Production order definition
/What is a Production Order?
A production order is a document that states the number of units to be manufactured, the date when the order is released for production, and where the units should be delivered once they have been completed. A production order may be triggered by a long-term plan to maintain certain inventory levels, or by the receipt of an order from a customer. When a production order is issued, a downstream effect is for the production software to reserve the on-hand raw materials required for the order, and/or to automatically place purchase orders for these materials if there is not enough of them on hand to support the order.
The release of a production order is contingent upon the availability of materials, as well as capacity within the production process. It may also be contingent upon the availability of skilled labor.
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The Difference Between a Production Order and a Requisition Order
A production order is an internal document used by a manufacturing company to authorize the production of a specific quantity of a product, detailing the materials, labor, and processes required to complete the job. It initiates and tracks the manufacturing process from start to finish within the production department. In contrast, a requisition order is a request to purchase or issue materials, supplies, or services needed either for production or other operational purposes. It is typically sent from a department to the purchasing or inventory control team to ensure necessary resources are available. While a production order focuses on manufacturing output, a requisition order focuses on acquiring the inputs needed to support production or business operations.