of test processes and the quality
rules that are established for specific products. Because a quality order can
update the inventory status or the batch attributes of the tested products,
quality assessment is a mandatory process in many industries.
10. Put away and Ship to order – After product receipt and quality
assessment, optional put-away work directs the received products to the
next point of consumption, to a finished goods warehouse, or to a shipment
zone if there are ship-to-order requirements.
11. Ended – Before production is ended, 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. This status prevents any additional costs from
being posted to a completed production order.
12. Period closure – Some cost accounting principles, such as periodic
average, back-flush costing, FIFO, or LIFO, require periodic activities to
close the inventory or financial period. Typically, the system tries to report
all material and resource consumption, and also corrections of inventory
and scrap, before the periods are closed. This reporting is typically done by
using inventory movement journals or adjustment journals. The goal is to
assess the economic performance of operating units per period. In some
cases, when long-running production orders are used that span the
financial reporting periods, production journals are used to report the
production progress and resource consumption by the end of the period.

When a production order is created, a request is initiated to start producing an item. The
production order contains information about what will be produced, the quantity to
produce, and the planned finish date. It also contains information about which materials
to consume and which process to follow to produce the item.

A production order passes through stages of the production life cycle. When an order is
created, it is assigned the status Created. When an order is finished, it is assigned the
status Ended. A parameter setting in each stage allows a user to configure each step.
The setting can be set up for a single user or for all users.

The production bill of material and the production route are the main entities of the
production order. They are copied to the production order based on the selected item
and quantity that are going to be produced. Before the production order is started, the
production bill of material and route can be edited.

A production order can be created in the following scenarios:

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 Created by master planning execution based on material demand.

 Created directly from a sales order line or when a higher-level production
order is created and estimated (pegged supply).
 Created manually.

Navigation Pane: Production control > Production orders > All production orders

Manual creation of Production order (Discrete manufacturing)

1. On action pane, click new production order.

2. Select the Finished product item number from drop down.

3. Select, site and warehouse.
4. Add Quantity to be produced.
5. Select BOM & Route if in case there are multiple versions of them.
6. Click on create.

7. Now the status is created (we can modify BOM, ROUTE, QTY, Delivery date at
status created).

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8. On Action pane under production order, we have all the option of production
order lifecycle.

9. Click on Estimate.

10. Click ok

Profit settings options are set up in cost groups that determine if you are going to
have the system create a selling price for the production order. In most cases, the
option of Standard is used, which indicates there will be no markup and your

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pricing is not based on a percentage of the cost.

11. Now the status changes to Estimated and the remain status is material
consumption.

Next is scheduling the operations to check the capacity available to process the
operation at cost center.
For this go to Schedule on Action Pane and click schedule operation

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Scheduling direction Specify the scheduling direction for the production order.

Scheduling date The date used for the Forward from scheduling date and Backward
from scheduling date scheduling directions. Scheduling is backward or forward from this
date.

Finite material Select this option if you want materials to be considered limited during
scheduling. If the materials are limited, the material's coverage for that time will be
considered. In other words, scheduling considers the futures dates that are calculated
for the items. Scheduling reserves raw materials and explodes the current production. If
scheduling occurs several times, only the first scheduling will run an explosion and
make reservations. If you make changes in the production BOM or route, the next
scheduling will run an explosion. The explosion assumes that the materials are needed
the same day. Because the production is not scheduled at the time of the master
schedule explosion, the current date is the best estimate of when the items will be
available. The explosion then checks whether the items are available. If the items are
available, fulfilling the production requirement is possible. If the items are not available
by the current date, a planned order will be generated and an offset selection made for
the planned order. If automatic firming is set for the planned order, the planned order
will be firmed automatically for purchase or production. The production status will
automatically change to the status specified in the Requested production status field in
the Coverage groups dialog box. If the option is cleared, the materials are always
considered as available. Therefore, scheduling does not consider whether the materials
are available at the time of requirement.

Keep production unit During operations scheduling, only resources that are assigned
to the selected production unit are used.

Keep warehouse from resource During operations scheduling, only resources that are
assigned to the selected input warehouse are used

Schedule references Select this option to schedule reference or sub-productions

based on the main production. The related sub-productions will be scheduled at the
same time as the main production, because the main production can't be started until
the related sub-productions are completed. Production order references can be viewed
in the Reference level field in the Production orders page.

Synchronize references Select this option to schedule reference productions based on

the selected production's start and end times. You can select this option only if the
Schedule references option is also selected.

12. Now the order status is scheduled, and we need to release the order.
Go to Production order in Action pane and click release

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Here we can choose if we want to print job card or route card and also, we play
with the Qty and operation number.

Print setup and view can be defined in parameter while doing configuration.

13. Now we need to start the production order

Go to production order in action pane and click on start

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Automatic route consumption Specify how the route automatic time

consumption is handled. The options are as follows: Route group dependent- A
journal with route consumption is generated according to the route group setting
on the operation. If automatic consumption of setup and process time and
automatic reporting of the finished quantity are selected for the attached route
group, a journal with route consumption is generated. Always- A journal with
route consumption is generated automatically regardless of settings. Never- No
route consumption journal is generated.

Post route card now Select to post the automatically generated route card
immediately.

Post picking list now Select to post automatically generated picking list journals
immediately.

Above mentioned setups will be discussed in next article and there uses.

14. Once the order is started, we can check the related journals

go to action pane and click on view

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Now remaining status is posting of routes that means material is now consumed.

We will do report as finished to complete the operation and post the good quantity.

Good quantity Enter the number of good items to report as finished for the batch order.
For catch weight items, you also enter the actual weight of the good items. This field is
updated when you register the batch order.

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From Oper. No. Select the first operation number to report as finished. If this field is
blank and the To Oper. No. field has a value, all previous operations are included.

To Oper. No. Select the last operation number to report as finished. If this field is blank
and the From Oper. No. field has a value, all previous operations are also included.

Report production as finished Select this option to report the batch order as finished.
If the From Oper. No and To Oper. No. fields are blank, this option is selected by
default.

Automatic route consumption Select how route time consumption is handled. Time
consumption is recorded when you post to the ledger. The following options are
available: Route group dependent (the consumption is entered according to the route
group operation settings for the route; if consumption of setup time and process time,
and automatic reporting of the finished quantity are selected for the attached route
group, the consumption is entered by default), Always (the consumption is entered
regardless of the settings), and Never (the production is reported as finished or
manually recorded through the route card journal or job card journal).

End-mark route Select this option to create the route card journal with the operations
marked as completed. The route card journal is created regardless of the automatic
route consumption setting.

Picking list Select the journal to record material consumption.

Automatic BOM consumption Select an option to enable automatic consumption. The

program then posts the picking list for the consumer materials. The following options are
available: Flushing principle (register consumption according to the setting of the
flushing principle field on the formula line), Always (always register consumption), and
Never (do not register consumption).

End-mark picking list Select this option to create the picking list journal with lines that
are end-marked. When you select this option, no additional material consumption is
expected to be posted for the batch order.

Report as finished Select the journal to report items as finished. The finished item that
is added to the inventory is posted through the journal.

End job Select this option if the batch order is an end job, and no additional reporting
as finished is expected for production. If you select this option, excess transactions that
have a status of either On order or Ordered will be deleted. The status of the batch
order changes to Reported as finished, and you cannot cost-estimate, schedule,
release, or start the batch order.

Accept error Select this option to program-check the updated data and warn of any
inconsistencies. If inconsistencies are found, an error log is displayed, and the report-
as-finished update is canceled. The finished quantity must be less than or equal to the
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quantity that is started for the batch order. The individual operations in the production
route must be reported as finished. Estimated raw materials consumption must be
delivered. The finished quantity for production must be equal to the finished quantity
that is reported for the last operation in the route. You can report more than the quantity
started.

15. Last step is to end the order

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