In this 30-minute session, you will learn: How Work Orders relate to the ERP system through MRP What prompts the automatic creation of a Work Order? What do Work Orders accomplish besides building parts and products?

1. ERP 101 Session 8
Work Orders – Manufacturing’s Starting Point
David Bush
Senior Manufacturing Consultant,
Rootstock

3. The ERP 101 Webinar Series
Date Topic
Aug 2, 2016 An Introduction to ERP for Manufacturing
Aug 16, 2016 Engineering – Learn how to create Part Master Records and Bills of Material
Aug 30, 2016 Engineering – Learn how Change Orders and/or Revisions ensures that ERP system data is
accurate and up-to-date
Oct 11, 2016 Shop Floor – Explore how ERP is used to create and maintain Work Centers, Routings and
Procedures
Nov 1, 2016 Shop Floor – See how scheduling the Shop Floor through ERP controls Labor and Machines
Nov 29, 2016 Procurement – Link your Vendors and Purchased Parts via ERP
Dec 13, 2016 MRP – Step through an overview of this vital ERP subset
Jan 24, 2017 Work Orders – Manufacturing’s Starting Point
Feb 14, 2017 Inventory - Maintaining Accurate and Reliable Data
TBA Sales – See how you can link your Customers and Products via ERP
TBA Manufacturing Accounting – An overview using standard cost
TBA Manufacturing Accounting – An overview using weighted cost

4. Meet Our Speaker
David Bush
Senior Manufacturing Consultant,
Rootstock
• 30+ years of manufacturing and MRP/ERP
systems experience
• Previously at General Microcircuits,
Consona Corporation, Relevant Business
Systems, Inc

5. A Quick Recap
• What we have covered in our first 7
episodes:
– The history of MRP/ERP systems
– Engineering Item Master and Bills of
Material
– Shop Floor Routings
– Purchasing’s role in modern ERP systems
– MRP – How it fits into the ERP system
Today we look at another facet of MRP
planning, work orders.

6. Material Planning WITHOUT MRP
• Spreadsheets are used to track material supplies and
demands for raw material and subassemblies. Data
includes:
– Current Inventory Levels
– Current Demands
– Future Demands
– Re-order points
• Planner calculates actual demand over time
• Open supply orders considered (work orders/po’s)
• Open demands then deducted from inventory and supply
orders to determine necessary actions:
– We’re ok
– Uh oh… about to run out
– Uh oh… we have way too much!
Done for every active part on the system.. .PFEW! Thank
goodness for MRP!

7. Where do Work Orders Originate?
MRP
Engine
Material
Demands
from Sales
Orders and
Work Orders
Engineering and Inventory
Item Masters used by Planning
MRP creates
suggested
Work Orders
Manual Work
Orders
Work Order
Receipts bring
material to
stores
Planner reviews
and firms
suggested Work
Orders

8. Work Orders Create Supplies AND Demands
Bicycle handlebar assembly
• The Work Order to build this assembly creates a
SUPPLY for the number of assemblies being built.
• MRP also sees a DEMAND for the components
required to build the assembly:
– Handlebar grips (2)
– Stem (1)
– Reflector Assembly (1)
These demands are defined on the bill of material,
and may be adjusted on the work order without
affecting the original bom.
So, what do Work Orders accomplish?

9. Work Order Accomplishments
Supplies
Satisfy ‘needs’ seen by MRP
Provide the ability to manually
build items apart from MRP
Capture Data and
Maintain History
Material Issues
Labor Reporting
Work Center Demands
Scrap
Costs: material, labor, machine,
overhead, subcontract
Identify Demands
Material demands for raw
material and sub-assemblies
Labor and Machine time, used
for scheduling and financial
planning
Is that all there is to consider?

10. Following a Work Order’s Progress
• MRP generates planned Work Orders
• Planned Work Orders are firmed to identify material
requirements via the pick list.
• Routing is attached to identify labor/machine requirements.
• Material is allocated and issued.
• Work Order is ‘released’ to Manufacturing.
• Component and Parent scrap is identified
• Labor is reported, along with completions at each operation.
• Finished parts are received to stores.
• Work Order formally ‘closed’ when all costs are accounted for.
– No further labor or material issues can occur when ‘closed’.
Let’s see how this comes together is Rootstock.

11. Work Order Firm/Unfirm Object
What if the work order needs to be adjusted before I firm it?

12. Adjusting MRP-created Work Orders
Once we have made our changes and ‘firmed’ up the order, what’s
next?

13. Creating Pick List and attaching the Routing
• Click ‘Extract Operations’ to create the routing for this order.
• Click ‘Extract Components’ to create the pick list used to issue material to the work
order.
Let’s examine additional information held on the record.

14. Work Order Adjustments
• Changing the Due Date has adjusted the other related dates.
• Scheduled Completion Date will be visible once the order is included in the shop floor scheduling
function.
• Cost details including labor, material, overhead and subcontract operations are all visible from the
work order object, adjusting as the work order progresses thru the scheduled operations.
How are operation quantity completions and labor entered?

15. Work Order Labor and Quantities Complete
• One method is using the Time & Quantity Bookings object.
• Transaction date, total hours and total parts completed are entered.
• Parts completed can reduce time still needed at the work center
when running the scheduling program.
• Hours adds both labor and overhead costs to the work order.
How are the completed parts received into stock?

16. Quantity accepted may be equal to or less than quantity available.
• Inventory location (id and number) are entered, then ‘Perform Work Order Receipt’ button is
clicked.
• Quantity Remaining indicates number of parent yet to be received. If scrapped at any
operation, this number will reflect the total ‘good’ available for stock.
Once all of the work order quantity is accounted for (received or scrapped) the work order may
be closed, ending all further activity.
Work Order Receipts to Stock

17. Where Do We Go From Here?
Today we covered the Work Order segment of manufacturing… building
parts and assemblies in-house. This satisfies the MRP demands for
manufactured items. What’s still to come?
• Inventory
– Maintains current balances of direct material
– Provides means to issue material as needed to work orders and subcontract
purchase orders.
– Includes ability to monitor inventory records for accuracy.
• Order Entry
– Feeds the ‘demand’ side of ERP from the customer base.
– Maintains customers, products, orders, etc
• Standard Costs
– Setting and maintaining standard costs for parts/assemblies/finished goods.
– Using simulated costs for future planning.
And much more…..

18. Q&A
www.rootstock.com
888.524.0123
marketing@rootstock.com

19. The ERP 101 Webinar Series
Date Topic
Aug 2, 2016 An Introduction to ERP for Manufacturing
Aug 16, 2016 Engineering – Learn how to create Part Master Records and Bills of Material
Aug 30, 2016 Engineering – Learn how Change Orders and/or Revisions ensures that ERP system data is
accurate and up-to-date
Oct 11, 2016 Shop Floor – Explore how ERP is used to create and maintain Work Centers, Routings and
Procedures
Nov 1, 2016 Shop Floor – See how scheduling the Shop Floor through ERP controls Labor and Machines
Nov 29, 2016 Procurement – Link your Vendors and Purchased Parts via ERP
Dec 13, 2016 MRP – Step through an overview of this vital ERP subset
Jan 24, 2017 Work Orders – The starting point of manufacturing
Feb 14, 2017 Inventory - Maintaining Accurate and Reliable Data
TBA Sales – See how you can link your Customers and Products via ERP
TBA Manufacturing Accounting – An overview using standard cost
TBA Manufacturing Accounting – An overview using weighted cost