Production & Manufacturing
A Production Order is a document or digital record that authorizes and controls the manufacturing of a specific quantity of a product.
Full Definition
A Production Order serves as the official instruction to the production team to begin manufacturing a particular item. It details what needs to be made, the quantity, the required raw materials (often linked to a Bill of Materials), the production steps, and the scheduled completion date. For CPG brands, it's crucial for coordinating resources, tracking progress, and ensuring that finished goods are produced according to specifications and demand forecasts.
Why It Matters for CPG Brands
For CPG brand operators, Production Orders are vital for efficient operations, helping to ensure that the right products are made at the right time and in the right quantities. They enable accurate inventory management of raw materials and finished goods, prevent stockouts or overproduction, and ultimately impact profitability by optimizing production costs.
In CPG Operations
In CPG manufacturing, a Production Order might be issued to produce a new batch of a popular snack bar flavor. It would specify the quantity of bars, list all ingredients like oats, nuts, and chocolate chips, outline the mixing, baking, and packaging steps, and assign a unique lot number for traceability purposes.
Example
A small organic juice brand producing three SKUs of cold-pressed juice uses a Production Order for each batch. This order specifies the exact volume of each fruit and vegetable required, the bottling schedule, and the number of cases to be produced, ensuring consistent product quality and efficient use of ingredients.
Manage Production Order with Guidance
Guidance is the operations platform built for CPG brands. Replace your spreadsheets with one connected system for purchasing, production, inventory, COGS, and compliance.
Apply as a Design Partner
Frequently Asked Questions
What's the main difference between a Production Order and a Purchase Order?
A Production Order is an internal document authorizing your team or co-packer to make a product, detailing the manufacturing process. A Purchase Order is an external document sent to a supplier to buy raw materials or finished goods from them.
How does a Production Order help with inventory management?
It helps by clearly outlining the raw materials needed for a specific production run, allowing you to allocate them from inventory. Once production is complete, it adds the resulting finished goods to your inventory, providing an accurate count of what's available.
Can I use Production Orders if I work with a co-packer?
Yes, absolutely. While your co-packer manages the physical production, you'll still use Production Orders to communicate exactly what you need them to produce, in what quantity, and by when. It's crucial for clear communication and tracking the output from your co-packer.