How-ToFinance & Operations

How to Create and Manage Production Orders in Business Central

How to create a production order in Business Central, refresh it to populate lines, release it, post consumption and output, and finish the order.

Stein Sæstad
9 min read

A production order moves through several stages from creation to completion. At each stage you interact with different pages, the order header, component lines, routing lines, the consumption journal, and the output journal. This guide walks through the full lifecycle of a production order, from creating it to posting the finished goods.

Before You Start

To follow these steps, the item you are producing needs:

  • A Production BOM No. assigned on the Manufacturing tab of the item card, with the BOM in Certified status
  • A Routing No. assigned on the same tab, with the routing in Certified status
  • Replenishment System set to Prod. Order on the item card

Component items also need sufficient inventory, or you will see availability warnings when the order is refreshed.

Step 1: Create the Production Order

  1. Search for Firm Planned Production Orders using Alt + Q (or navigate via the Manufacturing menu).
  2. Select New.
  3. In the Source Type field, select Item.
  4. Enter the finished item number in the Source No. field.
  5. Set the Quantity to the number of units you want to produce.
  6. Enter a Due Date, this is when the finished goods are needed. Business Central uses this date to back-schedule operations based on routing times.
  7. Optionally, assign a Location Code if you want finished goods posted to a specific warehouse location.

You can also create a Released Production Order directly if production is starting immediately. The difference is that released orders make consumption and output journals available straight away.

Step 2: Refresh the Production Order

Refreshing populates the component lines and routing lines based on the item’s BOM and routing. Without this step, the order has no lines.

  1. On the production order, select Functions > Refresh Production Order from the action bar.
  2. A dialog appears with options:
    • Direction: Choose Back to schedule from the due date backwards, or Forward to schedule from today forwards.
    • Calculate Lines: Leave Routing and Component Need checked to populate both.
  3. Select OK.

After refreshing, open the Lines section of the order. You should see:

  • Component lines under the Components tab, one line per BOM component, with calculated quantities (including any scrap percentage from the BOM).
  • Routing lines under the Routing tab, one line per routing operation, with scheduled start and end times.

If lines do not appear, check that the BOM and routing are both Certified and correctly assigned to the item card.

Step 3: Release the Production Order

Releasing the order signals that production can begin. It also makes the consumption and output journals available for this order.

  1. On the production order, select Functions > Change Status.
  2. Choose Released and confirm.

The order now appears in the Released Production Orders list. From this point, you post actual material usage and output against it.

Step 4: Post Consumption (Materials Used)

The Consumption Journal records which components were actually used to produce the item. This reduces inventory for each component.

  1. Search for Consumption Journal using Alt + Q.
  2. Select Functions > Calc. Consumption to automatically populate lines based on the production order’s expected component quantities.
  3. In the dialog, enter the Production Order No. and select OK.
  1. Review the lines. The Quantity field shows the expected consumption. Adjust any quantities to reflect actual usage, for example, if a component was scrapped and more was used than planned.
  2. Confirm the Location Code and Bin Code fields if your setup uses bins.
  3. Select Post to record the consumption. Component inventory is reduced accordingly.

Step 5: Post Output (Finished Goods)

The Output Journal records the finished goods produced and the time spent on each routing operation.

  1. Search for Output Journal using Alt + Q.
  2. Select Functions > Explode Routing to populate lines from the production order routing.
  3. In the dialog, enter the Production Order No. and select OK.
  1. For each operation line, you can enter:
    • Setup Time and Run Time actuals (if different from the routing values)
    • Scrap Quantity, units that did not pass quality and should not be counted as output
  2. On the last operation line (or a separate output line), set the Output Quantity to the number of finished units produced.
  3. Select Post. Finished goods inventory increases, and routing operation times are recorded for costing.

The Production Journal: A Combined Alternative

If you prefer to post both consumption and output in one step, use the Production Journal instead of the separate consumption and output journals.

  1. Open the released production order.
  2. Select Production Journal from the action bar.
  3. The journal shows both component lines and routing/output lines together.
  4. Enter actual quantities and times, then post.

The production journal is convenient for simple orders. The separate journals give more control, particularly when consumption is posted before production is complete or when multiple operators post output for the same order at different times.

Step 6: Finish the Production Order

Once all consumption and output is posted, close out the order.

  1. Navigate to Released Production Orders and open the order.
  2. Select Functions > Change Status.
  3. Choose Finished and confirm.

Business Central now calculates the actual cost of the production order, material costs from posted consumption, capacity costs from posted output times, and compares this to the expected (standard) cost. Any difference is posted as a variance entry. This variance hits the relevant variance accounts defined in your inventory posting setup.

After finishing, the order moves to the Finished Production Orders list and can no longer be posted against.

Common Issues

Component lines are empty after refresh, the BOM is not certified, or the Production BOM No. is missing on the item card.

Routing lines are empty after refresh, the routing is not certified, or the Routing No. is missing on the item card.

Consumption journal shows no lines from Calc. Consumption, the production order may not be in Released status, or the component lines have already been fully consumed.

Output quantity does not increase finished goods inventory, check that the item’s Inventory Posting Group and the production posting setup include the correct accounts for finished goods.

With production orders running smoothly, the next area to consider is planning, making sure you produce the right quantities at the right time based on actual demand.

Learn how to plan production capacity and generate orders automatically in How to Use Capacity Planning in Business Central.