Understanding Production Order Types in Business Central
The manufacturing module in Business Central is a powerful set of features that helps companies produce goods. At the heart of the manufacturing process is the production order. Production orders bring together items and processes to allow users to manufacture goods and provide accurate costs.
When working with production orders, users are often confused by the different types of production orders. This post is designed to explain what each of the types does and when you need to or don’t need to use them.
Business Central provides the following production order types:
- Simulated Production Order
- Planned Production Order
- Firm Planned Production Order
- Released Production Order
- Finished Production Order
Users often ask:
- Why are there this many types?
- Do I have to use them all?
- What do they all do?
In short, no, you don’t have to use all the different production order types. In fact, the only two you will always use are Released and Finished. The others are optional. Let’s discuss what the features are for each type.
But first, a couple of notes:
- I am not going to discuss how to create or process production orders. Just what they are.
- By using the “Change Status” function for each of the types, you can move the order through the different types as noted above: Simulated to Planned to Firm Planned and so on. Be aware that because each type has its own number series, when you change the status from one type to another, a different order number will be generated.
- With the exception of simulated orders, the other types can be created manually, from sales orders, through the MRP/MPS (planning) process, or by changing the status from a previous type. Once again, I will not be discussing that process in this article.
Simulated Production Order
This type or production order is really just used to allow you to simulate the setup and costing of a produced item. These orders are only created manually and can be used to bring in and adjust BOMs and routings, or manually add items and work centers so you can simulate the product.
The MRP/MPS process does not consider them as demand or supply and does not reserve against items or work centers.
Planned Production Order
While you can manually create planned production orders, these are normally created using Business Central’s planning engine. The planning engine attempts to balance supply and demand and will suggest the creation of planned production orders to balance the demand. Subsequent running of the planning engine may result in changes to planned orders so you should only treat these as temporary.
Firm Planned Production Order
This type of order is a step up from planned orders. The planning process does not impact these orders. I prefer to manually create these orders as a beginning point as opposed to creating released production orders. This is a good place to create and plan for production. Hold these here until ready to start producing and then move to released. This gives the production floor something to see to know what’s coming. Some scheduling add-ons will include these orders if set up.
Note: With all of these statuses, you can manually make adjustments at any time to items consumed or routing steps.
Released Production Order
Released Production Order are the heart of the production process. This is the only type where users can post entries, whether item consumption or output, or non-item costs. Many external scheduling or monitoring applications will often only look at released orders. This type can also be manually entered, created from a sales order, or via the change status from a Firm Planned order. No matter the method of creation, you can also make changes to released orders. You can add components or change routing steps.
A warning if you plan to manually create released production orders. If you have forward flushing turned on, you could kick off the automatic flushing by creating the released production order and refreshing it. My recommendation is to create production orders using the Firm Planned type and then changing the status to Released when ready.
Finished Production Order
Finished Production Orders are just that, finished. You can think of these as posted orders (even though you posted transactions while in released status). Originally, once a production order was finished, no other adjustments could be made and the order could not be “re-opened” back to release status. You should really make sure that everything was posted prior to finishing the order. Recently, Microsoft has provided the option to re-open production orders. But there are limitations to this. So, you should check with your partner on those limitations. My general rule is to verify that all the posting were done prior to finishing the order.
So, why the concern? Why can’t you re-open finished orders? The answer lies in what Business Central does with the order when you finish it. When finishing production orders and running the adjust cost routine, Business Central performs the following functions:
- It clears out the WIP account for any balances left there
- For standard-costed items, it calculates variances and posts them
- For non-standard-costed items, it calculates any adjustment to the cost of the outputted item and pushes those changes to any related entries
Because of this, it makes it very hard to undo those transactions when re-opening the production order. Hence, the limitations.
Final Thoughts
As stated previously, Business Central provides various types of production orders which you may or may not use. My preference is just to use firm planned, released, and finished unless additional functionality is needed. How you use them will take some internal discussion and testing. Most companies will not need to use all the different types, but should review the need for each when planning your manufacturing processes.
