05 - Executing a Work Order

Once a Work Order is saved and approved, the next step is to execute it. Execution involves issuing raw materials, adding services, and finally dispatching the finished product.

Steps to Execute a Work Order

1. Open the Work Order

   • Navigate to the list of work orders.

   • Select the approved work order you want to execute.

2. Issue Materials

   • Click on Issue Materials.

   • This will create a Goods Issue transaction.

   • Select the materials required for production based on the BOM.

   • Confirm the quantities and post the transaction.

3. Add Services (Optional)

   • If additional services (e.g., subcontracting, labor, machine usage) are required, click on Add Services.

   • Enter service details and associated costs.

   • Save the entries to link them with the work order.

4. Return Materials (Optional)

   • If there are unused materials, you can return them by clicking on Return Materials.

   • This creates a return transaction and updates stock levels.

5. Dispatch Finished Products

   • Once production is complete, click on Dispatch Finished.

   • This will generate a Goods Receipt entry for the finished items.

   • The stock of finished products is updated in the selected warehouse.

6. Complete the Work Order

   • After all materials are issued and finished goods are dispatched, update the status of the work order to Complete.

   • The system records all associated costs and material consumption.

Quick Tip: You can always track costs under the Service Costs tab, materials under Issued Materials, and outputs under Finished Items.

When issuing goods against a Work Order, the system maintains both estimated and actual costs:

• Estimated Material Cost – Derived from the Bill of Materials (BOM) and planned consumption.

• Estimated Service Cost – Based on service items or subcontracting linked to the Work Order.

• Estimated Total Cost – Sum of estimated material and service costs.

As goods are actually issued, the system updates:

• Actual Material Cost – Based on the cost of items withdrawn from inventory.

• Actual Service Cost – Based on service entries or linked subcontracting costs.

• Actual Total Cost – Reflects the true cost incurred.

This helps compare planned vs. actual costs, providing visibility into variances, production efficiency, and potential cost overruns.

Example

For Work Order WO-001 to manufacture 100 units of Product A:

1. Raw materials are transferred to production

2. 50 units are produced in the first batch (progress updated)

3. Remaining 50 units are produced and marked as finished

4. The system updates stock → 100 finished goods are available in inventory

Best Practices

• Always verify material availability before starting

• Use batch-wise production tracking for better visibility

• Close the Work Order only after verifying stock updates