Processing Production Orders

As Trent shifts his focus to in-house production, Julie steps in to guide him. She will show him how production orders play a vital role in the entire process, right from taking a sales order to the final receipt of the finished product. Trent, who still waits for his bike from Rapid Riders, is all set to dive deeper into learning about the production process of his bike.

During order execution, a production order goes through many steps – not only in manufacturing, but also in the SAP S/4HANA system.

The main steps in order processing are:

	1. Order Creation
	When an order is created, the system selects the required master data, for example the routing, and schedules the order. A corresponding order status ‘created’ is set.
	2. Order Release
	When an order is released, it is made available to production for processing. A corresponding status ‘release’ is set. In the release status, goods issues, confirmations, and goods receipts can be posted.
	3. Goods Issues
	By posting goods issues and material components to production orders, the corresponding material consumption is recorded, and stock quantities and stock values of the components are decreased.
	4. Confirmation
	By posting confirmations, the order progress is tracked to monitor whether the production runs smoothly and to identify production delays as soon as possible.
	5. Goods Receipts
	Usually, after the last operation of a production order is executed, the receipt of the manufactured goods is posted in the SAP S/4HANA system to update inventory records. The stock quantities and stock values of the manufactured goods are increased.

To support the main steps, the system offers various supporting functions. Between order creation and order release, checks are executed ensuring that the order can be correctly processed. For example, the system ensures that the required material components are available in the required quantity at the required time. You can also optimize your production in a way that resources are used as efficiently as possible.

Prior to manufacturing, it may be necessary to stage the raw materials from the central warehouse to the production area.

A production order defines which material is to be produced in which quantity, time, and way. In the Bike Company, production orders are used to start and control bicycle production.

The individual production order defines the following information:

• Which types of bicycles are to be produced?
• Which quantities are to be produced?
• When will the bicycles be produced to meet customer orders or other requirement dates?
• Which material components are needed?
• Which operations are to be carried out at which work centers?