search-icon

Production BOMs can contain finished products (products with their own production BOM) or assembled components (products with their own Assembly BOM). This article explains how orders containing nested production BOMs are treated by the system. 


Nested production orders are only created if the nested order product is not in stock, either in the shop floor warehouse or in the connected warehouse. 


NOTE: Component finished products must have their own production BOM in order for nested production orders to be generated. Finished products that are produced as part of another product's manufacturing process, but which do not have their own production BOM, will not cause nested production orders to be generated. 


Prerequisites


Table of Content


Manually Authorising a Production Order

[back to top]


This applies when a Production Order is authorised/released from the Production Orders List, Scheduler or the Production Order itself. Production Orders start in status Draft. No nested orders for finished products are created while the Production Order is in Draft status.


Authorising/Planning a Production Order creates nested orders in Planned status. Releasing a Production Order changes its nested orders to Released status. 


Assembly Orders will not be generated for semi-finished components with Assembly BOM – these must be raised manually.


Production Orders created from Sales Orders

[back to top]


You can set Production Orders to be created from Sales Orders (as well as manual creation and creation from  Reorder suggestions page). This can be configured in Settings → General Settings → Production Process Customisation. See General Settings - Production for more detailed information about Production Settings. 

When a Sales Order is authorised, Production Orders are created with Draft, Planned or Released status. 


Nested Production Orders are created for semi-finished components with a Production BOM with the same status as the top-level order (except for Draft orders). Planning/Releasing a top-level order will Plan/Release the nested orders. 


Assembly Orders will not be generated for semi-finished components with Assembly BOM – these must be raised manually.


Sales Order Example

[back to top]


Product A is a finished product with a Production BOM. A demand for one (1) unit of Product A is created by a Sales Order. When the Production Order for Product A is authorised, Product A Production BOM explosion is initiated.



All orders for semi-finished components (nested orders) are created in the same status as Production Order for finished product (parent). This means that if setting is set to Released status, all nested orders will be created in Released status.


The low level elements are highlighted with yellow. These are the simple components which required to replenish (or take from stock if they are available) to complete the Product A. 


NOTE: Simple components quantities for replenishment (created Transfer Orders and Purchase Orders) are calculated based on the Availability in the Shop Floor and connected Warehouse (see Logistics Path). These formulae are only applied for finished and semi-finished products of the order. 


Let's assume that every product needs 1 each of of its finished and semi-finished products. 


Scenario 1

  • Setting: Quantity Required (Production Orders will be created only for quantity required for Sales Order)


A sales order for quantity 1 of Product A is authorised. 


In Product A example the following orders will be created:

  • Product A - Production Order for quantity 1 (Sales Order demand)
  • Product B - 2 of Product B are needed for each Product A. (Separate orders are created)
    • Production Order for 1 Product B 
    • Production Order for 1 Product B
  • Product C - 1 of Product B is needed for Product A
    • Production Order for quantity 1 (it is needed 1 Product C for Product A creation)
  • Product E - 1 of Product E is needed for each Product B.  2 Product B are needed for Product A. (Separate orders are created)
    • Production Order for 1 Product E 
    • Production Order for 1 Product E


  • Related orders: Purchase Orders and Transfer orders are created depending on the availability of simple components, the same as it is done for a regular Production Order. 
    • Related orders are created only for the orders to which they refer and not visible in the parent order. If Product L is required for Product C production, then Purchase Order for Product L Production order will include Purchase orders for Product C. 
    • In Production Order for Product A, the Purchase Order for Product C is not displayed. In case if Product L is required for some other Production Order, it will be created within this Production Order.


  • Assembly BOM doesn't initiate orders creation the same as Production BOM
    • No Assembly Order is created for Product F, it must be raised manually. 
    • No Purchase Orders/Transfer Orders are created automatically for Assembly Order components. 


Scenario 2:

  • Setting: 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.)


The Minimum before Reorder quantity for each component is 1. The Reorder Quantity is 1. The starting availability for all components is 1. 


A sales order for quantity 1 of Product A is authorised. 


NOTE: 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. 


In Product A example the following orders will be created:

  • Product A -  1 of Product A needed to meet Sales Order demand, 1 of Product A required to maintain stock Quantity. 
    • Production Order for 2 Product A
  • Product B - 2 of Product B is needed for each Product A. 
    • Production Order for 3 Product B (this order considers the Reorder and Minimum Stock)
    • Production Order for 1 Product B (this order does not) 
  • Product C - 1 of Product C is needed for Product A, 2 of Product A are required. 
    • Production Order for 2 Product C
  • Product E - 1 of Product E is needed for each Product B.  2 Product B are needed for Product A.
    • Production Order for 3 Product E (this order considers the Reorder and Minimum Stock)
    • Production Order for 1 Product E (this order does not) 

Scenario 3: 

  • Setting: Difference between available quantity and quantity required to cover a shortage (Production Order quantity is calculated as: Available - Quantity in Sales Order (negative availability is considered as 0). 


The availability for all components is 1.


NOTE: 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.


A sales order for quantity 1 of Product A is authorised.


  • Product A - 1 of Product A needed to meet Sales Order demand
    • Production Order for  1 Product A
  • Product B - 2 of Product B are needed for each Product A. (Separate orders are created)
    • Production Order for 1 Product B 
    • Production Order for 1 Product B
  • Product C - 1 of Product B is needed for Product A
    • Production Order for quantity 1 (it is needed 1 Product C for Product A creation)
  • Product E - 1 of Product E is needed for each Product B.  2 Product B are needed for Product A.
    • Production Order for 1 Product E 
    • Production Order for 1 Product E


Production Orders created from Reorders Suggestion Page (Smart Reordering)

[back to top]


Creation of Production Orders using Smart Reordering is possible from the Reorder suggestions page. Reorder Suggestions page can be opened from the Inventory Velocity Report or the Reorder Suggestions email.(See Smart Reordering for more information). 


  1. On the Reorder Suggestions page, select Reorder Type: Production.
  2. Select the Location where the Production Order is to be created. 
  3. Check the boxes next to the SKUs that you wish to reorder and click Reorder.

  4. The Production Order is created together with all nested Assemblies/Production orders for semi-finished components required to product the finished good. All orders are created in Draft status.


Related Orders for Nested Production Orders

[back to top]



Nested Production Orders for a finished good can be found on the Related Orders tab of the Production Order. See Production Orders - Related Orders for more information. 

  • If the Production Order was generated by a sale authorisation, the sale order will appear in the Related Orders tab of the top-level Production Order
  • Related Orders tab will show nested Production Orders for semi-finished components.
    • Related Orders for semi-finished components will also show the Production Order for the next nested level up.

Capacity calculation for nested Production Orders

[back to top]


A Production BOM can contain semi-finished products that are Production BOM products themselves. There can be several hierarchical levels of a Production BOM, meaning that the final finished product can contain a series of nested semi-finished products. Production Orders for nested semi-finished products are created and planned (resource capacity is calculated) automatically when the top-level order is authorised.


Semi-finished products Production Orders are created in the same location as the finished good Production Order. Completed semi-finished products should be put away to either the Shop floor location of the top-level order or the connected warehouse location. 


These Production Orders are displayed in the Related Orders tab of the top-level finished good (described below). Orders for nested Production Orders are created with the following properties:

  1. Status of the order is Planned.
  2. Required by Date of the nested product = Release Date of the finished product Production Order. 
    • Since the Release date for the finished product Production Order is not confirmed (release of this order is not done), it is calculated from the default release date for the finished product Production Order. It is calculated the same as for the top-level production order.
  3. Timelines for semi-finished products Production Orders are automatically calculated by the From Required by date backward method if the Required by Date is available in the top-level Production Order. Timelines are calculated for each order separately. The timelines for the finished product Production Order is the sum of all Production Order timelines for the semi-finished products. 


Release of semi-finished products Production Orders should be executed manually. This will create related orders (Stock Transfer, Purchase Orders) necessary for that order. These created orders are not visible in the Related Orders tab of the top-level finished product. 


In Capacity Planner, if one semi-finished product Production Order is re-planned, all other orders including the finished product Production Order are not re-planned. The user will have to go to the Scheduler and check that any problems caused by the re-planning are resolved. 


Undo/Void of Nested Production Orders

[back to top]


Undoing/Voiding one level of a Production Order DOES NOT Undo/Void nested Production Orders. 


Undoing/Voiding a sales order that has generated a Production Order DOES NOT Undo/Void the Production Order or its nested Production Orders. 

Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.