A manufacturing business uses work orders whether it is generated manually or using software. When manual, pieces of paper documents are passed from one factory area to another to identify the process being performed, the end product and the quantity. If the foreman or a salesperson wants to know the status of the production, he or she has to chase around to find out where it is, what has been done so far and when it will all be ready.
In the computerized model, as the paperwork travels in stages to its final destination, someone records its status. The foreman or salesperson simply checks its status using the designated software.
Some items are built for stock, others for specific customer orders. Those that need a faster track to finished production status can be a dilemma to the decision maker on the method to speed up the process.
Should a customer order for an item that needs to be produced automatically trigger the creation of a production work order? Or should it trigger a report that helps a factory worker decide to create the work order?
If a sales order triggers an automatic work order it may cause issues related to being able to produce the item especially if raw material is allocated for previously generated work orders. If a work order is only generated when human interaction decides so, then the business is reliant on properly trained workers to make the proper decision making on a timely basis.
There is also a third choice- no automatic linkage of work orders to sales orders and no manual assignment of work order. Instead, Manufacturer Resource Planning (MRP) is used to evaluate how many of an item is required for production based on commitments and prior sales along with how much raw material is available in stock. Even if MRP is performed once a week, it may still delay delivery of a customer order but it keeps workflow disciplined.
Or maybe a business uses all three options depending on the situation. The decision maker at a manufacturer type business establishes the policy rules for production and relies on computer support personnel to help achieve the results that works best for them.
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