Order to Cash Cycle with Master Planning and Production Order – MS Dynamics 365 For Operations

Order to Cash Cycle with Master Planning and Production Order – MS Dynamics 365 For Operations

In this blog, we will demonstrate three processes together:

  • Order To cash
  • Master Planning
  • Production control and execution

Process Flow:

Process Flow

Let’s say that ABC Company receives a make-to-order request from a customer. The sales manager creates a sales Order for 10 quantities and the production in-charge runs master planning and schedules production order against it. On completion of the production process, final inventory is transferred to the warehouse from where it will be dispatched to the customer. Now, let’s take this scenarios step-by-step in Microsoft Dynamics 365.

Note: In this scenario, we have taken finished goods type as a formula to explain the concept. We also touch upon the concept of co-products and have divided “cost of production” between finished products and co-products in the ratio of 90:10.


  1. Go to Sales & Marketing
  2. Click All Sales Orders.

  3. Process Flow

  4. Select the customer from drop down.
  5. Enter the “site” and “warehouse”
  6. Click Ok.

  7. Process Flow

  8. Sales order form will be opened.
  9. Click Add line for creating a sale order line.
  10. Select the Item and its variant type.
  11. Enter the Quantity.
  12. Confirm the sales order.

  13. Process Flow

    At this stage, the on-hand quantity of sales item is zero.

    Process Flow

    In our scenario, master planning will be run to suggest a planned order against sales order. To run Master planning:

  14. 11. Go to Master Planning.
  15. Run Master Planning.

  16. Process Flow

  17. Select the type of Master plan.
  18. Click ok.

  19. Process Flow

    Process Flow

  20. Go to Planned Orders.

  21. Process Flow

  22. Search the item through “item number” or “plan type”.
  23. Select Planned Order and Click “Firm” to convert the planned order into a production order.

  24. Process Flow

  25. Go to “All Production Orders” to proceed with the production order.

  26. Process Flow

  27. Search the Production order.
  28. System will automatically mark the Production order status to “Schedules”.

  29. Process Flow

  30. For checking the total cost of production. Go to Manage cost and click View Calculation Detail.

  31. Process Flow

  32. Click Costing sheet.

  33. Process Flow

  34. If the user wants to check the Co-Product cost amount, Click “Co product”.

  35. Process Flow

  36. Then click “costing sheet”.

  37. Process Flow

    User can schedule the job by following the below step.

  38. Go to schedule.
  39. Click schedule job.
  40. System will check the resource capacity and schedule the job as per the resource capacity.

  41. Process Flow

  42. User can see the completion time of production order through Gantt Chart.

  43. Process Flow

  44. Release the production order.

  45. Process Flow

    Process Flow

  46. System will mark the production status to released.
  47. Now user can start the production order.
  48. Click Start.

  49. Process Flow

  50. Enter the starting quantity.
  51. Select the From operation and To operation.
  52. Mark start production order.

  53. Process Flow

    Two journals will be created by system as the Production start process will be completed as below:

    • Picking journal (For consuming the raw material).
    • Route Journal (For Labor working hours).

    User has to post these journals manually one by one before performing the report as finished operation.

  54. Go to View.
  55. Click Picking List.

  56. Process Flow

  57. Select the warehouse of raw material.
  58. Click Post.

  59. Process Flow

  60. Now come back to view tab.
  61. Click Route.

  62. Process Flow

  63. Enter the number of quantity produced.
  64. Mark the operation completed.
  65. Click Post.

  66. Process Flow

    Now user is able to Performed the Report of finished operation.

  67. Go to Production Order.
  68. Click Report as finished.

  69. Process Flow

  70. Enter the Goods Quantity.
  71. Mark the End job.
  72. Click Ok

  73. Process Flow

    As the Report as, finished journal will post. System will mark the production status to “Report as finished” and create a quarantine order automatically if the quarantine check box is mark in item model group.

  74. Go to Inventory Management.
  75. Click Quarantine order.

  76. Process Flow

  77. Select the Quarantine order.

  78. User can also run quality order against of production order, but in my scenario, I just ran the quarantine order process. To finish the quarantine order.

  79. Click report as finished and End.

  80. User can also split the quarantine order in partial quantity as well.

    Process Flow

    Now Performed the end operation.

  81. Go to production Order.
  82. Click End.

  83. Process Flow

  84. Mark the Report as finished.
  85. Click Ok.

  86. Process Flow

    So, the production process against of sales order has completed and the production order has marked to end as shown in pic.

    Process Flow

  87. Go to check the on-hand inventory.

  88. We can see here the available quantity is the same as we produced through the production order.

    Process Flow

    Now the next step is to move produced quantity from production warehouse to dispatched warehouse. It can be done by following two methods:

    • Transfer Journal
    • Transfer Order.

    I’m using the transfer journal option to move item from production warehouse to dispatched warehouse.

  89. Go to Inventory Management.
  90. Click Transfer.

  91. Process Flow

  92. Select the journal.
  93. Click Ok.

  94. Process Flow

  95. Click New to create journal line.
  96. Select the Item.
  97. Enter the transfer quantity.

  98. Process Flow

  99. In Line detail, select the from Warehouse (Production Warehouse) and to warehouse and another inventory dimension.

  100. Process Flow

  101. Now post the journal to transfer the Goods from production warehouse To Dispatched Warehouse

  102. Finally, the goods have come to the dispatched warehouse and order can now ready to dispatch.

    Process Flow

  103. Go to sales and marketing.

  104. Process Flow

  105. Select the sales order.
  106. Click Pack.
  107. Enter the Delivered Quantity.
  108. Click Post.

  109. Process Flow

    Process Flow

    For Posting the invoice

  110. Go to Invoice tab.
  111. Click Invoice.

  112. Process Flow

  113. Click Ok.

  114. Process Flow

  115. Now collect the payment against of invoice

  116. Process Flow

  117. Select the Journal and Click line

  118. Process Flow

  119. Select the Customer Account
  120. .
  121. Click Settle transaction.

  122. Process Flow

  123. Mark the Invoice
  124. Click Ok.

  125. Process Flow

  126. Select the offset type
  127. Select the offset account
  128. Click Validate
  129. Click Post

  130. Process Flow

Shoaib Hussain's picture
Business Analyst at Systems limited with 2 year of implementation experience in Microsoft Dynamics AX 2012 and Microsoft Dynamic 365. Shoaib has implementation experience in Retail, Supply Chain, Production and Finance module. Shoaib is based in Karachi.

Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Systems Limited, or any other entity related to Systems Limited.

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