What is Work Order?
An authorization to perform a specific manufacturing, assembly, or maintenance task, listing the materials, operations, and resources required.
Definition
A work order is a formal instruction to carry out a defined job, specifying what is to be made or done, the quantity, the materials to consume, the operations and work centers involved, and the due date. In manufacturing it authorizes the shop floor to build a product, drawing components from a bill of materials and following a routing of operations. The term is sometimes used interchangeably with production order, though some systems and industries distinguish them, with work order often used more broadly to also cover maintenance and service jobs. A work order accumulates actual material, labor, and overhead costs as it progresses, then closes out against the finished output.
How Work Order Works in ERP
When an ERP releases a work order, it allocates the required components from the BOM, schedules operations against work centers per the routing, and creates a cost collector for the job. Operators report material issues, labor and machine time, scrap, and completed quantities against the order, and the system updates inventory and work-in-process balances in real time. On completion, the ERP backflushes or confirms consumption, receives finished goods, and calculates the actual versus standard cost variance.
ERP Vendors with Strong Work Order
Frequently Asked Questions
What is the difference between a work order and a production order?
The terms are often used interchangeably, and in many ERPs they mean the same thing: an authorization to manufacture a quantity of an item. Where a distinction exists, production order tends to refer specifically to factory production runs, while work order is the broader term that can also cover maintenance, service, or rework jobs. Always check how your chosen ERP defines the terms, since usage varies by vendor.
What information does a work order contain?
A typical work order lists the item to produce, the quantity, the bill of materials components to consume, the routing of operations and work centers, the due date, and the order priority. As work progresses it captures actual material issues, labor and machine hours, scrap, and completed units. This data lets the ERP track work-in-process value and compare actual to standard cost when the order closes.