Stock Reservation for Production Plan
Stock reservation within a manufacturing plan is significant due to the fact that it sees to it that the needed raw materials and sub-assemblies are available to begin the manufacturing process. It also sees to it that the bought raw materials against the manufacturing plan are utilized solely for the corresponding manufacturing plan.
When the Production Plan is put through and stock reservation is activated in Stock Settings, the system updates stock reservation entries for raw materials needed on all related Work Orders automatically. The reservations hold the material back from being used up in unrelated transactions.
The reserved amounts get updated in the stock ledger and against every Work Order associated with the Production Plan. Any material transfer, if done, will cause the reservation to move from the source warehouse to the WIP warehouse accordingly.
Un reserving is possible by cancelling the Production Plan or unchecking the Reserve Stock flag in the associated Work Orders.
How it Works in ERPNext
The user activity diagram of the reservation of the production plan is given below.
The user needs to activate the checkbox "Enable Stock Reservation" in the stock options to utilize this functionality. Once activated, the checkbox "Reserve Stock" will be visible in the Production Plan.
If the 'Reserve Stock' checkbox is checked, the system will automatically generate a stock reservation record for the sub-assembly parts and raw materials provided that the stock is available.
If stock for the sub-assemblies or raw materials is not available, the user has to generate work orders for the sub-assemblies and create material requests (purchase) for the raw materials. After purchasing the raw materials through these material requests, they will be reserved automatically against the concerned production plan.
If raw materials are received in bulk or in parts over a period of time, the system just keeps tracking availability and reserves amounts step by step as stock becomes available.
The system also supports linking existing open work orders for sub-assemblies to the production plan directly for easier traceability and synchronized reservations.
The materials held back from the production plan will then be utilized for the work orders associated with that particular production plan. Reservations hold these materials back from being allocated or consumed by other unrelated work orders or transactions.
The stock reservation is automatically revised if the production plan is revised or cancelled. The users can also manually unreserve or modify quantities as required by accessing the stock reservation record that is associated with the production plan.