Stock Reservation for Production Plan

Note: This feature is available from ERPNext Version 16.

Stock Reservation for Production Plans enables manufacturers to reserve the required raw materials and sub-assembly items before the manufacturing process begins. This ensures that the necessary inventory is available for production and prevents reserved materials from being allocated to other manufacturing or inventory transactions.

By reserving stock at the Production Plan level, ERPNext helps organizations improve production planning, secure inventory for future manufacturing, and ensure that purchased materials are utilized exclusively for the intended Production Plan.

How Stock Reservation Works

Stock Reservation begins at the Production Plan stage, allowing manufacturers to secure both raw materials and sub-assembly items before Work Orders are created.

When stock is available, ERPNext automatically reserves the required inventory. If materials are unavailable, the system guides users through the procurement and manufacturing process to ensure inventory becomes available and is reserved as soon as it is received or produced.

Enabling Stock Reservation

Before using this feature, Stock Reservation must be enabled in the Stock Settings.

1. Navigate to Stock Settings.
2. Enable the Enable Stock Reservation option.
3. Save the settings.

After enabling this option, the Reserve Stock checkbox becomes available while creating or editing a Production Plan.

Reserving Stock from a Production Plan

Users can reserve inventory directly from the Production Plan.

1. Create or open a Production Plan.
2. Enable the Reserve Stock checkbox.
3. Submit the Production Plan.

Upon submission, ERPNext checks the availability of the required inventory.

• If the required raw materials are available, the system automatically creates Stock Reservation Entries.
• If the required sub-assembly items are available, they are also reserved automatically.

This ensures that all available inventory required for production is immediately allocated to the Production Plan.

Handling Material Shortages

If sufficient inventory is not available, ERPNext helps users procure or manufacture the missing materials.

Sub-Assembly Items

If the required sub-assembly items are unavailable, users need to create the corresponding Work Orders to manufacture those components.

Once the sub-assemblies are produced, they become available for the Production Plan.

Raw Materials

If raw materials are unavailable, users should create Purchase Material Requests from the Production Plan.

After the requested materials are purchased and received into inventory, ERPNext automatically reserves them against the respective Production Plan.

Using Reserved Materials

After inventory has been reserved, the reserved materials are used exclusively for the manufacturing activities associated with the Production Plan.

When Work Orders are generated from the Production Plan:

• The reserved raw materials are allocated to those Work Orders.
• The reserved sub-assembly items are also utilized during manufacturing.
• Other Production Plans or manufacturing processes cannot consume the reserved inventory.

This ensures accurate inventory allocation throughout the production lifecycle.

Production Plan Reservation Flow

The overall reservation process follows these stages:

1. Create a Production Plan.
2. Enable the Reserve Stock option.
3. ERPNext checks the availability of raw materials and sub-assemblies.
4. If inventory exists, Stock Reservation Entries are created automatically.
5. If inventory is unavailable, manufacture sub-assemblies through Work Orders and procure raw materials through Material Requests.
6. Purchased or manufactured inventory is automatically reserved against the Production Plan.
7. Reserved inventory is consumed only by the Work Orders linked to that Production Plan.

Business Benefits

• Secures raw materials before manufacturing begins.
• Automatically reserves available sub-assembly items and raw materials.
• Prevents reserved inventory from being used by other Production Plans.
• Integrates stock reservation with procurement and manufacturing workflows.
• Automatically reserves purchased materials upon receipt.
• Improves inventory planning and production scheduling.
• Ensures Work Orders receive the correct reserved inventory.
• Reduces production delays caused by material shortages.

Key Summary

Stock Reservation for Production Plans in ERPNext Version 16 enables manufacturers to reserve raw materials and sub-assembly items before production begins. Available inventory is automatically reserved, while unavailable materials can be procured or manufactured and are reserved once they become available. The reserved inventory is dedicated exclusively to the associated Production Plan and is used only by the Work Orders generated from that plan, ensuring accurate inventory allocation and efficient production planning.