From Customer Demand to Finished Goods

How Structured Manufacturing Creates Control at Scale

Learn how SIX ManufacturingFlow connects production modes, BOMs, routings, warehouse operations, material picklists, shop-floor execution and quality control—turning even large-volume manufacturing into a visible, traceable and measurable business process.

Manufacturing is not one isolated activity. It is a chain of connected decisions that begins long before a machine starts and continues after the finished product leaves the production line.

A customer order, sales forecast or minimum-stock requirement creates demand. That demand must be translated into a production plan. Materials must be available, machines and employees must have sufficient capacity, work steps must happen in the correct order, and quality must be checked before the finished goods can enter inventory.

If one part of this process is disconnected, production becomes harder to control. A missing material can stop an entire line. An outdated Bill of Materials can result in the wrong product being manufactured. An unrealistic routing can overload one machine while another remains unused. A completed production order may appear profitable until waste, rework, machine time and actual labour costs are included.

SIX ManufacturingFlow connects these activities in one structured manufacturing process:

Demand → Planning → Materials → Picklist → Production → Quality → Finished Goods → Costing → Delivery

This creates a shared operational flow between sales, purchasing, warehouse, production, quality, finance and management.

Manufacturing begins with the production mode

Before a company can plan manufacturing correctly, it must understand what triggers production.

Some companies manufacture only after receiving a customer order. Others continuously produce standard products for stock. Many companies use both approaches, keeping common components available while delaying final assembly until the customer confirms the required configuration.

The production mode affects inventory, purchasing, planning, capacity, delivery promises and financial risk.

SIX ManufacturingFlow can support these modes within one connected planning environment. The company does not need to treat every product in the same way. Production logic can follow the real needs of each product family, customer group or manufacturing location.

Make-to-Stock: producing before the customer orders

In Make-to-Stock production, the company manufactures goods based on expected demand rather than a specific customer order.

Demand may come from:

• Sales forecasts
• Historical consumption
• Seasonal patterns
• Minimum and maximum stock levels
• Safety-stock requirements
• Reorder points
• Confirmed framework agreements
• Distribution-centre replenishment
• Predictive demand models

The main benefit of MTS is speed. When a customer places an order, the product is already available for picking and delivery.

The risk is inventory exposure. If demand is overestimated, the company may produce goods that remain unsold. Capital becomes locked in finished inventory, storage costs increase and products may become obsolete or expire.

SIX ManufacturingFlow helps connect the replenishment decision with real stock, existing reservations, open production orders and expected demand. Production planners can see whether new manufacturing is genuinely required before releasing another order.

A structured MTS calculation should consider:

Expected demand + safety stock − available inventory − scheduled production = required production quantity

The calculation becomes more accurate when stock availability is connected directly with SIX Warehouse and Inventory Management.

Make-to-Order: producing against confirmed demand

Make-to-Order production begins when a customer order is confirmed.

This approach reduces finished-goods inventory because the company does not manufacture without known demand. It is suitable for customised products, expensive products, specialised machinery and lower-volume production.

The customer order may define:

• Product and requested quantity
• Configuration or dimensions
• Required materials
• Drawings and technical documents
• Quality requirements
• Delivery date
• Customer-specific packaging
• Labelling requirements
• Regulatory or certification requirements

SIX ManufacturingFlow can convert confirmed demand into a manufacturing order. The manufacturing order then brings together the approved BOM, routing, materials, work centres, required capabilities, planned duration and delivery target.

The main challenge in MTO is lead time. The customer must wait while materials are purchased and the product is manufactured. Accurate planning is therefore essential. Sales should not promise a delivery date without considering material availability and production capacity.

By connecting CRM, Sales, Purchasing, Warehouse and ManufacturingFlow, SIX ERP can provide a more realistic view of what can be produced and when.

Assemble-to-Order and Configure-to-Order

Assemble-to-Order shortens customer lead time by producing or purchasing standard components in advance. Final assembly begins only after the customer selects the required configuration.

A furniture manufacturer might keep standard frames, mechanisms and fabrics available while final assembly depends on the model, colour and customer dimensions.

A machinery manufacturer may stock motors, pumps, controllers and standard housings while final configuration depends on capacity, voltage, connection type or operating environment.

Configure-to-Order follows a similar principle but places greater emphasis on controlled product options. The system must ensure that selected options are technically compatible.

The configured order may generate:

• A variant BOM
• A variant routing
• Additional quality requirements
• Customer-specific documentation
• Different production times
• A calculated selling price
• A unique finished-product code

SIX ManufacturingFlow can connect the customer configuration with the correct manufacturing definition so production does not rely on manually interpreted sales notes.

Engineer-to-Order

Engineer-to-Order is used when the product cannot be fully defined before the customer requirement is known.

The process may include:

Customer requirement → Engineering → Approval → BOM creation → Routing → Purchasing → Production → Testing → Delivery

This mode is common in special machinery, industrial equipment, construction-related manufacturing, complex metalwork and unique automation systems.

Revision control becomes especially important. Production must use the approved drawing, BOM and technical specification. If engineering changes the design after materials have been purchased or work has started, the business must understand the effect on cost, delivery and existing work.

SIX ManufacturingFlow can provide the production structure, while SIX Projects, Documents, Purchasing and Inventory support the wider Engineer-to-Order process.

Hybrid manufacturing: combining availability with flexibility

Many manufacturers do not operate in only one mode.

A hybrid manufacturer may:

• Produce standard components to stock
• Manufacture semi-finished goods in planned batches
• Purchase long-lead materials in advance
• Begin final assembly after receiving a customer order
• Add customer-specific labels or packaging before delivery

This approach provides the speed of Make-to-Stock without holding every possible finished-product variation.

Consider a manufacturer of industrial pumps. Standard housings, seals, shafts and motors may be kept in stock. The customer order determines the final motor size, pressure rating, connections, controller and testing procedure.

The upstream process is Make-to-Stock. Final assembly and testing are Make-to-Order.

SIX ManufacturingFlow can connect both sides of this process. Semi-finished goods remain visible in inventory, while the customer order triggers the final manufacturing stages.

The Bill of Materials: the product definition

The Bill of Materials, or BOM, defines what is required to manufacture a product.

A simple BOM may contain only a few components. A complex product may contain several levels of subassemblies, hundreds of materials and different component alternatives.

For example:

Finished product → Assembly → Subassembly → Components → Raw materials

A structured BOM can include:

• Material or component
• Required quantity
• Unit of measure
• Expected waste
• Issue warehouse
• Batch or serial requirement
• Substitute material
• Validity dates
• Revision
• Production stage
• Scrap allowance
• Co-products or by-products
• Quality conditions

The BOM is not merely a parts list. It affects purchasing demand, warehouse reservations, picklists, production costs, traceability and final-product availability.

Single-level and multi-level BOMs

A single-level BOM lists the materials directly required for one product.

A multi-level BOM includes subassemblies that have their own BOMs. This is common when a company manufactures components internally before using them in final assembly.

For example:

• Finished machine
  • Electrical cabinet
    • Controller
    • Relays
    • Wiring
  • Pump assembly
    • Housing
    • Shaft
    • Seal
  • Frame
    • Cut profiles
    • Welded supports

SIX ManufacturingFlow can use this structure to create demand at each level. A semi-finished assembly may be produced independently, stored and later consumed by a higher-level manufacturing order.

BOM revisions and effective dates

A BOM changes over time. A supplier may replace a material, engineering may improve the design or legislation may require a different component.

The system must preserve which BOM revision was used for each production order.

This is important because an updated BOM should not silently change an already released manufacturing order. Historical production must remain traceable to the definition that was valid when it was produced.

Revision control also helps answer important questions:

• Which customers received products made with the previous component?
• Which batches used a particular supplier material?
• When did the new version enter production?
• Do open manufacturing orders need to be updated?
• What is the cost difference between revisions?

Routing: defining how the product is manufactured

If the BOM explains what is required, the routing explains how the product is produced.

A routing defines the sequence of operations required to complete the manufacturing order.

A typical routing may include:

1. Material preparation
2. Cutting
3. Machining
4. Welding
5. Surface treatment
6. Assembly
7. Testing
8. Quality approval
9. Packaging

Each routing operation can include:

• Work centre
• Machine or machine group
• Required employee competence
• Setup time
• Run time
• Queue time
• Transfer time
• Expected output
• Inspection requirement
• Tools and equipment
• Instructions and drawings
• Parallel or dependent operations
• External subcontracting
• Reporting requirements

SIX ManufacturingFlow uses the routing to translate a manufacturing order into executable work orders.

Setup time and run time

Setup time is the time required to prepare a machine or work centre. Run time is the time required to process the production quantity.

This distinction is critical for large batches.

If a machine requires two hours of setup and then ten seconds for each unit, producing 10 units and producing 10,000 units create very different schedules.

A basic duration calculation is:

Planned duration = setup time + quantity × cycle time

The real calculation may also include expected downtime, inspection frequency, breaks, changeovers and yield loss.

Parallel and sequential operations

Not all operations must happen one after another.

Some components can be produced simultaneously and joined during final assembly. Other operations must wait until the previous step is complete.

SIX ManufacturingFlow can structure these dependencies so the production schedule reflects reality.

If operation B requires the output of operation A, it cannot start early. If operations C and D use different machines and materials, they may run in parallel.

This becomes especially important when rescheduling after a machine failure or material shortage.

From BOM to material requirements

Once the production quantity is known, the BOM creates gross material demand.

If one finished unit requires:

• 2 kilograms of Material A
• 4 pieces of Component B
• 1 piece of Component C

A manufacturing order for 1,000 units requires:

• 2,000 kilograms of Material A
• 4,000 pieces of Component B
• 1,000 pieces of Component C

However, gross demand is not the same as the quantity that must be purchased.

The system must consider:

• Available physical stock
• Stock already reserved for other orders
• Safety stock
• Expected warehouse receipts
• Open purchase orders
• Existing production orders
• Expected waste
• Minimum purchase quantity
• Supplier lead time
• Material expiry
• Batch and quality status

A simplified net-requirement calculation is:

Net requirement = gross requirement + safety stock − available unreserved stock − expected receipts

SIX ManufacturingFlow connects this calculation with SIX Warehouse, Inventory and Purchasing. This prevents production planning from using stock that exists physically but is unavailable, expired, quarantined or already reserved.

Warehouse integration: production and inventory must operate together

Production and warehouse operations are deeply connected.

The warehouse receives raw materials, stores them, reserves them, issues them to production and receives finished goods back into inventory.

Without integration, production may work with outdated stock information. The warehouse may prepare materials for an order that has been postponed, while urgent work waits for components that were never reserved.

A connected flow includes:

Material receipt → Quality status → Putaway → Reservation → Picklist → Production issue → Consumption → Finished-goods receipt

SIX ManufacturingFlow and SIX Warehouse Management can maintain this connection in real time.

Physical stock is not always available stock

A warehouse may physically contain 1,000 units of a component, but that does not necessarily mean production can use all 1,000.

Some quantities may be:

• Reserved for another manufacturing order
• Allocated to a customer order
• Under quality inspection
• Blocked or quarantined
• Expired
• Damaged
• Stored at another location
• Assigned to a particular batch
• Awaiting approval

Production planning should therefore use available stock rather than physical stock alone.

Picklists: turning material requirements into warehouse action

A production picklist tells the warehouse which materials must be prepared for a manufacturing order.

The picklist can contain:

• Manufacturing order
• Work order or operation
• Material
• Required quantity
• Unit of measure
• Source warehouse
• Storage bin
• Batch or serial number
• Required date and time
• Priority
• Staging location
• Picking status
• Actual picked quantity
• Substitute material approval

The picklist creates a controlled handover between warehouse and production.

Without a structured picklist, production employees may collect materials themselves. This reduces warehouse accuracy, weakens traceability and makes it harder to understand actual consumption.

With SIX ManufacturingFlow, material demand can create a picklist. Warehouse employees prepare and confirm the materials, and production receives them at the correct staging location.

Picklist status control

Useful picklist statuses include:

• Open
• Reserved
• Partially picked
• Fully picked
• Staged
• Issued to production
• Reopened
• Closed
• Exported or locked

Status control prevents the same quantity from being picked twice. It also helps planners see whether a manufacturing order is genuinely ready to start.

A production order should not be marked as material-ready simply because stock exists. The required components must be reserved, picked or staged according to the company’s process.

Short picks and substitutions

The warehouse may not always find the full required quantity.

A short pick should create a visible exception. The planner can then decide whether to:

• Wait for replenishment
• Reduce the production quantity
• Split the manufacturing order
• Use an approved substitute
• Transfer stock from another warehouse
• Reschedule the affected operation

Substitutions should be controlled. Warehouse employees should not replace a material without confirmation that the alternative is technically and legally acceptable.

Production execution on the shop floor

When materials, capacity and instructions are ready, the manufacturing order moves into execution.

The manufacturing order may be divided into work orders corresponding to individual routing operations.

Operators can receive:

• Product and quantity
• BOM and required materials
• Work instructions
• Technical drawings
• Machine assignment
• Tools and fixtures
• Planned start and finish
• Quality checklist
• Safety requirements
• Previous-operation status
• Batch and serial information

During production, employees record what actually happened.

This may include:

• Start and stop time
• Setup duration
• Machine time
• Labour time
• Quantity produced
• Quantity rejected
• Material consumed
• Waste and scrap
• Downtime
• Fault reason
• Rework
• Notes and photographs
• Quality measurements

SIX ManufacturingFlow converts shop-floor activity into current production information. Management no longer needs to wait for the end of a shift or manually updated spreadsheet.

Manufacturing large quantities

Large-volume production introduces challenges that may not appear in small manufacturing orders.

When thousands or millions of units are produced, small inefficiencies become expensive. A one-second delay per unit may create many hours of lost capacity. A small percentage of excess material consumption may become a major cost. A quality problem discovered late may affect an entire batch.

Large-quantity manufacturing therefore requires stronger planning, more frequent control and faster feedback.

Master production planning

Large-volume production begins with a realistic production programme.

Demand must be grouped by:

• Product family
• Production line
• Required period
• Customer priority
• Campaign
• Material availability
• Packaging format
• Changeover requirements
• Warehouse capacity

The planner must decide how much to produce and when.

Producing one enormous quantity may reduce setup time but create excessive inventory. Producing many small quantities may reduce stock exposure but increase changeovers and operational cost.

SIX ManufacturingFlow can provide the structure needed to compare these trade-offs.

Lot sizing

Lot size is the quantity produced in one manufacturing run.

A suitable lot size depends on:

• Demand
• Setup cost
• Machine capacity
• Material batch size
• Shelf life
• Warehouse space
• Quality-testing frequency
• Packaging constraints
• Customer order quantities
• Cleaning requirements
• Changeover duration

A dairy producer cannot determine lot size in the same way as a metal-parts manufacturer. Milk availability, processing capacity, product expiry and cleaning cycles affect the decision.

A furniture producer may group similar products by material, colour or machine setup to reduce changeovers.

SIX ManufacturingFlow allows production orders to follow product-specific planning logic rather than one universal quantity rule.

Line balancing and bottleneck management

In repetitive production, several operations may form one line.

If one operation produces 100 units per hour and the next can process only 70, work-in-progress accumulates between the two operations.

The slowest constrained operation becomes the bottleneck.

Useful measures include:

Throughput = acceptable finished units ÷ production time

Yield = acceptable output ÷ total output

Cycle time = time required to produce one unit

Takt time = available production time ÷ customer demand

If cycle time is higher than takt time, the process cannot meet demand without additional capacity, overtime or process improvement.

SIX ManufacturingFlow can provide planned and actual production data so managers can identify where capacity is lost.

Material staging for high-volume production

Large production quantities should not always receive all materials at once.

Delivering excessive materials to the line can create congestion, confusion and unnecessary work-in-progress.

Instead, materials may be supplied through:

• Shift-based staging
• Operation-based picklists
• Kanban replenishment
• Line-side minimum and maximum levels
• Scheduled material calls
• Supermarket inventory
• Batch-based issue
• Backflushing for controlled standard consumption

The warehouse and production schedule must therefore remain connected.

SIX ManufacturingFlow can provide the demand signal, while SIX Warehouse controls picking, staging, issue and replenishment.

Planned versus actual consumption

For large quantities, material variance becomes a major management indicator.

The system should compare:

• BOM quantity
• Planned waste
• Picked quantity
• Issued quantity
• Actual consumption
• Returned unused material
• Recorded scrap

If the BOM expects 10,000 kilograms but production consumes 10,600 kilograms, management needs to understand why.

Possible causes include:

• Incorrect BOM quantity
• Poor material quality
• Machine calibration
• Excessive setup waste
• Operator error
• Unrecorded output
• Theft or inventory error
• Rework
• Unplanned process loss

SIX ManufacturingFlow connects these variances with the manufacturing order and actual production result.

Quality control at scale

Large-volume production requires quality checks during production, not only after completion.

A final inspection may be too late if thousands of defective units have already been produced.

Quality control can happen at:

• Material receipt
• First-piece approval
• Setup confirmation
• Defined production intervals
• Batch completion
• Operation completion
• Final-product release
• Packaging
• Shipment

The system can require measurements, samples, photographs or approvals before production continues.

If a result is outside tolerance, SIX ManufacturingFlow can place the affected quantity on hold, create a non-conformance record, require rework or escalate the issue.

Traceability in large-quantity production

Traceability must connect finished products with the materials, employees, machines and processes used to make them.

A complete traceability chain may include:

Supplier batch → Material receipt → Warehouse location → Picklist → Production batch → Work order → Quality result → Finished batch → Customer delivery

This allows the company to investigate a problem without recalling every product unnecessarily.

If a supplier reports a defective material batch, the company can identify:

• Which manufacturing orders consumed it
• Which finished batches were affected
• Which customers received those products
• What quantity remains in stock
• Which quality results were recorded
• Whether production is still using the material

This supports customer protection, recall management, warranty analysis, quality systems and future Digital Product Passport requirements.

Production costing

A manufacturing order is not complete from a business perspective until its cost is understood.

Planned production cost may include:

• Raw materials
• Components
• Labour
• Machine time
• Setup
• Energy
• External processing
• Packaging
• Quality control
• Waste allowance
• Overhead

Actual cost should use what production really consumed.

SIX ManufacturingFlow can compare planned and actual values:

A product may appear profitable when only materials are considered but become unprofitable after labour, machine time, rework and waste are included.

How manufacturing changes between industries

The same manufacturing structure does not fit every industry.

Furniture manufacturing

Furniture production often combines standard components with customer-specific products.

A sales order may define:

• Model
• Dimensions
• Material
• Fabric
• Colour
• Foam
• Mechanism
• Packaging
• Delivery location

The BOM and routing may change according to the selected configuration.

Wood cutting, sewing, upholstery, frame construction, assembly and packaging may happen in separate work centres. Some operations can run in parallel, while final assembly depends on their completion.

SIX ManufacturingFlow can connect the configured product with the correct BOM and routing while maintaining visibility across all work centres.

Metal fabrication

Metal manufacturing depends heavily on technical drawings, machine capability and operation sequence.

A typical flow may include:

Material issue → Cutting → Drilling → Machining → Welding → Grinding → Surface treatment → Inspection → Assembly

The material may require heat or batch traceability. Welding may require a qualified employee. Surface treatment may be outsourced.

SIX ManufacturingFlow can connect each work order with the required machine, competence, drawing, material and inspection record.

Printing and visual production

Printing companies often manage a larger variety of processes than traditional printing alone.

A job may require:

• Design preparation
• Prepress
• Plate production
• Digital or offset printing
• Cutting
• Lamination
• Hard-plastic printing
• Metalwork
• Welding
• Assembly
• Packaging

Each customer job may follow a different routing.

Planning must consider machine format, colour capability, substrate, drying time, finishing operations and delivery deadline.

A delay in one operation affects every dependent operation. SIX ManufacturingFlow can help identify those dependencies and reschedule the remaining process.

Food and dairy production

Food manufacturing is often recipe-based and batch-controlled.

A dairy process may include:

Milk intake → Quality testing → Standardisation → Pasteurisation → Fermentation or processing → Filling → Aging → Packaging

The input quantity may not equal the output quantity. Yield, moisture loss, waste and by-products must be considered.

The process also requires:

• Supplier and farm traceability
• Batch control
• Temperature recording
• Expiry management
• Allergen control
• Cleaning operations
• Quality release
• Packaging traceability

SIX ManufacturingFlow can connect recipes, batches, process operations, quality checks, packaging materials and finished-product lots.

Pharmaceutical and cosmetics manufacturing

Pharmaceutical and cosmetics production requires strict control over approved formulas, materials and batch records.

Materials may remain in quarantine until quality approval. Production cannot begin with an expired or unapproved component. Each weighing, mixing, filling and packaging operation may require confirmation.

Changes to formulas, instructions and processes must be controlled.

SIX ManufacturingFlow can support the operational structure by connecting approved BOMs or recipes, routings, batches, quality checkpoints, employee actions and finished-product release.

Electronics manufacturing

Electronics products often have deep multi-level BOMs and frequent component revisions.

A manufacturer may need to manage:

• Alternative components
• Supplier-specific parts
• Serial numbers
• Firmware versions
• Assembly stages
• Testing
• Repair and rework
• Traceability to component batches

A shortage of one low-cost component can stop an otherwise complete product.

Warehouse availability, approved substitutions and purchasing lead times therefore have a direct effect on production.

Responding to production disruption

Even a well-planned manufacturing order may change.

Typical disruptions include:

• Machine failure
• Employee absence
• Material shortage
• Supplier delay
• Quality rejection
• Incorrect specification
• Urgent customer order
• Tool failure
• Excessive scrap
• Power interruption
• Warehouse delay

SIX ManufacturingFlow can identify the affected manufacturing orders and operations.

The response depends on the event.

A machine failure may require reassignment to a compatible work centre. A material shortage may require substitution, purchasing or reduced quantity. A quality failure may require quarantine, rework or a new production batch.

Structured incident classification makes rescheduling more intelligent because different problems require different actions.

Competence management in manufacturing

Machine availability does not mean an employee is qualified to operate it.

A routing operation may require:

• Machine-specific training
• Welding certification
• Electrical qualification
• Quality authorisation
• Safety instruction
• Forklift licence
• Product-specific experience
• Customer approval

SIX ManufacturingFlow can connect operations with employee competence profiles. This helps planners identify which employees are both available and qualified.

Expired or missing qualifications can act as assignment restrictions. This improves safety, quality and compliance while reducing dependence on personal knowledge.

One connected process in SIX ManufacturingFlow

The value of SIX ManufacturingFlow comes from connecting manufacturing with the wider business.

A customer order can create production demand. The BOM creates material requirements. Warehouse availability determines what can be reserved. Picklists organise material preparation. Purchasing responds to shortages. Routings create work orders. Shop-floor activity records actual time, consumption and output. Quality controls product release. Finished goods enter inventory. Costing measures the real result. Delivery and invoicing complete the customer process.

This is more than production software. It is a connected operating model:

Sales → Manufacturing → Purchasing → Warehouse → Quality → Finance → Delivery

The business result

Structured manufacturing helps companies achieve:

• More reliable production planning
• Better material availability
• Fewer production interruptions
• Lower excess inventory
• Clearer warehouse coordination
• Accurate picklists and reservations
• Better machine and employee utilisation
• Real-time shop-floor visibility
• Stronger quality control
• Complete batch and serial traceability
• Lower waste and rework
• More accurate production costing
• Faster finished-goods availability
• Better delivery-date performance
• Stronger management intelligence

Build production around facts, not assumptions

Manufacturing becomes difficult when every department works with different information.

Sales sees customer demand. Purchasing sees supplier orders. The warehouse sees physical stock. Production sees machines and work orders. Finance sees costs after the work is complete.

SIX ManufacturingFlow connects these views.

The result is a manufacturing process in which demand, materials, capacity, execution, quality and cost can be understood together. Whether the company produces one customised machine, several hundred furniture products or millions of packaged items, the same principle remains essential:

Every production decision should be based on current, connected and traceable information.

Plan intelligently. Supply accurately. Produce transparently. Improve continuously.