Friday, 27 April 2012

What is a Work Order?

Work orders from OfficeBooks
If you've been in business a long time, you can take some of the lingo for granted.  I can remember the moment during my first few weeks in a manufacturing environment when I realized "everything is an order".  We got purchase orders from our customers, so we created sales orders in our system, and the operations people created work orders to get the products built.  The supply chain group would issue their own purchase orders to our suppliers to get materials for the newly created work orders.  I'm guessing it's some vestige of post-war management.  In the military, if you want something done, you issue an order.

So - what are work orders?  There are several types, but they all generally fall into two categories: manufacturing work orders and service work orders.

Manufacturing work orders are used to get products built by your manufacturing group.   Generally speaking, it's a document that shows the employee the product to be built, the quantity to build, and the due date for completion.  The work order usually includes (or is accompanied by) a BOM (bill of materials) for the product.  The manufacturing staff can use the BOM to gather the required components from your inventory (a process called picking).

From a systems standpoint, work orders are a means of converting the inventories of components into inventories of finished goods (the product).  So when a work order is completed, the system removes the appropriate quantities of the components from inventory and adds the completed quantity of product to your inventory.

Service work orders are quite similar, but they tend to have no bill of materials (or a very simple bill of materials).  Service work orders are common for plumbing, electrical, or maintenance and repair operations. For example, the dispatcher at a plumbing company gets a call from a customer with no hot water.  She would issue a work order to one of the plumbers to go to check it out.

Service work orders are intended primarily to track your labor and link it to the associated invoice.  The plumber in the example would complete his hot water tank repair and get the customer to sign the work order document.  He'd then hand the work order back to the dispatcher when he returned to the office.

Systems like OfficeBooks can be used to issue both service work orders and manufacturing work orders.

I've created this sample work order using OfficeBooks.  You can also click here to download a sample work order in PDF format.
Sample Work Order from OfficeBooks

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