Make-to-Stock Manufacturer
This pipeline models a business that buys raw materials, manufactures finished products, and sells them from stock. It exercises every module and both inventory ledgers, so it's the fullest illustration of how the pieces fit together.
Who it's for
A maker — someone who turns inputs into products. You purchase materials, convert them into products through a work order or production order, and fulfill customer sales orders from the finished goods you've built up.
Modules involved
- Purchase Orders → materials inventory
- Work Orders or Production Orders → both ledgers
- Sales Orders → finished-goods inventory
The end-to-end sequence
How stock flows
- Procure materials. A purchase order targeting materials posts an ORDER to the materials ledger when placed, then RECEIVE when it arrives. Materials are now on hand.
- Manufacture. A work or production order for a product reads its BOM. It posts DEMAND then ALLOCATE against the materials it needs, and an ORDER for the products it will make. On receipt of the finished product, it CONSUMEs the materials and PRODUCEs the finished goods — moving value from the materials ledger into the finished-goods ledger.
- Sell. A sales order posts DEMAND, then ALLOCATE, then CONSUME against finished goods as it advances from received to entered to shipped. The product leaves stock and the cycle is complete.
Variations
- Work order vs. production order. Use a work order when you own the materials and pay only for assembly; use a production order when you want the finished good costed end to end. See the comparison.
- Multi-level products. If a product's BOM includes sub-assembly SKUs, a work order consumes those component products from finished goods too — which is why work orders can touch both ledgers.
- Versus a reseller. The reseller pipeline drops the manufacturing step entirely and buys finished goods directly.