Workflow for Make to Order
This article gives an overview of the basic Make to Order workflow in Katana. It explains how to approach the flow between sales ("Sell"), manufacturing ("Make") and purchasing ("Buy") in a Make to Order use case.
Note: If you are keeping safety stock levels for all products and apply a Make to Stock approach, we suggest reading this article. If you are using a mixed approach of Make to Stock and Make to Order, then refer to this article.
In a Make to Order (MTO) situation, a company starts making the product only when a customer order is received, and no products are kept in stock.
Step 1 – Sales order
A Make to Order flow typically starts from receiving a customer order. All new Sales Orders appear in the "Sell" screen. Sales Orders can either be synced from your e-commerce channels (e.g. Shopify) or created in Katana manually.
In the "Sell" screen, you can track the status of all Sales Orders. You can track the Product Availability, Material Availability, Production status and Delivery status for each order. Read more about Using the Sell screen.
In a Make to Order situation, the Product Availability would typically show "Not available" as you are not keeping any products in stock for immediate delivery.
Material Availability status indicates whether all the materials required to make the ordered products are "In stock", "Expected" or "Not available". You can open a Sales Order and click on a Material Availability status for any missing product to see a more detailed missing materials list.
You need to start making the products to fulfill the order.
Step 2 – Schedule a production for the required products
Click on the "Make to order" button in the Production column in the "Sell" screen. This will create Manufacturing Orders for all the products required by the Sales Order. The Production status for the Sales Order will change to "Not started" and the Product Availability will change to "Expected".
Note that you can create a Manufacturing Order for each product on required by a Sales Order separately by opening the Sales Order and clicking on "Make to order" at the end of the specific Sales Order line.
Manufacturing Orders will be added to the "Schedule" in the "Make" screen. This is the production schedule for your workshop, listing all Manufacturing Orders for products that need to be made. You can drag-and-drop orders to change production priorities. Read more about Using the Schedule.
A Manufacturing Order created via the "Make to order" button in the "Sell" screen will be automatically linked to the related Sales Order. This means that the priority of orders is also linked between the "Sell" and "Make" screens. When you drag-and-drop Sales Orders to change the priority, then the priority of linked Manufacturing Orders in the "Schedule" will be updated accordingly, and vice versa.
Step 3 – Track material requirements
To manage material requirements, you need to create Product Recipes for Products. This enables tracking Material Availability statuses for products on Sales and Manufacturing Orders.
Click on a Manufacturing Order in the "Schedule" to see a detailed ingredients list and Material Availability at an ingredient level. Or open a Sales Order and click on a Material Availability status for any product for which the Product Availablity status is "Not Available", which will give you a list of materials missing for making the missing product.
Material Availability status indicates whether you have the required materials "In stock", "Expected" from suppliers or "Not available".
Note: Even when a company makes products to order, many businesses typically keep a certain amount of raw materials in stock to satisfy forecasted production needs. We suggest using Reorder Points for materials in Katana to ensure an optimal stock level for materials at all times. Here’s How to set Reorder Points and How to calculate appropriate Reorder Points.
If the Material Availability status for any materials is "Not available" you need to purchase the missing materials.
Step 4 – Purchase the missing materials
Click on a Manufacturing Order to see the required ingredients list based on the Product Recipe. Create a new Purchase Order by clicking on the "+ icon" at end of the ingredient line or by clicking on the global "+" sign and selecting "+ Buy materials".
Materials can be purchased also from the missing materials list for a product that is not available for a Sales Order. Click on the Material Availability status on a Sales Order to open the missing materials list.
You can also create Purchase Orders from the Inventory list in the "Stock" screen in Katana. In the Inventory list, you can see stock level differences from optimal levels for all materials based on the total in stock, required and ordered quantities for the entire workshop. Read more about Understanding the Inventory list.
Purchase Orders are added to the "Buy" screen in Katana. Here you can manage the Delivery status for all Purchase Orders.
Purchase Orders are not permanently linked to any orders. Material Availability status always considers the priority of orders, which can be changed by drag-and-dropping orders in the "Sell" screen or in the "Schedule" view. Even when you have a certain amount of the required ingredient in stock, the Material Availability for an order might still show "Not available" if another higher priority order also needs the same ingredient. Changing the priority of orders triggers Material Availability recalculations.
Purchase Orders cannot be sent directly from Katana to the supplier. Create a PDF of the Purchase Order by clicking on the "Print" icon at the top corner of the Purchase Order card. Then attach it an e-mail and send it out using your preferred e-mail service provider.
Step 5 – Receive the materials
When the materials arrive in your warehouse, mark Purchase Orders as "Received" and materials will be added to your stock. The Material Availability status for an order will change to "In stock" when you have all the required ingredients in stock. You can now start making the product.
Step 6 – Make the product
You should typically drag orders with Material Availability of "In stock" to the top of the list as you have all the needed ingredients to start making these products (unless you can start making the product even before all materials arrive).
When you start making a product, change the Production status of the Manufacturing Order to "Work in progress". You can also manage the Production status at a more detailed Production Operations level. Read more about Managing the production process, Production Operation statuses, and Managing work orders for Resources.
When the production is finished, mark the Manufacturing Order as "Done". The product will be added to your stock. These specific items will still be linked to the underlying Sales Order (i.e. items made by a Manufacturing Order that was linked to the Sales Order).
Step 7 – Ship out the product
The Product Availability status for a Sales Order in the "Sell" screen will change to "In stock" when the production for all the required products is finished. You can now ship out the order.
If you wish to track products that are packed but not yet shipped out, mark the Delivery status for a Sales Order as "Packed". When products are shipped out, mark the Sales Order as "Delivered".
That’s it! You have fulfilled a customer order.