Work Orders

Work Orders are production orders that track what to build, from which components, and when.

Work Order Overview

WORK ORDER LIFECYCLE
─────────────────────────────────────────────────────────────────

┌─────────────────┐     ┌─────────────────┐     ┌─────────────────┐
│  WORK ORDER     │     │ ISSUE/BUILD     │     │  WORK ORDER     │
│  CREATED        │ ──▶ │ (Production)    │ ──▶ │  CLOSED         │
│                 │     │                 │     │                 │
│  GL: None       │     │  GL: Transform  │     │  GL: Variances  │
│  Inv: Commits   │     │  Inv: Transform │     │  Inv: None      │
└─────────────────┘     └─────────────────┘     └─────────────────┘

Stage 1: Work Order Creation

What Happens

Action	Result
Create WO	Production order saved
Select assembly	What to build
Set quantity	How many to build
BOM exploded	Components listed
Components committed	Inventory reserved

Creating a Work Order

WORK ORDER CREATION
─────────────────────────────────────────────────────────────────

Work Order #WO-001
├── Assembly: Widget-Assembly (Build qty: 10)
├── Status: Planned
├── Components from BOM:
│   ├── Part-A: 20 units (2 per assembly)
│   ├── Part-B: 10 units (1 per assembly)
│   └── Part-C: 30 units (3 per assembly)
└── Build Date: Target completion date

GL Impact

None - Work Order is just a plan, no financial impact.

Inventory Impact

COMPONENT COMMITMENT ON WORK ORDER
─────────────────────────────────────────────────────────────────

Before WO:
┌─────────────────────────────────────────┐
│ Part-A:                                 │
│   On Hand:     100                      │
│   Committed:     0                      │
│   Available:   100                      │
└─────────────────────────────────────────┘

After WO (needs 20 units of Part-A):
┌─────────────────────────────────────────┐
│ Part-A:                                 │
│   On Hand:     100  (unchanged)         │
│   Committed:    20  (reserved for WO)   │
│   Available:    80  (100 - 20)          │
└─────────────────────────────────────────┘

Work Order Types

Standard Work Order

Basic production order - components consumed, assembly produced.

STANDARD WORK ORDER
─────────────────────────────────────────────────────────────────

Work Order → Assembly Build → Completed

Simple flow:
  1. Create Work Order
  2. Build (consumes components, produces assembly)
  3. Close Work Order

Work Order with WIP Tracking

Track work-in-progress inventory separately.

WORK ORDER WITH WIP
─────────────────────────────────────────────────────────────────

Work Order → Issue → Completion → Close

Detailed flow:
  1. Create Work Order
  2. Issue components to WIP (components → WIP)
  3. Complete assembly (WIP → assembly)
  4. Close Work Order (capture variances)

Work Order with Routing

Track operations/manufacturing steps.

WORK ORDER WITH ROUTING
─────────────────────────────────────────────────────────────────

Work Order
    │
    ├── Operation 10: Cut (Machine time: 2 hrs)
    │   └── Complete operation
    │
    ├── Operation 20: Assemble (Labor: 4 hrs)
    │   └── Complete operation
    │
    └── Operation 30: Inspect (QC: 1 hr)
        └── Complete operation → Assembly complete

Work Order Statuses

Status	Meaning
Planned	Created, not released
Released	Ready for production
In Process	Production started
Built	Assembly build completed
Closed	Finalized, variances captured

STATUS FLOW
─────────────────────────────────────────────────────────────────

Planned ──▶ Released ──▶ In Process ──▶ Built ──▶ Closed
   │                          │
   │                          └── Can issue/complete
   └── Pending start

Component Management

BOM Explosion

When you create a Work Order, the BOM (Bill of Materials) is "exploded":

BOM EXPLOSION EXAMPLE
─────────────────────────────────────────────────────────────────

Assembly: Bicycle (Build: 5 units)

BOM (per assembly):
  Frame:    1 each
  Wheels:   2 each
  Pedals:   2 each
  Chain:    1 each

Work Order Components:
  Frame:    5 units (1 × 5)
  Wheels:  10 units (2 × 5)
  Pedals:  10 units (2 × 5)
  Chain:    5 units (1 × 5)

Component Substitution

You can substitute components if needed:

COMPONENT SUBSTITUTION
─────────────────────────────────────────────────────────────────

Original BOM Line:
  Part-A: 20 units @ $10 = $200

Substitution:
  Part-A-Equiv: 20 units @ $12 = $240

Result:
  Work Order cost increases by $40
  Production continues with substitute

Phantom Components

Subassemblies that are consumed, not stocked:

PHANTOM COMPONENT
─────────────────────────────────────────────────────────────────

Assembly: Widget
├── Subassembly-X (Phantom)
│   ├── Part-A: 2 units  ─┐
│   └── Part-B: 1 unit   ─┼── These are consumed directly
│                         ─┘
└── Part-C: 3 units

Work Order Components:
  Part-A: 2 units  (from phantom)
  Part-B: 1 unit   (from phantom)
  Part-C: 3 units  (direct)

Scheduling

Backward Scheduling

Start from due date, work backward:

BACKWARD SCHEDULING
─────────────────────────────────────────────────────────────────

Due Date: March 15
Lead Time: 5 days

Calculated:
  Start Date: March 10
  Component Need Date: March 10

Forward Scheduling

Start from start date, work forward:

FORWARD SCHEDULING
─────────────────────────────────────────────────────────────────

Start Date: March 10
Lead Time: 5 days

Calculated:
  End Date: March 15
  Component Need Date: March 10

Work Order from Sales Order

Create Work Orders automatically from Sales Orders:

WORK ORDER FROM SALES ORDER
─────────────────────────────────────────────────────────────────

Sales Order #SO-001
├── Line: Custom-Widget (qty: 5)
│   └── Special Order → Create Work Order
│
└── Work Order #WO-001 automatically created
    ├── Linked to SO-001
    └── Build qty: 5

Quick Reference

Work Order Fields

Field	Purpose
Assembly	What to build
Quantity	How many
Location	Where to build
Build Date	Target completion
Start Date	When to start
Order Status	Planned, Released, etc.

Common Actions

Action	Result
Release	Allow production to start
Issue	Send components to production floor
Build	Complete assembly production
Close	Finalize and capture variances

Next Steps

Assembly Build - Complete work orders
Outsourced Manufacturing - Vendor manufacturing

Work Order Overview​

Stage 1: Work Order Creation​

What Happens​

Creating a Work Order​

GL Impact​

Inventory Impact​

Work Order Types​

Standard Work Order​

Work Order with WIP Tracking​

Work Order with Routing​

Work Order Statuses​

Component Management​

BOM Explosion​

Component Substitution​

Phantom Components​

Scheduling​

Backward Scheduling​

Forward Scheduling​

Work Order from Sales Order​

Quick Reference​

Work Order Fields​

Common Actions​

Next Steps​