Production Plan
A Production Plan assists in scheduling both production and material planning of products that are to be manufactured. This aligns production effectively with real demand.
The plan may be on the basis of:
- Sales Orders (for customer orders)
- Material Requests (for internal stock requirements)
By producing a Production Plan, you can:
- Schedule manufacturing work on several finished goods
- Consolidate demand for several Sales Orders or Material Requests
- Automatically determine the raw materials needed
- Automate material procurement according to production needs
The system will help in the determination of how much of each raw material is required according to the Bill of Materials (BOM) of the finished products to be produced.
The production plan simplifies the production process by aggregating demand and assisting in:
- Shortening lead time
- Preventing shortages of materials
- Keeping stock levels accurate
To enter the list of Production Plans, go to:
1. Prerequisites
It is recommended before you make and utilize a Production Plan that you first make the following:
Item: The raw material or finished item that will be utilized in manufacturing or must be planned for.
Material Request: Requests within the company that define the materials that need to be replenished to stock or for particular jobs.
Sales Order: Customer orders that assist in determining what products must be made.
Bill of Material: Identifies the raw materials and operations required to produce a given Item.
Routing: A group of operations or set of steps necessary to produce the Item, which needs to be established and associated with the BOM.
2. How to Create a Production Plan
As mentioned earlier, a Production Plan can be used for planning the manufacture of Items against Sales Orders or Material Requests.
The common steps are:
Go to the Production Plan list, click on New.
Select whether to get items from a Sales Order or a Material Request: This will decide how the system will pull the items to be produced. It will automatically bring in the necessary finished goods and determine raw material requirements based on associated BOMs.
- A Production Plan can also be manually created, where you have the ability to directly pick the Items to be produced without being associated with a Sales Order or Material Request. Date, and **Delivery Date, which enable you to retrieve the Sales Orders to be included in production planning. You don't necessarily have to use all the filters if you have few Sales Orders in a given time period.
Production Against Sales Orders
Choose Sales Order from the 'Get Items From' drop-down menu.
The system will display a group of filters like Customer, Sales Order, Sales Order Date, and Delivery Date, which enable you to retrieve the Sales Orders to be included in production planning.
You don't necessarily have to use all the filters if you have few Sales Orders in a given time period.
Production Plan fetch items
Click on Get Sales Orders to retrieve all matching Sales Orders based on the applied filters. The system will then present these Sales Orders in a dialog with information such as Sales Order number, Customer, Delivery Date, Item, and Pending Quantity. You can then choose one or more Sales Orders to be included in the Production Plan from the list. This step is to make sure that only open and applicable Sales Orders are included for manufacturing planning. The system checks whether each Sales Order contains Items which are stock items and possess a valid, submitted and active Bill of Materials (BOM). Only such Items shall be taken into consideration for the next step.
Sales Order Filters
The filter dialog consists of the following fields to restrict the Sales Orders:
- Customer: Choose a customer to retrieve Sales Orders from that customer.
- Sales Order: Manually choose a particular Sales Order.
- Sales Order Date: Filter by Sales Order creation date.
- Delivery Date: Filter by the promised delivery date of items in the Sales Order.
- Project (optional): If you are tracking production by projects, you can use this filter to collect related Sales Orders.
You can apply any mix of the above filters. The more filters used, the more specific your selection will be when retrieving Sales Orders.
Get Items for Work Order
Click on Get Items for Work Order to retrieve Items from the chosen Sales Orders into the Production Plan. The system will only include Items that have an associated submitted and active BOM. Items without a valid BOM will be automatically eliminated from the plan, only including manufacturable Items.
Get items for Production Plan
The Items to Manufacture table will now fill with valid Items retrieved from the chosen Sales Orders. Each row is one distinctive Item to produce, along with the quantity needed.
When you expand a row, you can see the checkbox 'Include Exploded Items'. If checked, the system will also add all child-level raw materials of the multi-level BOM for any sub-assembly items associated with the finished product.
Get items Combined for Production Plan
If the "Consolidate Items" check box is selected and the Production Plan is saved:
Items on multiple Sales Orders having the same Item Code and BOM will be combined together into a single row. The Planned Quantity of the row will capture the cumulative total of quantities needed of all combined Sales Orders.
This minimizes duplication in planning and streamlines the overall generation of work orders.
2.2 Production Against Material Requests
Select the option Material Request in the drop-down list of Get Items From. The system will display a series of filters to allow you to find the appropriate Material Requests to be scheduled in production. These filters help you in streamlining the internal material requirements into orders that will make them manufactured.
Material Request Filters: When choosing the Material Request filter, the following selection filters are offered:
- Material Request: Choose a particular Material Request manually.
- Material Request Date: Filter by date of creation of the Material Request.
- Company: Filter by company if you have a multi-company setup.
- Material Request Type: Filter by type (should be 'Manufacture').
- Project (optional): If production is associated with a project, use this to filter requests by project.
- Requested For (optional): Filter by the Warehouse that the items are required in.
These filters assist in finding valid Material Requests of type "Manufacture", which are created to reflect the internal requirement for finished goods to be manufactured.
Material Requests
Click Get Material Request to display the Material Requests that fit the filters undertaken. The filtered list of Material Requests will then be displayed which contains key information like:
- Material Request Number
- Item Code
- Quantity Requested
- Requested Date
- Warehouse
You can then choose one or more Material Requests from this list. Only Items that are stock items and have a valid, submitted Bill of Materials (BOM) will be added to production planning. If a BOM is absent or not submitted for an Item, it will be skipped automatically.
Material Request Item
Click on Get Items for Work Order to retrieve all the Items from the chosen Material Requests into the Items to Manufacture table in the Production Plan.
There will be one line in the table for each and every line:
- Item Code
- Requested Quantity
- Required By Date
- Warehouse
- BOM Used
After listing the Items, you can expand each row to check or make changes in the corresponding BOM. If there are sub-assemblies, you can have an option 'Include Exploded Items', which will explode the sub-assembly in terms of raw materials depending on the multi-level structure of BOM.
If "Consolidate Items" is checked and the plan is being saved, the system will consolidate the same items (same Item Code and BOM) from different requests into one line, and the total required quantity.
This provides improved planning for resources and eliminates redundancy of production work for the same Item on multiple Material Requests.
2.3 Material Request Planning
Invoking the 'Get Raw Materials for Production' button will retrieve all needed raw material Items depending on the chosen Items to Manufacture in the Production Plan.
The system computes the raw material shortfall quantity after verifying the amount of available stock in the given source warehouse. For instance, to produce 200 plastic canes, if the Bill of Materials for the production is 100 plastic Nos but only 20 Nos are found in the source warehouse, it will automatically determine the shortfall and show 80 Nos in the Required Quantity column of the Material Request Plan table.
Material Request Plan
The Material Request Plan table is filled with all raw materials that are deficient for the planned production. All rows in this table indicate:
- Item Code
- Description
- Required Quantity
- Available Quantity
- Warehouse
- UOM
- Required By Date
- Reference to Production Item
This table assists the user in determining shortages and planning procurement accordingly. It also allows the generation of Material Requests directly from the Production Plan for the raw materials included here.
Use the following checkboxes to initiate certain actions:
Include Non Stock Items: Check this box to allow planning of non-stock items. These are the products, in which the Maintain Stock option is disabled in the Item Master. This will enable the planning of even services, consumables or indirect materials in the production, especially when the services are needed yet not stocked.
Include Subcontracted Items: Selecting this checkbox adds the raw materials of thesubcontracted Item to the planning. This is useful in case 'Include Exploded Items' is not selected, yet there is a need to include the raw materials of subcontracted parts which will be treated externally. This ensures that all the input materials such as those treated internally as well as externally are applicable in the Material Request Plan.
Ignore Existing Projected Quantity:
If this checkbox is active, the system will generate a Material Request regardless of whether the needed raw materials have already been ordered, requested, or included in active Project Quantity (i.e., quantity on Purchase Orders or other outstanding Material Requests).
For instance, suppose you require 100 units of raw material (e.g., Item A), and you already have 150 units in the stock or in the form of incoming stock (from Projected Quantity), the system would under normal circumstances not generate a Material Request. But if you turn on this setting, the system will generate a new request for 100 units, disregarding what's already on hand or ordered.
This comes in handy when the user wishes to circumvent present stock forecasts and make requests based on pure production planning requirements.
- For Warehouse:
This option enables the user to identify the Warehouse from which the raw materials must be issued during production. When making Stock Entries or Material Requests, the system will use this warehouse to check availability and process the transactions.
If the 'For Warehouse' field is blank, the system can either ask the user to pick a warehouse at the time of generating the Material Request or use the default warehouse which has been set at the Item level or in Stock Settings.
This assists users in making better procurement decisions and monitoring material availability from various warehouses if required.
2.4 After Submitting
After the Production Plan is submitted, the system enables key downstream manufacturing functions to move from planning to actual execution.
Following submission, the following operations become accessible:
Make Work Orders: Individual or batch Work Orders can be created based on each item in the table of "Items to Manufacture". By clicking the button of creating the work orders, specific documents will be automatically created and linked with the Production Plan. Production scheduling is therefore automated and traceability to the plan is attained.
Make Material Requests: The system can also generate automatically the raw materials described in the table of Material Request Plan Material Requests. Such Material Requests will arrange raw materials to be ordered or transferred in advance so that a free production may be possible without the shortage of raw materials at the same time. You may construct or create:
Material Requests for Purchase (for raw materials procured outside),
- Transfer (between warehouses),
or Make (in case raw materials themselves must be made internally).
Track and Review: Once Work Orders and Material Requests have been created, the reference to these documents can be tracked easily right in the Production Plan. Activity outputs generated or booked are updated with regard to actual progress against plan.
Status Management: The user will then be able to manually change the status of the Production Plan to Closed once all or some items are resolved and they are no longer to be processed anymore.
Tip: You can reopen a previously closed Production Plan at a later time should there be a shift in production priorities or other requirements are needed.
2.4.1 Closing a Production Plan
In other instances, a Production Plan may not be entirely executed because of changing demand, lack of materials, or management decisions. Closing the Production Plan prevents unnecessary Work Order or Material Request creation. This functionality provides greater production control and data reliability.
Common scenarios for closing a Production Plan are:
Independent Production Completion: Certain items in the Production Plan could already have prior production already completed within other Work orders that are not linked to the plan.
Manufacturing Priority Shift: Due to a change in sales forecasts and capacity availability shortages or stock changes, management may opt to exclude some items in the Production Plan.
Partial Compliance: Only a small part of the products to be manufactured is completed and the other either stopped to be accepted any more or permanently placed on deferral.
To close a Production Plan, select the "Close" button. After closure:
- The plan is read-only for most fields.
- The system will no longer accept creation of further Work Orders or Material Requests against the closed plan.
- Linked documents are still available for reference.
If things change, and additional production must be ongoing, the Production Plan can be reopened with the help of the "Reopen" button, again in full functioning mode.
2.5 Creating Work Order for the Sub-Assembly Items
In production situations where a finished product is made up of sub-assemblies, you might need to generate Work Orders for those sub-assemblies before the final assembly. ERPNext makes this possible through the "Make Work Order for Sub Assembly Items" option in the Production Plan.
In the following use case example, the User creates Work Orders for 'Shaving Brush Bristles' (a sub-assembly part), and only then creates the Work Order for the finished final product — the Shaving Brush.
This guarantees that all parts that are required to be manufactured are done so in sequence and are ready before actual finishing work is initiated.
Enabling the Feature
For creating Work Orders for sub-assembly items:
- Go to the Production Plan and locate your main finished product (e.g., Shaving Brush) on the Item to Manufacture.
- In the item line, ensure that the check box, Make Work Order for Sub Assembly Items is checked.
- This will instruct ERPNext to automatically and recursively create work orders of any sub-assembly part as listed in the parts Bill of Materials (BOM).
Generating the Work Orders
After the checkbox is selected:
- Click the button labeled, "Make Work Order"
- Which means that ERPNext will automatically generate Work Orders not only of the finished good item (Shaving Brush) but also the sub assemblies (Shaving brush Bristles, etc.) referenced in the its outer BOM.
Every Work Order generated will:
- Be referenced to the Production Plan, ensuring traceability.
- Possess its own routing, operations, raw material planning, and job cards (if applicable).
- Make dependencies transparent — Work Order of the end product is contingent on fulfillment of sub-assembly Work Orders.
This organized procedure facilitates improved material flow planning, operation sequencing, and visibility in multi-level manufacturing processes.
