Manufacturing & Work Orders

The Work Orders module coordinates assembly and manufacturing processes. It consumes raw component stock based on Bill of Materials (BOM) formulas, tracks Work-in-Progress (WIP), and receives capitalized finished goods into inventory.

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Manufacturing Lifecycle & Cost Rollup Logic

stateDiagram-v2
    [*] --> Draft : Create Work Order
    Draft --> Released : Release Order (Commit Component Stock)
    Released --> InProgress : Issue Components to WIP
    InProgress --> Completed : Receive Finished Goods
    Completed --> Closed : Finalize Cost Rollup & Variance
    Draft --> Cancelled : Cancel

1. Bill of Materials (BOM) Component Requirements

When a work order is released, required component quantities are computed from the multi-level BOM:

Required Component Quantity = Target Quantity * BOM Component Ratio * (1 + Scrap Allowance% / 100)

• Stock Commitment: Advancing to Released commits raw materials in storage bins, preventing other sales orders or work orders from claiming those parts.
• Component Issue: Advancing to In-Progress physically decrements component counts from storage bins and moves stock value into Work-in-Progress (WIP).

2. Finished Good Valuation & Cost Rollup

When assembly is finalized, the unit cost of the finished product is calculated dynamically:

Total Manufacturing Cost = Sum(Actual Component Qty Consumed * Component WAC) + Labor & Overhead
Finished Good Unit Cost = Total Manufacturing Cost / Completed Quantity

The resulting unit cost becomes the initial Moving WAC for newly manufactured stock batches.

3. General Ledger Manufacturing Postings

1. Component Consumption (Issue to Floor):
   Debit:  Work in Progress (WIP) Asset Account
   Credit: Raw Materials Inventory Asset Account

2. Finished Goods Completion:
   Debit:  Finished Goods Inventory Asset Account (Completed Qty * Finished Unit Cost)
   Credit: Work in Progress (WIP) Asset Account

3. Scrap / Production Loss:
   Debit:  Manufacturing Scrap / Variance Expense
   Credit: Work in Progress (WIP) Asset Account

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Step-by-Step Workflows

1. Creating and Completing a Work Order

1. Go to Manufacturing → Work Orders (/manufacturing/work-orders).
2. Click New Work Order.
3. Select the Finished Product and specify the Target Quantity.
4. Review the auto-populated Bill of Materials (BOM) components.
5. Click Release Order to commit raw components.
6. When assembly starts on the floor, click Start Assembly (issues parts to WIP).
7. Upon completion, enter Completed Quantity and any Scrapped Quantity.
8. Click Complete Work Order to deposit finished units into storage and post capitalized asset entries.

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Field Reference

Field	Description
Work Order Number	Unique production identifier (e.g. WO-2026-00021).
Finished Good	Assembled product SKU and description.
Target Quantity	Scheduled production count.
Completed Quantity	Actual accepted units manufactured.
Scrapped Quantity	Defective or damaged units recorded during assembly.
Production Warehouse	Facility where assembly occurs.
Status	Stage (Draft, Released, In-Progress, Completed, Closed).