Work order

A Work Order is a document ordered by the shop floor of manufacturing from the Production Planner to make a certain amount of a specific Item.

The Work Order also helps prepare the needed material requirements (via Stock Entry) for the to-be-produced Item, according to its corresponding Bill of Materials.

Work Orders may be automatically created from the Production Plan based on confirmed Sales Orders to ensure coordinated production planning. They may also be manually generated in case an ad-hoc manufacturing run is required.

In order to view the list of Work Orders, access:

1. Prerequisites

Prior to creating and applying a Work Order, the following must be set up:

Bill Of Materials: Specify the final product's layout consisting of raw material, sub-assemblies, operations, scrap settings, and costing information.

Operation: Specify each manufacturing operation, such as default workstation and anticipated time.

Workstation: Categorize or production cells according to features like working hours, hourly rate of cost, capacity and calendar of company holidays to give them adequate scheduling and costing.

2. Workorder Creation

1. Click New on the Work Order list

2. Select the item that needs to be manufactured.

3. Edit the Item that you want to create. ERPNext reads the default Bill of Materials (BOM) linked with that Item automatically. In the case where there will be numerous BOMs, you will be allowed to choose any BOM.

4. Enter the production quantity to make. Only after determining this value will raw material Items be filled into the order. This is to ensure that material requirements are based on real production level.

5. If the chosen BOM includes Operations, these will be retrieved into the Work Order. You are able to inspect and edit information like Workstation, Operation Time, Batch Size, and Hourly Rate. See Section 3.2 for greater details regarding Operation settings and sequencing logic.

6. Fill in the Planned Start Date, which serves as an estimate of when production should commence. ERPNext uses this date for capacity planning and scheduling on Workstations, including recognition of holidays or shift timings if configured.

7. Use Multi Level BOM is selected by default. If this option is turned on, all sub assemblies' materials will be automatically planned and added. To plan and produce sub assemblies separately, clear this checkbox.

8. Four warehouse types are required for free moving inventory, which you will need to define.

• Source Warehouses: Identify the warehouse where raw materials are stocked. On the submission of a Work Order, ERPNext maintains stock in these warehouses.

• Work in Progress (WIP) Warehouse: This warehouse will store semi finished items when production begins. You can also assign a group warehouse to WIP inventory.

• Target Warehouse: Goods are shipped here after production is complete, available for storage or shipping.

• Scrap Warehouse: Utilize this warehouse in case the BOM creates scrap or by-products. The system rolls over these items to the respective warehouse during the appropriate stage of production.

  All the required items (raw materials) are all automatically pulled from the related BOM and loaded in the Required Items table. The table provides in-depth control, allowing you to change the Source Warehouse for a material when required. As you proceed with production, material consumption and transfer are tracked right from this table, providing you with clear visibility into consumption and inventory movement.

You can save a Work Order even if there are no entries in warehouse fields. ERPNext, however, has warehouse requirements at the time of submission—you have to specify Source, WIP, Target, and Scrap Warehouses (if any) to fulfill the order. Absent from these, the system will not allow the Work Order to be submitted.

Also, a Work Order can be created automatically not only manually but also from a Sales Order. Under a Sales Order trigger, ERPNext captures the item, quantity, and default BOM automatically, making the process of completing the production in less repetition of data entry.

Note: A valid BOM is necessary to continue with Work Order creation.

2.1 Additional Choices when Making a Work Order

Sales Order: When you create a Work Order based on a Sales Order, the system will get automatically the related sales information like the item that is to be manufactured. It is also possible to manually assign (link) an existing Sales Order to the Work Order. The linking guarantees that production is according to customer requirements, and the order status shall be reflected as the Work Order is being carried out.

Project: Associating a Project to a Work Order is helpful for situations like engineer-to-order manufacturing or intricate projects where you would like to monitor in-depth progress. This relationship enables you to track the manufacturing process, monitor expenses, and create reports that account for project schedules and manufacturing milestones.

Allow Alternative Item: In situations when certain manufacturing materials are not available (i.e., substituting plastic beads for plastic crystals), this feature enables you to choose an Alternative Item. Upon checking this checkbox, ERPNext provides a way for you to input an alternate material for production. This is handy in managing stock shortage or replacing alternate materials without halting the manufacturing process.

Skip Material Transfer to WIP Warehouse: Normally, a Stock Entry is created when raw materials are transferred to a Work In Progress (WIP) Warehouse. This move accounts for the consumption of raw materials in stock. But by checking the Skip Material Transfer to WIP Warehouse box, you avoid generating this stock entry. Here, raw materials are simply treated as consumed directly, and inventory updates are made easy.

Backflush Raw Materials From Work-in-Progress Warehouse If you turn on this checkbox, ERPNext creates a Stock Entry with the status Manufacture automatically. Such an operation implies the consumption of raw materials from the Source Warehouse, processing into finished goods, and shipping to the Target Warehouse. Backflushing assists in inventory consumption automation, as raw materials are properly debited from stock as the product flows into WIP or finished status.

3. Features

3.1 Time

The Planned Start Date and Expected Delivery Date may be entered here. The Planned Start Date takes the date and time of creation of the Work Order by default. These dates are essential in planning and scheduling production operations and assist the Production Planners in coordinating resource availability and shop floor activity.

The Expected Delivery Date may be manually set based on the customer requirements or on internal due dates or on related Sales Order. The date is important in Production Planning Reports and can cause notices or dependencies in other Projects.

3.2 Items Table Required

In this table, all the raw material items required to make the product of choice are listed. The information is pulled from the associated Bill of Materials (BOM), and every row is an item with expanded control fields. The Source Warehouse for an item can be altered manually here. The default Source Warehouse is retrieved either from the Item Master or set globally in Stock Settings.

Following are important fields in the Required Items table:

• Required Quantity: Based on the BOM and the production quantity defined in the Work Order, automatically calculated. It indicates the precise quantity of raw material required for producing the finished product.

• Transferred Quantity: After submitting the Work Order and starting the production, raw materials are transferred from the Source Warehouse to the Work In Progress (WIP) Warehouse. This field indicates the quantity physically moved to WIP. If checkbox Skip Material Transfer to WIP Warehouse is chosen, this field will not be modified, since no Stock Entry is created.

• Consumed Quantity: This figure is refreshed when the WIP warehouse materials are utilized during production, and the goods are finished and transferred to the Target Warehouse. It allows real raw material consumption monitoring.

• Allow Alternative Item: For every row, whenever raw materials are unavailable, checking this box allows the selection of an alternative item from the Item Alternative list. This is particularly handy in ensuring production continuity in case of material shortages.

• Skip Material Transfer: If you don't want to transfer certain raw material to the WIP Warehouse, check this checkbox. It omits the material from automatic transfer entries. You may still be able to utilize the item in the BOM and Work Order, but no stock movement entries will be created for it. This is generally utilized when certain materials are supplied directly at the workstation or are already present in the WIP area.

• After the Work Order is Saved, the below fields will also be filled based on actual stock levels available:

  • Available Qty at Source Warehouse: Shows the real stock available at the chosen source warehouse.
  • Available Qty at WIP Warehouse: Displays the present stock of the item in the Work In Progress warehouse.

These real-time inventory data enable the manufacturing team to make timely determinations of material readiness prior to or concurrent with manufacturing, eliminating delays due to stock unavailability.

3.2 Operations Table

The Operations table within the Work Order shows all of the manufacturing operations needed to make the chosen product. This information is typically retrieved from the Bill of Materials (BOM) if the BOM is set with operations, but these can be manually altered within the Work Order.

Material Transfer: Production materials can be transferred against the Work Order or against single Job Cards. This configuration is stored in the BOM under "Transfer Material Against". If it is not changed, it is inherited automatically.

When a BOM is selected:

• In the Operations table, the following are retrieved:

• Operation: The operation type to be carried out (e.g., Cutting, Assembling).
• Workstation: The station or location where the operation will be performed.
• Operation Time: Time allotted per operation, in minutes.
• Hourly Rate: Assigned at the Workstation level and utilized to calculate operating costs.

In the Items table, the system will automatically allocate:

• Item-wise Operations: Which operation(s) will be performed on each item.

These can be edited after selection if there is a need for customization during production planning.

Upon saving the Work Order, the fields below are made visible and auto-populated based on Job Cards:

• Completed Qty: Quantity of units for which the operation has been completed.

• Status: Shows real-time progress of the operation. Statuses are:

• Pending: Operation has not been initiated.

• Work In Progress: Operation is in progress.
• Finished: Operation is performed for the planned quantity.
• Operation Time: Originally retrieved from the BOM, but editable per operation according to production planning.
• Planned Operating Cost: It is obtained as follows:

Operation Time x Batch Rate x Amount Divided Batch Size

The system will also be automatically updated like this:

• Real Operation Time
• Real Operation Cost
• Actual Start Time
• Real End Time

These values allow effective comparison of the planned and the actual performance and variance analysis of time / costs.

3.3 Operation Cost

The Operation Cost field in a Work Order provides an overview of the cost structure on the basis of operations and actual performance from the floor.

The following fields are shown and updated based on BOM configuration and Job Card execution

• Planned Operating Cost: Retrieved from the BOM by using the operation time and hourly rate specified for every operation. It provides an initial impression of the cost to be incurred prior to actual production.

• Actual Operating Cost: Automatically calculated as per Job Card activity. This represents the actual cost incurred during making the item, taking into account any delay or any change in efficiency.

• Additional Operating Cost: Field for free entry of any other, unforeseen, or overhead expenses borne during production (e.g., third-party processing charges, utility surges, temporary labor).

• Total Operating Cost: Calculated field as:

Total Operating Cost = Actual Operating Cost + Additional Operating Cost

These cost-related fields aid in finding and balancing the gap between estimated and actual cost of manufacture, enabling appropriate product pricing and margin analysis.

3.4 Information on item and references to sources

At the upper section of the Work Order form, the Item Description and the Stock UOM (Unit of Measurement) are automatically shown of the item being produced. Their values can be taken off the Item Master and provide information regarding which product is being produced and also the unit in which it is produced (e.g. Nos., Kg, Liters).

If the Work Order was created from a Material Request (as is typically the case where material planning is being accomplished via a Production Plan or Sales Order), the link to the underlying Material Request will be found here. The traceability of procurement planning to subsequent manufacturing execution is enabled by this relationship.

3.5 Transferring Materials for Manufacturing

Once a Work Order is submitted, the next action is to transfer raw material from the Source Warehouse to the Work-in-Progress (WIP) Warehouse for beginning the manufacturing process. This transfer is recognized as a Stock Entry of the type Material Transfer for Manufacture.

Step-by-Step Process:

1. Click 'Start' This results in the creation of Job Cards for each operation included in the Work Order. Job Cards are necessary to track shop floor execution and operation-wise progress.

2. Create Material Transfer When the Work Order is initiated, a button to Transfer Materials will be visible. It may not be clicked to create a new Stock Entry where:

   • All raw materials required are automatically retrieved from the Work Order.
   • Quantities are stocked relative to what has not yet been shipped.

3. Material Transfer Quantity You can limit how much raw material is shipped in each shipment. This is convenient in partial production runs or when working with limited WIP space.

4. Use Multi-Level BOM If the **Use Multi-Level BOM box was ticked in the Work Order, the system will explode sub-assemblies into their raw materials below as part of material transfer. If not checked, sub-assemblies are transferred as-is.

5. Submit the Stock Entry Upon checking the material quantities and source/destination warehouses, submit the Stock Entry. This process:

Moves bulk earth materially. Transferred Quantity on Work Order field relates to each other.

This gives proper movement of inventory and real time display of raw material in the shop floor.

3.6 Material transfer by means of stock entry (manual flow)

There are manufacturing settings in which there is a separation between the processes of Work Order execution and material transfer, or they are controlled by other personnel (e.g., storekeeper vs. production supervisor). In these cases, ERPNext supports a manual material transfer workflow.

Use Cases:

• Bulk transfer of raw materials which are not work order-specific.
• Material handling responsibilities are delegated to a user aside from production tracking.
• Particular manufacturing streams where rigorous integration between Work Order and inventory is not essential.

How to Use:

1. On the Work Order, check the checkbox 'Skip Material Transfer'.

   • This deactivates the automatic requirement for creating a Material Transfer for Manufacture record.
   • It is particularly helpful when everything is already at the WIP Warehouse or is brought manually in advance.

2. When production is ready to finish, click on the 'Finish' button.

   • This makes a Stock Entry of type Manufacture directly.
   • It is assumed that raw materials are already available, and only the production output (finished goods) is accounted for.

This strategy allows for customized workflows, particularly in low-complexity or manually controlled shop floor setups.

3.7 Job Card Creation

Job Cards are utilized to track actual work progress, time taken, and operation status on the shop floor. They are required for monitoring execution accuracy, labor utilization, and cost control.

Working of Job Cards in ERPNext:

1. Automated Draft Generation When a Work Order is presented, draft Job Cards are automatically created from the operations within the related Bill of Materials (BOM). One Job Card for each operation is created, which can then be edited, begun, suspended, or completed.

2. Creating Additional Job Cards If additional Job Cards are required—e.g., for individual batches or work shifts—you can make them manually. To do this, navigate to the Work Order Dashboard and click on the plus (+) icon beside the "Job Card" link.

3. Manual Flexibility Each Job Card can be allocated to a particular Employee, Workstation, and Planned Start/End Time. This provides in-depth tracking of each phase of manufacturing.

4. Operations Update When Job Cards are finished, their progress updates the status of the related operation within the Work Order. Time logs and actual times entered here also feed into operation costing. For deeper usage and tracking functionality, ERPNext offers a specific Job Card module within the Manufacturing category.

3.8 Finished Goods Update

After production is finished (either fully or partially), you will need to record the output of finished goods. It is accomplished by updating the Work Order to shift produced items out of the Work-in-Progress (WIP) Warehouse and into the Target Warehouse that contains finished goods.

Updating Finished Goods Steps:

1. Click 'Finish' on Work Order It signifies manufacturing completion for a batch or the total Work Order quantity.

2. Enter Quantity Produced You can partially or completely finish the Work Order. ERPNext allows batch-wise manufacturing, so you can finish and stock step by step by indicating the precise quantity being manufactured in every run.

3. Stock Entry Creation Pressing 'Finish' will create an **automatic Stock Entry of type 'Manufacture' with the following effect:

   • Subtracts the raw materials and sub-assemblies from the WIP Warehouse
   • Adds the finished goods to the Target Warehouse

4. Auto Consumption (Backflush) If Backflush Raw Materials from WIP Warehouse was selected during the Work Order creation, the system will automatically backflush the correct raw materials according to the BOM—no manual postings required.

5. Partial Completion Flexibility Having the option to partially update finished goods is especially helpful when:

   • Production is done in small batches
   • There is limited WIP storage
   • Quality checks need to be done prior to stocking the whole quantity

This process guarantees that the inventory system represents current updates for raw material usage and availability of finished goods.

3.9 Work Order Capacity Planning

ERPNext offers capacity planning in working on the Work Order if the Work Order has a defined list of operations to which ERPNext will automatically schedule based on the Planned Start Date and the Workstation availability.

How Capacity Planning Works:

1. Automatic Scheduling on Submission At submission, the Work Order is scheduled for every operation sequentially according to:

   • The Planned Start Date that has been entered in the Work Order.
   • The availability and schedules of every associated Workstation.
   • The Holiday List and the pre-books on the Workstation.

2. Generation of Time Logs (Drafts) For every operation, the system creates draft Time Logs based on planned time slots. These logs are stored but not automatically submitted to allow users to modify or review them subsequently.

3. Slot Reservation and Operation Sequencing The system guarantees that no two operations are scheduled for the same Workstation at overlapping times. It makes time slots serial bookings, i.e., one operation is scheduled after the completion of the earlier one except in cases where parallel operations are set up in the BOM.

4. Scheduling Window In Manufacturing Settings, you may define the number of days the system needs to look ahead while trying to locate slots for scheduling. It defaults to 30 days. You can modify this value higher or lower depending on your manufacturing environment.

5. Handling Capacity Conflicts If an operation takes longer than the Workstation schedule can accommodate (e.g., because of earlier bookings or shift limitations), ERPNext will ask the user to do one of the following:

   • Split the operation, or
   • Reschedule it manually to another time.

This planning saves wastage of resources and avoids scheduling conflicts on the shop floor.

4.0 Stopping a Work Order

There may be cases in which a Work Order has to be halted—due to quality issues, raw material supply, equipment breakdown, or cancellation of a customer order.

Cancelling a Work Order:

1. Before the stoppage of raw materials, an inspection should be done. Make sure that all raw materials transferred to the Work In Progress (WIP) Warehouse were either:

   • Consumed in manufacture, or
   • Went back to Source Warehouse.
   • Notice: In case the raw material remains in the WIP Warehouse, ERPNext will not allow you to halting the Work Order. Trying to stop it too early will raise a validation error.

2. Stopping the Work Order After raw materials are returned or utilized:

   • Press the 'Stop' button in the Work Order form.
   • The Work Order status will be changed to Stopped, meaning the production processes have been officially halted.

3. Reopening a Work Order A stopped Work Order may be reopened if required. To reopen it:

   • Click the 'Reopen' button on the same Work Order.
   • This rolls back the status to In Progress, thus allowing you to resume the production.

Suspending and reinstating Work Orders is especially useful for managing surprise disruptions or rescheduling within the production stream.

4.1 Revert Non Consumed Materials to the Stores from WIP Warehouse

If you have routed extra or surplus raw materials to the Work In Progress (WIP) Warehouse and upon completion of the Work Order such materials are not utilized, ERPNext enables you to revert the unused materials back to the original (Store) warehouse so that your inventory levels remain accurate.

To do this, go to the concerned Work Order and click on the "Return Components" button. This will create a Stock Entry of type "Material Transfer for Manufacture", but in reverse direction — i.e., from the WIP Warehouse to the original source warehouse.

The system only returns unconsumed quantities of material. In case partial quantities were used up from the batch that was transferred, only the balance remaining will be shifted back. This assists in the prevention of wastage and enhances accountability of raw materials throughout production stages.

Note: The Return Components option only appears once the Work Order is finalized or when there's excess quantity found in the WIP Warehouse.

Return Components

The moment this return stock entry is submitted, inventory will be updated in the source warehouse accordingly. This also assists in improved monitoring of material efficiency and reduced material holding cost in the WIP warehouse.

To track and check returned quantities, utilize the Work Order Consumed Materials report. This report shows all materials issued, consumed, and returned against each Work Order, providing an overall view of material movement and consumption accuracy.

5. Related Topics

• Job Card
• Pick List

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