One of the issues I see from time to time with companies who are using Epicor’s Prophet 21 ERP system is confusion about when to use Production Orders vs. Secondary Process.  I can see where there might be some murky waters there, since at the core, both transactions are capable of turning one thing into another thing.  Is one transaction better than another?  As usual, I am going with my favorite answer: it depends.

Prophet 21 Secondary Process

Secondary process, or Process Transaction, converts one raw material item into one finished item.  It’s a fairly basic, and straightforward transaction.  Process transactions can have multiple steps, and all process transactions must have at least 1 step.  The user advances the process transaction from one step to the next with a function in the transaction called Move Material.  Once the material moves out of the last step, you then receive it into inventory.

An additional feature of the process transaction is that the steps do not have to occur inside the company.  A process step can be set up as an outside service process, triggering a Process Purchase Order.  Receipt of the process purchase order allows the user to move it through that process step and into the next one.  Process transactions also allow cost additions to a step, which add to the cost of the finish good, and apply a credit to a labor and overhead offset account.

Production Orders in P21

Production orders also allow you to to item conversion.  Unlike secondary process, production orders are driven by an assembly.  Assemblies contain one or more components that get consumed in the production order to create the finished kit.  If you are building an item with more than one component, you will have to use a production order.  Also different from a process transaction, a production order does not have steps.  It is an instant transaction, meaning that the finished item transforms from not started to finished in a single step.

Production orders have additional flexibility with regards to processing.  There is a picking process from the production order components.  This can be set to either manual picking or automatic confirmation depending on your company’s preference.  While processing production orders,  users also have the option to use the Production Order Queue and Expediting Inquiry features to manage components and production orders from a bird’s eye type of view.

So What Is Light Manufacturing Then?

The simple explanation: Light Manufacturing is the convergence of secondary process and production orders, plus a whole lot more functionality and granularity on how an assembly is built.  There are options for time tracking, labor, and assignment of technicians/workers to an order.  However, the bottom line is, with light manufacturing, you can add process steps to a production order transaction.  This allows you to make an assembly work more like a process transaction, while retaining the ability to have multiple components.  This is particularly useful when your kitting process requires an outside step to complete the kit.

How Do I Choose?

Choosing the transaction type is really about picking the one that makes the most sense.  I always advise choosing the transaction that most closely represents what is physically happening in your company.  Choosing this way helps keep things somewhat intuitive for the users who deal with these transactions on a daily basis.  That said, there are some hard fast rules that, at this point, lock you in to one transaction versus another.  These include:

• If you build something with more than one component, you should use production orders.  Process transactions cannot have multiple components morphing into one finished item.
• If you need to move through a series of multiple steps, then you will need a process transaction.  Production orders do not have steps, they are either incomplete or complete.
• A build operation requiring an outside service and purchase order must happen in secondary process.

The easiest way to remember it is that process transactions convert one item into another.  If you are cutting up raw material to make finished goods via a series of steps, it is a process transaction.  If you are sending an item out to have it painted or otherwise reworked, it is also a process transaction.  Production orders are all about kitting.  If you want to take several different items and package or assemble them into a kit or a built item, then it is a production order.

If you cannot choose and need key elements of each transaction, then it may be time to look into light manufacturing.  This module extends the functionality of the production order, which you can use or not as your requirements dictate.