Types of Production Planning
Broadly there are three types of Production Planning Systems
- Make-to-Stock: In these systems, production is planned based on a forecast and the Items are then sold to distributors or customers. All fast moving consumer goods that are sold in retail shops like soaps, packaged water etc and electronics like phones etc are Made-to-Stock.
- Make-to-Order: In these systems, manufacturing takes place after a firm order is placed by a customer.
- Engineer-to-Order: In this case each sale is a separate project and has to be designed and engineered to the requirements of the customer. Common examples of this are any custom business like furniture, machine tools, speciality devices, metal fabrication etc.
Most small and medium sized manufacturing businesses are based on a make-to- order or engineer-to-order system and so is ERPNext.
For engineer-to-order systems, the Manufacturing module should be used along with the Projects module..
Manufacturing and Inventory
You can track work-in-progress by creating work-in-progress Warehouses.
ERPNext will help you track material movement by automatically creating Stock Entries from your Production Orders by building from Bill of Materials.
Next: Bill Of Materials