The make-to-order process is a production process that meets the following conditions:
- It starts upon a customer’s order for a finished product.
- It is completed in one step.
- It does not require accounting for manufacturing overheads by completed operations.
If a company sells the finished products on its own, the make-to-order process can be a subprocess of the company’s quote-to-cash process.
The process steps can vary depending on the company business needs. In general, the process starts when a sales order is received and ends when the finished product is transferred to a warehouse.
1C:Drive supports the following make-to-order steps:
- Set up the make-to-order process.
- Place production orders.
- Monitor production order statuses.
- Plan materials.
- Arrange materials supply.
- Transfer materials to a manufacturing site.
- Manufacture products.
- Transfer finished products to a warehouse.
Setting up make-to-order process
When you start the make-to-order process, do the following:
- Go to Settings > Production and clear the Use WIP documents check box.
- If you want to manufacture a product that requires a new bill of materials (BOM), register the BOM in the Bills of materials catalog.
Placing production orders
When you receive a sales order that requires product manufacturing, register a production order.
Monitoring production order statuses
To ensure that you complete production orders in time, track production order statuses
in the Production orders list. To learn more, see Monitoring production order statuses.
Planning materials
To ensure that you have sufficient materials to fulfill production orders, use the Demand planning tool for material requirements planning. To learn more, see Demand planning.
Arranging materials supply
When the materials for production are out of stock or insufficient, you need to arrange their supply. To learn how to do so, see Procure-to-pay process.
Transferring materials to manufacturing site
When you transfer materials to the manufacturing site, register and post an inventory transfer. This automatically posts an inventory transfer entry to the general ledger journal.
Note. You can quickly generate an inventory transfer based on a production order.
Manufacturing products
When you manufacture the ordered product, define the manufacturing details (such as finished goods and their components). To do so, register a production document and set the Operation field to Assembly.
Manufacturing results in finished products. When you post production documents, the following entries are posted to the general ledger journal:
- The materials are moved to work in process (WIP).
- The finished product cost is moved from WIP to the company's finished goods account.
Transferring finished products to warehouse
When you move finished goods to a storage location, register inventory transfer. You have the following options:
- Register inventory transfer using a separate inventory transfer document.
- Register inventory transfer using a production document.
If your business process requires a separate document, create an inventory transfer. You can quickly generate it based on the production document.
If a separate inventory transfer document is not required, do the following:
- In a production document, open the Finished products tab.
- In the Transfer to field, specify a storage location.
- Click Post and close.
In both cases, inventory movement is automatically registered in the general ledger.
If you want to continue with the finished goods shipment to a customer, follow the quote-to-cash process starting from step Shipping goods and processing sales invoices.
Make-to-order diagram
The following diagram illustrates common steps of the make-to-order process.
