Production is different from all other operations in terms of stock. Stock increases with purchases and decreases with sales, while in production, it both decreases and increases at the same time.
The document that records this two-way movement is the production slip. When the slip is not issued, raw materials appear to be in excess in stock, while the finished product appears not to exist at all.
In this article, we explained how to issue a production slip, raw material consumption, finished product entry, scrap recording, and the stock result.
Table of Contents
What is a production slip?
A production slip is a document that records a completed production. It shows how much of which finished product was produced and what was consumed for it.
The slip generates two types of stock movements. An out movement is created for raw materials, and an in movement is created for the finished product.
These movements are connected to each other and originate from the same document. This connection is the basis for subsequent tracking.
The slip also generates a cost record. The cost of consumed raw materials is transferred to the produced finished product.
Operations in the production module are carried out and work together with the stock module.
Slip issuance workflow
The workflow starts with selecting the finished product to be produced and the quantity. These two pieces of information determine everything else.
The system calculates the required raw material quantities from the product's bill of materials and brings them to the slip as lines.
These lines are advisory and can be adjusted according to actual consumption. Following the bill of materials blindly creates stock discrepancies.
Next, the warehouse from which the raw materials will be issued and the warehouse into which the finished product will enter are selected.
When the slip is saved, stock movements are generated and the transaction is completed. We discussed the bill of materials structure in the bill of materials article.
Raw material consumption
Consumption lines form the outgoing movement on the stock side of production. Their accuracy affects all stock records.
The quantity coming from the bill of materials may differ from the quantity actually used. This difference must definitely be reflected in the slip.
Recurring differences indicate that the bill of materials needs to be updated. One-time differences are normal.
For materials subject to lot or batch tracking, the specific batch from which consumption took place must also be specified.
This information is the basis of traceability; you can refer to the batch lot tracking article.
Finished product entry
Finished product entry is the movement that adds the output of production to stock. The quantity must be the actual sound pieces produced.
Products that do not pass quality control should not be entered as finished goods. These must be tracked with a separate record.
The cost of the finished product is calculated from the cost of the consumed raw materials. This is the basis of sales pricing.
For products with serial number tracking, a number must be assigned to each produced unit.
The production date and expiration date, if any, should also be recorded at this stage.
Waste and scrap recording
Waste is inevitable in production and when not recorded, it appears as a stock discrepancy.
The waste allowance defined in the bill of materials represents the expected loss. Losses above expectations must be recorded separately.
Specifying the cause of waste paves the way for improvement studies. Losses of unknown cause cannot be reduced.
Products that turn into scrap must also be tracked separately. These are a different type of loss from raw material waste.
Periodic reporting of scrap rates is the most direct indicator of process quality.
Warehouse selection
Two different warehouses play a role in the production slip, and choosing them correctly determines stock reports.
Raw materials are generally consumed from the workshop warehouse. Direct consumption from the main warehouse hides intermediate movements.
Transfer from the main warehouse to the workshop must be done with a transfer slip. This distinction makes the amount of material in the workshop visible.
Finished goods, on the other hand, enter the finished goods warehouse. It is important to separate products ready for sale from products in the production area.
We discussed the warehouse structure in the warehouse groups article.
Partial production and work in progress
Not every production is completed at once. For jobs spanning multiple days, the recording method must be clarified.
One method is to issue slips for the completed quantity. This keeps stock data up to date daily.
The other method is to issue a single slip when production is complete. This is simpler, but stock appears misleading in the interim.
For long-running productions, the first method should be preferred; for short-term jobs, the second is sufficient.
If semi-finished product tracking is performed, intermediate stages are also recorded with separate slips.
Timing of slip issuance
When the slip is issued directly determines the currency of the stock data.
Issuing it on the day production is completed is ideal. Weekly batch recording does not support intra-day decisions.
Delayed records also rely on memory and the error rate increases. Consumption quantities start to be entered by estimation.
The habit of recording at the end of the shift is a practical routine for most workshops.
It should be possible to issue retroactive slips; however, this should be an exception and leave a trace.
Post-issuance checks
A few checks after the slip is issued ensure early detection of errors.
It must be checked whether raw material stocks have fallen into negative values. Negative stock indicates a missing entry record.
It must be verified that the finished product cost is within a reasonable range. Unexpected values indicate a quantity or unit error.
The gap between the recipe and actual consumption must also be monitored. A continuous gap requires a recipe update.
The stock statement is the screen where these checks are performed; stock statement article.
Points to consider
Canceling a receipt reverses both-way stock movements simultaneously. Therefore, cancellation authority should be restricted.
Never adjusting the quantities coming from the recipe is also a risk; actual consumption is not always the same as the recipe.
Skipping the scrap record is the most common cause of stock discrepancy and accumulates over time.
Leaving the warehouse selection as default is also a common mistake; the wrong warehouse ruins all reports.
The simplicity of the entry screen directly affects recording discipline in the workshop environment.
Frequently asked questions
Can a receipt be issued for a product without a recipe?
It can be issued; consumption lines are entered manually. However, defining a recipe for repeated productions is much more efficient.
Can a production receipt be issued retroactively?
It can be issued; however, it is recommended to tie it to authorization and leave an audit trail, otherwise stock history loses its reliability.
How is the finished product cost calculated?
Consumed raw material costs are summed up; labor and overhead distribution are done through separate methods.
How is a receipt issued in subcontracted manufacturing?
A different workflow is required; subcontracted manufacturing tracking article.
The production receipt is the sole source of stock and cost data on the production side. Every unissued receipt disrupts two separate records at once.
Issue the receipt on the day production is completed. Delayed records begin to rely on memory, and the error rate increases rapidly.
Also adjust the quantities coming from the recipe according to actual consumption; blindly accepted suggestions generate stock discrepancies.
Do not skip the scrap record. Unrecorded scrap appears at the end of the month as an unexplained stock discrepancy.
Don't leave the warehouse selection as default either; separating the workshop and the main warehouse is the foundation of material visibility.
By consulting with the EQLEM team, you can plan your production record flow.