Stock Reservation for Work Order
Note: This feature is supported in ERPNext version 16.
Stock reservation for a work order is necessary since it makes sure that the materials are reserved so that the manufacturing process starts and delivers finished goods.
It also assists in better inventory management and timely completion of orders to customers. In ERPNext version v16, reserved quantity is blocked for the chosen Work Order and displayed in the "Reserved Qty" field in Stock Ledger Report as well as Stock Balance. The reservation restricts manual usage or movement in other Work Orders or Sales Orders unless the reservation is forcibly deleted.
How it Works in ERPNext
The user has to activate the checkbox "Enable Stock Reservation" in the stock configuration to utilize this functionality. Once activated, the checkbox "Reserve Stock" will be visible in the work order.
When the "Reserve Stock" checkbox is marked, the system will automatically create a stock reservation entry against the source warehouse for the available stock when the work order is submitted.
The reserved stock is only usable for the corresponding work order and cannot be used in other transactions. The user can unreserve the reservation by deselecting the "Reserve Stock" checkbox and saving the Work Order once again. Furthermore, if the Work Order is being canceled, the reservation is also automatically unreserved. Batch numbers and serial numbers (if used) are also followed while reserving.
Unreserve Stock
If the stock reserved must be allocated to a different work order, unreserve it from the current work order and allocate it to the work order that does not have stock reserved.
Unreserved can be achieved by deselecting the "Reserve Stock" box in the corresponding Work Order and saving it. The system will automatically delete the Stock Reservation record, freeing the inventory to available stock. In case partial materials have already been delivered to WIP, only the balance will be unreserved.
Reservation for WIP
Once the user moves the materials from the source warehouse to WIP warehouse by a stock entry with type "Material Transfer for Manufacture", the system unreserve the stock from the source warehouse and reserves it against the WIP warehouse.
This transfer makes it traceable and avoids duplicate reservation. The reserved quantities move from the source warehouse to WIP, displayed in the Reserved Qty column for WIP warehouse in stock reports.
Finished Goods Reservation
Where the sales order is associated with the work order, the system reserves finished goods against the concerned sales order on work order completion.
The reservation is used to guarantee that the completed products are booked exclusively into a given sales order, so that they cannot be utilized in other deliveries. This is very applicable in make-to-order processes. The connection is sustained in the "Reserved for Sales Order" field in stock ledger and delivery planning tools.