Workflow for Make to Stock
This article gives an overview of the basic Make to Stock workflow in Katana. It explains how to approach the flow in sales ("Sell"), manufacturing ("Make"), purchasing ("Buy") and inventory ("Stock") in a Make to Stock use case.
Note: If you are making all products to order, 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.
Make to Stock (MTS) approach means keeping a certain number of products in stock to ensure faster delivery and/or increase production efficiency. When a customer order is received, a company aims to already have the required products in stock for immediate delivery. Products are typically made in bulk to meet future sales needs.
Step 1 – Schedule production for products
A Make to Stock flow typically starts from making the products in the required amount based on demand. In Katana, optimal stock levels for products can be managed using Reorder Points.
Note: It is not possible to create or enter sales forecasts in Katana, but using Reorder Points fulfills the same purpose. Here’s How to set Reorder Points and How to calculate appropriate Reorder Points.
If you are making to stock, we suggest using the "Missing/Excess" value in the "Stock" screen to determine the right quantity of products to make. "Missing/Excess" is calculated based on all open Sales Orders, Manufacturing Orders and Reorder Points for each product. Use the "+ Make" button for a product directly in the "Stock" screen to create a Manufacturing Order for the missing quantity of a product. Read more about Understanding the Stock screen.
You can also Make to Stock by clicking on the global "+" sign and selecting "+ Make to stock". This will open a new Manufacturing Order card where you can select a product and a quantity to make.
All Manufacturing Orders are added to "Schedule" in the "Make" screen. This is the production schedule for your product-making business. You can drag-and-drop orders to change production priorities. Read more about Using the Schedule.
A Manufacturing Order that is making to stock is not linked to any Sales Orders. Sales Orders (for which you are not Making to Order) book products based on Sales Order priorities. Read more about Using the Sell screen.
Step 2 – Track material requirements
To manage material requirements, you need to create Product Recipes for products. In "Schedule", you can see the Material Availability status for each Manufacturing Order. This indicates whether you have the required raw materials "In stock", "Expected" from suppliers or "Not available".
We suggest using Reorder Points for materials in Katana to ensure an optimal stock level for materials at all times.
Note: 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 3 – 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 "+ Buy" at end of the ingredient line or by clicking on the global "+" sign and selecting "+ Buy materials".
You can also create Purchase Orders from the "Inventory" list in the "Stock" screen. Just like with products, keep your eye on the "Missing/Excess" quantity. It is calculated based on all open Manufacturing Orders, Purchase Orders and Reorder Points for each material. Use the "+ Buy" button for a material directly in the "Stock" screen to create a Purchase Order for the missing quantity of a material. Read more about Understanding the Stock screen.
Purchase Orders are added to the "Buy" screen in Katana. Here you can manage the Delivery status for all Purchase Orders.
Purchase Orders do not have permanent links to any orders. Material Availability status considers the order of priority of Manufacturing and Sales Orders, which can be changed by drag-and-dropping the orders. 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 4 – 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 a Manufacturing Order in "Schedule" will change to "In stock" when you have all the required ingredients in stock. You can now start making the product.
Step 5 – Make the product
In "Schedule", you should typically drag the Manufacturing 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. Those items will not be linked any specific Sales Orders and can be used by various Sales Orders that require the product.
Step 6 – Sales Order
Sales Orders can either be synced from your e-commerce channels (e.g. Shopify) or created in Katana manually. All new Sales Orders appear in the "Sell" screen.
In the "Sell" screen, you can track the status of all Sales Orders. You can track the Product Availability, Production status and Delivery status for each order. Read more about Using the Sell screen.
In a Make to Stock situation, the Product Availability for Sales Orders should show "In stock" if you are managing the optimal level of product stock for immediate delivery.
Sales Orders (for which you are not Making to Order) book products based on Sales Order priorities (similar to how Manufacturing Orders book materials). Product Availability status considers the order of priority of Sales Orders, which can be changed by drag-and-dropping Sales Orders. Even when you have a certain amount of the required product in stock, the Product Availability for a Sales Order might still show "Not available" if another higher priority Sales Order also needs the same product. Changing the priority of Sales Orders triggers Product Availability recalculations.
Note: Even if the Product Availability status for a Sales Order in the "Sell" screen shows "In stock" (i.e. there are enough products already in stock) or "Expected" (i.e. products are already being Made to Stock), you can still click on "Make to order" button in the Production column to create a new Manufacturing Order specifically for this Sales Order. The new Manufacturing Order will be linked directly to the Sales Order. The priority of this Sales Order and the related Manufacturing Order is then synced between "Sell" and "Make" screens. When you drag-and-drop the Sales Order to change the priority, then the priority of the linked Manufacturing Order in the "Schedule" will be updated accordingly, and vice versa.
Step 7 – Ship out the product
If the Product Availability status indicates "In stock", you can ship out the Sales 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".