Production Plan

Production Plan is a planning tool in ERPNext that helps manufacturers organize production and material procurement based on customer demand or internal requirements. It consolidates production requirements from multiple Sales Orders or Material Requests into a single plan, making it easier to schedule manufacturing activities and procure the required raw materials.

Besides planning finished goods, the Production Plan also assists in generating Work Orders, Material Requests, and procurement plans for sub-assemblies and raw materials, ensuring smooth production execution.

Prerequisites

Before creating a Production Plan, ensure the following records are available:

• Item
• Material Request
• Sales Order
• Bill of Materials (BOM)
• Routing (if applicable)

Creating a Production Plan

A Production Plan can be created using customer demand, internal material requests, or by manually selecting items for manufacturing.

1. Create a new Production Plan.
2. Select the source for production planning.
3. Generate the manufacturing items.
4. Review sub-assemblies and raw materials.
5. Submit the Production Plan.

ERPNext supports three different methods of creating a Production Plan.

Production Planning from Sales Orders

This option is used when production is driven by customer orders.

Users can select Sales Order as the source and apply filters such as customer, company, date range, or other criteria to retrieve the required Sales Orders.

After fetching the Sales Orders, ERPNext retrieves all manufacturable items that have an active Bill of Materials.

The system then prepares the production quantities required to fulfill the selected customer orders.

Include Exploded Items

While reviewing the items to manufacture, users can enable Include Exploded Items.

This expands the BOM and includes the raw materials of sub-assembly items directly in the production planning process.

Consolidating Production Items

If multiple Sales Orders contain the same manufactured item with the same BOM, enabling Consolidate Items combines them into a single production entry with the total required quantity.

This simplifies production planning and reduces the number of Work Orders required.

Production Planning from Material Requests

Production Plans can also be created based on internal Material Requests.

This approach is useful when manufacturing demand originates from internal departments instead of customer sales.

After selecting Material Request as the source:

• Retrieve the required Material Requests using the available filters.
• Fetch the manufacturing items.
• Generate the production quantities based on those requests.

Manual Production Planning

Users can also create a Production Plan manually by directly adding the items that need to be manufactured without referencing Sales Orders or Material Requests.

This method is useful for inventory replenishment, forecast-based production, or custom manufacturing requirements.

Planning Sub-Assembly Items

ERPNext can automatically identify sub-assemblies required for manufacturing finished products.

By selecting Get Sub Assembly Items, the system analyzes the BOM and retrieves every sub-assembly needed for production.

This allows manufacturers to plan the production or procurement of intermediate components before beginning final assembly.

Manufacturing Type

Each sub-assembly can be assigned a manufacturing method depending on how it will be produced.

ERPNext supports the following manufacturing types:

• In House – Manufacture internally using Work Orders.
• Subcontract – Create a Subcontract Purchase Order.
• Material Request – Purchase the sub-assembly instead of manufacturing it.

This provides flexibility in deciding how each component should be sourced.

Combining Sub-Assembly Items

When multiple finished products require the same sub-assembly, ERPNext can consolidate those requirements into a single production entry.

Sub-assemblies are combined when they share the same:

• Item
• Warehouse
• BOM
• Manufacturing Type

This enables bulk production of common sub-assemblies and reduces duplicate Work Orders.

Skipping Available Stock

Production planning can consider the existing projected stock before generating manufacturing requirements.

The following options are available:

• Skip Available Sub-Assembly Items
• Skip Available Raw Materials

When enabled, ERPNext calculates only the shortage quantity by considering the projected quantity available in inventory.

The calculation follows the formula:

Required Quantity = BOM Required Quantity − Projected Quantity

This prevents unnecessary manufacturing or purchasing of materials that are already available or expected to be available.

Planning Raw Material Procurement

After determining the production requirements, ERPNext can calculate the raw materials needed to complete the Production Plan.

Using Get Items for Purchase Only, the system prepares a procurement plan containing only the materials that need to be purchased.

If inventory already exists, ERPNext can automatically reduce the purchase quantity when Skip Available Raw Materials is enabled.

Purchase and Transfer Planning

When stock exists in another warehouse, users can select Get Items for Purchase / Transfer.

ERPNext checks the selected warehouse and its child warehouses to determine whether materials should be transferred internally or purchased externally.

This helps optimize inventory utilization across multiple warehouse locations.

Additional Procurement Options

The Production Plan includes several options that allow users to customize material planning.

• Include Non-Stock Items – Includes items that are not maintained in inventory.
• Include Subcontracted Items – Includes raw materials required for subcontracted operations.
• Skip Available Raw Materials – Considers projected inventory while calculating shortages.
• For Warehouse – Specifies the warehouse from which production materials will be consumed.

Downloading the Material Request Plan

ERPNext allows users to export the material procurement plan as an Excel file.

Users can select one or multiple warehouses before downloading the report.

The exported file contains:

• Required raw materials.
• Available stock.
• Required purchase quantities.
• Warehouse-wise planning information.

This report assists procurement teams in planning purchases efficiently.

After Submitting the Production Plan

Once the Production Plan is submitted, ERPNext enables the creation of manufacturing and procurement documents directly from the plan.

Users can generate:

• Work Orders for finished products.
• Work Orders for sub-assemblies.
• Subcontract Purchase Orders.
• Material Requests for purchasing raw materials.

These documents remain linked to the Production Plan, providing complete traceability throughout the manufacturing process.

Closing a Production Plan

In some situations, a Production Plan may no longer be required even though it has not been fully completed.

Users can change its status to Closed to prevent additional Work Orders or Material Requests from being created.

Common reasons for closing a Production Plan include:

• Production completed outside the plan.
• Manufacturing priorities changed.
• Remaining items are no longer required.

If needed, the Production Plan can later be reopened for further processing.

Creating Work Orders for Sub-Assemblies

When a sub-assembly is marked with the manufacturing type In House, ERPNext allows users to create Work Orders directly from the Production Plan.

Similarly, sub-assemblies marked for subcontracting or purchasing can be converted into Subcontract Purchase Orders or Material Requests respectively.

This enables complete production planning for every level of the manufacturing hierarchy from a single document.

Business Benefits

• Consolidates production requirements from multiple Sales Orders and Material Requests.
• Automatically plans finished goods, sub-assemblies, and raw materials.
• Supports in-house manufacturing, subcontracting, and procurement.
• Reduces duplicate Work Orders through item consolidation.
• Considers projected inventory before creating manufacturing or purchase requirements.
• Supports warehouse-based material transfer planning.
• Exports procurement plans for purchasing teams.
• Provides complete visibility into production and material planning from a single document.

Key Summary

Production Plan is ERPNext’s centralized manufacturing planning tool that combines production scheduling, sub-assembly planning, raw material procurement, and Work Order creation into a single workflow. By leveraging Sales Orders, Material Requests, projected inventory, and Bills of Materials, it helps manufacturers optimize production, minimize material shortages, and efficiently manage the entire manufacturing process.