The Production module is aimed at addressing the needs of the production process. The production process covers the steps through which components and raw materials are transformed into a finished good.
This is a beginner's guide to getting started with these recently released features. Please follow the links in each section for detailed explanations of each new feature. The goals of the new Production module features are:
- implementing demand-driven manufacturing which provides the benefits for inventory management and timely manufacturing orders execution
- organising a smooth production process capable of timely delivery of finished goods
- components planning for the production process
- resources capacity planning for the production process
- scheduling the production process steps for control and timely execution.
For simpler, single-step operations (e.g. assembling T-shirts into a multipack, assembling items into a gift box), users can use the simpler Assembly and Disassembly features. The difference between Production BOM and Assembly BOM is that Assembly involves only one operation and Production involves many operations. Assembly/disassembly also do not take into account resource capacity and component lead times.
Table of Contents
- Set up the Factory Calendar
- Define Shop floor locations
- Set up the Logistics Path
- Create Work Centers
- Connect Shop floor bins to Work Centers
- Set up Production Resources
- Create a Production BOM
- Customise Production Process Settings
- Map a Work in Progress account
- Create Production Orders
- Capacity Planner
- Production Reports
- What next? Advanced Production Features
The Factory Calendar defines the working days and working hours for the planning period. The calendar can then be used to ensure accurate capacity planning and scheduling. Production module features will not work if the Factory Calendar is not configured.
The Factory Calendar can be set up in the Production module settings: Main Menu → Production → Settings → Set up Calendar.
Configuring the Factory Calendar defines:
- default operational hours and working days
- holidays/days off
- custom working hours.
Define Shop floor locations
Shop floor locations specify where finished goods are produced. Defining a Location as a Shop floor enables the location to be selected as a Shop floor location in a Logistics Path and used in Production Orders.
Go to Settings → Reference Books → Locations and Bins to define Shop floor locations for your business.
Set up the Logistics Path
Every object in DEAR Inventory has a location.
- Products specify a Warehouse location where the components for production are stored.
- Sale Orders specify a Sale location where the product is sold.
- Production orders specify a Production warehouse location (Shop floor) where finished goods are produced.
As in real life, a product cannot be in two places simultaneously and cannot be transferred between locations at the click of the mouse. The physical movement of stock requires actions to be triggered, as well as time – logistics paths are set up to reflect that.
A logistics path connects the storage, production and retail locations in the system (they can be the same location). This is used to factor in the lead time for components for accurate ordering and production scheduling. It also enables automatic generation of documents (purchase orders, transfer orders, etc.) and logs stock movements.
Logistics Paths are configured from the Settings → Reference Books → Locations and Bins → Logistics Paths page.
Create Work Centres
Work Centres define the area where a production operation takes place within the business (for example, a specific workshop, room or section of the shop floor). All components for a production operation should be delivered to the work centre in order for the production operation to begin picking.
Work Centre can be set up in the Settings of the Production module: Main Menu → Production → Settings → Work Centre.
Connect Shop floor bins to Work Centres
Bins are used to specify where the stock is stored within a location. For a production work centre, bins define where the components should be brought in order to start a production operation. For example, a sewing work centre would require fabric to be brought to the assigned bin.
The same Work Centre can be reused across multiple Shop floor locations. E.g., WC-02 Sewing Machines can exist in more than one production location. A bin can be assigned for each shop floor location.
Go to Settings → Reference Books → Locations → Bins and select the Shop Floor location from the drop-down list to start connecting bins.
Set up Production Resources
Finished goods production is made possible with resources, e.g. tools, machines and people. For many businesses, resource capacity is the constraint when planning production runs.
Each resource has its capacity, which measures the capability of the resource to produce some amount of finished good. Knowing the capacity of the resource, it is possible to calculate how much time and when it is required to produce this or that finished good. Thus, adding resource and calculation of its capacity defines the timelines for the production.
Resources for production can be set up from the Production Settings: Main Menu → Production → Settings → Resources. You will need to create Services for your resources in order to assign costs – please see the Resources article for step-by-step instructions.
Create a Production BOM
Production Orders can only be planned for items that have a Production Bill of Materials. The Production BOM defines each step of a production operation, its duration, and the components and resources required to complete each step.
A Production BOM is an essential feature for resource capacity planning and correctly scheduling production operations.
See Production BOM for detailed instructions and examples of this feature in action.
Customise Production Process Settings
Parts of the production process can be set to either manual or automatic. This can be configured in Settings → General Settings → Production Process Customisation.
Stock Transfer is Manual/Automatic
- Automatic: When a Production Order is released, Transfer Orders from the connected warehouse (see Logistics Path) to the Production Order location are automatically created for components. Transfer Orders are created with status Ordered and must be completed manually by the user when stock is received.
- Manual: The user must manually create and complete Transfer Orders for the out-of-stock components.
NOTE: Purchase orders will be automatically created only when the supplier is indicated for this component in the product (Inventory → Product → Suppliers tab). See Adding suppliers to a product for more information.
Purchase Order Replenishment is Manual/Automatic
- Automatic: When a Production Order is released with an out-of-stock component, a Purchase Order is generated for the component with delivery to the connected warehouse. Purchase Orders are created with status Ordered and must be completed manually by the user when stock is received.
- Manual: The user must manually create and complete Purchase Orders for the out-of-stock components.
Create Production Order
- Via Smart Reordering: Production Order is not created automatically when Sales Order is authorised. Production Order can be created manually using the Reorder Suggestions page.
- NOTE: Releasing a Production Order created in this way with nested semi-finished components automatically creates Production Orders/Assembly Orders for the semi-finished components with status Released.
- When Order is authorised: Production Order and orders for semi-finished components are created when a Sales Order for a finished good is authorised and backordered. Choosing this setting makes two more settings appear (described next).
- NOTE: Releasing a Production Order created in this way with nested semi-finished Production components automatically creates Production Orders with the same status as the top-level ordere. Assembly Orders will not be generated for semi-finished components with Assembly BOM – these must be raised manually.
Set Order status to
If Create Production Order is set to When order is authorised, this setting will be visible. Created Production Orders can have the status:
- Draft – the user must manually Authorise and Release the Production Order.
- Planned – resource capacity is planned and allocated (see Capacity Planner). The user must manually Release the Production Order.
- Released – resource capacity is planned and allocated, and stock components are allocated. The Production Order will be added to the Scheduler.
On Order Release produce
This setting defines the quantity that should be produced in the Production Order. This setting will be applied when the Production Order is released (setting is not applied for Draft or Planned orders). There are three options:
- Produce Quantity required: Production Order quantity is the same as Sales Order quantity. No other product availability or settings are taken into account.
- Produce Quantity required and maintain minimum stock level quantity: Production Order quantity is calculated as: Sales Order quantity - (Minimum Before Reorder + Reorder Quantity + On Order - Available). Even if Availability is negative, it is considered in the formula and added to the quantity to produce.
- NOTE: When retail location is different than Shopfloor location Minimum before reorder and reorder quantity to be used for calculating Quantity to Produce will be taken from Retail Location and Not Shopfloor location.
- Produce Difference between available quantity and quantity required to cover a shortage: Production Order quantity is calculated as: Available - On Order - Quantity in Sales Order.
NOTE: Availability is calculated from:
1. The Reorder level set up for the product at the Shop floor location.
In case if Reorder level is not set up, then Minimum Before Reorder and Reorder Quantity set up in the product document header are considered. See Low Stock Reorder for more information on Reorder levels.
2. The Minimum Before Reorder specified for set up in General Settings → Purchase process customisation.
In case if this setting is set to Every location, then Availability is calculated (summed) for all locations. If this setting is set to Product, then Availability is calculated (summed) for Shop Floor and Retail locations only.
3. Component availability is re-checked whenever the order changes from one status to another (e.g. Planned to Released). If component availability is different from when the Production Order was generated, the user will be able to select whether to keep original order quantity or newly calculated order quantity.
Map a Work in Progress Account
Production Orders specify a Work in Progress account and Finished Goods account so the accounting transactions of a production operation are correctly recorded.
By default, the Finished Goods account will be set to your Inventory Control account, but this can be manually edited from the Production Order.
You can specify which Work in Progress account to use by default from the Account Mapping screen. This is found in Settings → Reference Books → Financials → Account Mapping.
Create Production Orders
The Production Order defines the finished good to be produced, the location where the production will take place, the date and time of the production, and the number of components and resources required. The Production Order also defines the sequence of operations to be performed and the costs of finished goods. It is a vital part of the production process.
See the Production Order article for detailed step-by-step instructions for Production Orders.
The Capacity Planner is a resource allocation reporting and re-planning tool.
Each resource has a capacity which measures the capability of the resource to be used in production for some unit of time to produce some finished good. Knowing how much capacity is needed per finished good, it is possible to calculate how much time is required to produce this or that finished good. This is used to define timelines for production.
The Capacity Planner shows the capacity for a selected planning period, which resources are overallocated and allows re-planning of capacity to ensure smooth delivery of production orders.
See Capacity Planner for more information.
The DEAR Production Scheduler visualises production order information. Production Order information, Sales Orders (containing goods to be produced) and Resource capacity can be viewed in the form of a Gantt chart (Sales Orders Gantt and Resource Gantt coming soon).
The main goal of the Scheduler is to create the schedule for production, so all finished products are produced on time, providing smooth production without any delays. The second main goal is to provide transparency for the production process so that the user always knows what should be produced and when it should be completed. The core abilities of the Scheduler are to reschedule the production orders, production runs and operations.
This helps to assess how long an order should take, determine the resources loading, and plan the order in which the operations should be completed. The Scheduler also enables you to view and manage the dependencies between operations.
See Scheduler for more information.
It is important to have a transparent communication channel between production managers and sales managers. If the production manager implements production changes (e.g. re-plans orders), these changes impact the product delivery date and thus, Sales Order completion.
These Production reports are communication tools to inform the sales managers about changes in production without them having to go to the Scheduler to check, or be notified offline of any changes by the production manager.
Users can have read-only or full access to these reports with the Production Reports permission.
Users with a subscription to the DEAR automation module can set up Report Scheduling, Reminders and Notifications for these reports.
See Production Reports for more information.
What's next? Advanced Production Features
This module is under active development, and DEAR are continuously working to improve the capabilities of the Production module. Once you have mastered production basics, here are some more advanced production features that can help you best define your manufacturing processes using DEAR.
DEAR supports setting up complex operation sequences with parallel and non-parallel operations. See Implement parallel operations in a Production BOM for help setting up more complicated operation sequences.
DEAR supports manufacturing with several products resulting from one production process. See Finished products - Primary products, coproducts, byproducts, joint production products for detailed information on how to implement this kind of manufacturing process.
DEAR also supports defining virtual intermediate products of production operations for use in later operations. Such intermediate products can be reflected in the Production BOM to increase accuracy in production reporting and transparency for the production process. See Using Inputs and Outputs - Intermediate or semi-finished products. It is recommended to understand how finished products are used before moving on to intermediate products.