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A Production Order tells your factory to manufacture a specific quantity of a material.

Instead of simply increasing inventory, a Production Order reserves the required components, tracks the manufacturing process, and creates a fully traceable batch when production is finished.

Production Orders are the bridge between planning and actual manufacturing.

What is a Production Order?

A Production Order represents the instruction to manufacture a material.

It answers questions such as:

• What should be produced?
• How much should be produced?
• When should production start?
• What materials will be consumed?

Unlike a Bill of Materials, which only defines the recipe, a Production Order executes that recipe.

Which materials can have Production Orders?

Production Orders are used for materials that are manufactured by your company.

That includes:

• Fractionated materials, where one material is divided into smaller products.
• Assembled materials, where several components are combined into a finished product.

Pure raw materials purchased from suppliers normally do not require Production Orders.

Examples

Fractionated

• Steel Coil → Steel Sheets
• Cheese Wheel → Cheese Portions
• Fabric Roll → Fabric Pieces

Production Order States

A Production Order moves through four states during its lifecycle.

Created

The Production Order has been created but production has not started.

At this point:

• no inventory is consumed
• production can still be changed or canceled

Accepted

Production has started.

When a Production Order is accepted:

• every required component is immediately removed from inventory
• inventory reflects that those materials are now being used in production
• shortages disappear because the required materials have already been reserved

Interrupted

Production has been temporarily stopped.

Typical reasons include:

• machine maintenance
• missing operators
• quality problems
• lack of electricity
• production scheduling changes

Production can later continue from this state.

Delivered

Manufacturing has finished successfully.

When delivered:

• a new inventory batch is created
• the finished material becomes available for sale or future production
• complete traceability information is stored

Inventory Consumption

The moment a Production Order is Accepted, ProdCalc automatically consumes every required component defined in the Bill of Materials.

For example, suppose you produce 100 Wooden Chairs.

The Bill of Materials requires:

• 4 Wooden Legs
• 1 Seat Panel
• 1 Backrest
• 16 Screws
• 4 Rubber Feet

When the order is accepted, ProdCalc immediately removes:

• 400 Wooden Legs
• 100 Seat Panels
• 100 Backrests
• 1,600 Screws
• 400 Rubber Feet

from inventory.

This prevents the same inventory from being accidentally used by another Production Order.

Batch Creation

When production is completed, ProdCalc creates a brand-new batch for the finished material.

For example:

Material:
Wooden Chair

Batch:
WC-2026-001

Quantity:
100 units

Produced on:
July 15, 2026

This batch becomes available for future sales or additional manufacturing.

Complete Batch Traceability

Every produced batch remembers exactly which component batches were consumed.

For example:

Produced Batch

Wooden Chair
Batch WC-2026-001

Built from:

Leg Batch LG-105
Seat Batch ST-022
Backrest Batch BR-018
Screw Batch SC-331
Rubber Foot Batch RF-044

This allows complete manufacturing traceability.

If a supplier later reports a defective batch of screws, you can immediately identify every finished product that contains those screws.

Impact on Material Shortages

Production Orders directly affect the Material Shortages Report.

Before accepting a Production Order, ProdCalc checks whether enough inventory exists.

If components are missing, the Material Shortages Report indicates exactly what must be purchased or produced.

After the Production Order is accepted:

• required inventory is reserved
• shortages are recalculated
• available inventory is updated

This gives planners an accurate view of future production capacity.

Example

A furniture manufacturer receives an order for 100 Wooden Chairs.

The planner creates a Production Order.

The order progresses through these steps:

1. Create a Production Order for 100 Wooden Chairs.
2. Review the Material Shortages Report.
3. Purchase any missing components.
4. Accept the Production Order.
5. ProdCalc consumes all required materials from inventory.
6. Workers manufacture the chairs.
7. Deliver the Production Order.
8. ProdCalc creates Batch WC-2026-001.
9. The new batch becomes available for sale with complete component traceability.

Try It Yourself

Open the ProdCalc AI and type:

Create an assembled material named Wooden Chair.

If you haven’t already, create its Bill of Materials:

Add 4 Wooden Legs, 1 Seat Panel, 1 Backrest, 16 Screws, and 4 Rubber Feet to the Wooden Chair BOM.

Then create a Production Order:

Create a Production Order for 100 Wooden Chairs.

Finally, accept and deliver it:

Accept the Production Order for 100 Wooden Chairs.

Deliver the Production Order for 100 Wooden Chairs.

ProdCalc will reserve all required materials, consume them from inventory, create a new finished batch, maintain complete traceability of every consumed component batch, and update the Material Shortages Report automatically.