Domain Invariants & Business Rules (“The Law”)

The In-House Manufacturing domain enforces a strict set of business invariants. These rules are non-negotiable constraints that protect production integrity, cost accuracy, and auditability across the enterprise.

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1. Pre-Production Material Reservation

A Manufacturing Order or Work Order cannot transition to “In Progress” until all critical raw materials and components required by the approved BOM have been successfully allocated, reserved, or hard-staged in the target production location.

Reservation Rules

Rule	Invariant
Critical Component Allocation	Every BOM line flagged as critical must have confirmed allocation before production starts.
Allocation Source	Allocation may come from available inventory, expected inbound receipts, or approved floor-stock replenishment.
Hard Staging Requirement	For high-value, serialized, or lot-controlled components, physical staging to the production location is mandatory.
Non-Critical Tolerance	Non-critical or floor-stock components may be backflushed, but their BOM quantities must still be covered by available stock.
Reservation Lock	Allocated inventory is reserved exclusively to the order and cannot be reallocated to another order without explicit release.

Business Consequence

If reservation fails, the order remains in a Material Shortage or Awaiting Staging state. Planning must either:

• Revise the order quantity or schedule.
• Trigger Procurement to expedite inbound material.
• Substitute the component using an approved alternate BOM line.

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2. Routing Sequence Enforcement

Routing operations must be executed in the strict sequence defined by the engineering routing unless an operation is explicitly configured to allow parallel execution or overlap.

Sequence Rules

Rule	Invariant
Strict Ordering	Operation $N+1$ cannot report completion until Operation $N$ has been completed or explicitly released.
Parallel Execution Flag	Operations marked with the parallel flag may overlap with adjacent operations, subject to capacity constraints.
Skip Authorization	Skipping an operation requires documented authorization, quality waiver, or engineering deviation.
Rework Re-Entry	A failed operation must be corrected through a rework path that re-enters the routing at the appropriate step.

State Gate

An operation’s status acts as a gate for subsequent operations:

Operation 10: Not Started → Started → Completed
                │
                ▼ (gate opens only on Completed)
Operation 20: Not Started → Started → Completed
                │
                ▼
Operation 30: Not Started → Started → Completed

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3. Non-Negative Production Yield

All recorded production quantities must satisfy physical and mathematical integrity constraints.

Yield Integrity Rules

Rule	Invariant
Non-Negative Quantities	Produced quantity, scrapped quantity, and rework quantity can never be negative.
Output Cap	Total reported output (Good Quantity + Scrap Quantity + Rework Quantity) cannot exceed the order quantity plus authorized overproduction tolerance.
Material Balance	Total material consumption must balance against total output within the tolerance defined by scrap factors and measurement units.
By-Product Attribution	By-product and co-product quantities must be explicitly attributed to a producing operation and order.

Tolerance Control

Tolerance Type	Control
Overproduction	A configurable percentage above the order quantity; requires authorization beyond the threshold.
Scrap Factor	Applied to gross material requirements; actual scrap above the factor triggers variance analysis.
Measurement Unit Conversion	All quantity balances respect unit-of-measure conversion factors between BOM, inventory, and reporting units.

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4. Immutable Production Ledger

Once a Manufacturing Order is Completed and Closed, its consumption ledger, labor logs, machine hours, output quantities, and cost distribution are sealed permanently. Corrections require compensating adjustment orders rather than mutation of the original record.

Immutability Rules

Rule	Invariant
No Post-Closure Editing	Material issue lines, labor tickets, operation completions, and output records cannot be edited after closure.
No Deletion	Production records are never deleted; correction is achieved through compensating documents.
Sealed Cost Distribution	Standard and actual costs are frozen at closure; variances are reported but not retroactively adjusted.
Audit Chain	Every compensating order links back to the original order through a reference chain.

Permitted Correction Mechanisms

Correction Scenario	Mechanism
Under-issued material discovered after closure	Create a Material Adjustment Order or debit the next production run with traceable reference.
Over-issued material	Create a Material Return Order or adjust through inventory write-off with reason code.
Labor time error	Create a Labor Correction Ticket or apply to a subsequent order with variance note.
Output shortfall or excess	Create a Rework Order or Scrap Disposal Order referencing the original MO.
Cost misclassification	FMS posts a manual journal adjustment; Manufacturing does not alter the production ledger.

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5. Capacity & Calendar Integrity

A work center or machine cannot be scheduled beyond its effective capacity within a calendar period.

Capacity Rules

Rule	Invariant
No Overload Scheduling	Confirmed load cannot exceed effective capacity unless explicitly overridden by authorized capacity expansion.
Calendar Validity	Operations cannot be scheduled outside the active work center calendar.
Maintenance Lockout	Operations cannot be scheduled during planned maintenance windows reported by CMMS.
Skill Matching	Operations requiring specific labor skills cannot be assigned to unqualified operators.

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6. Quality Gate Enforcement

Mandatory inspection operations must be completed and dispositioned before downstream operations or inventory transfers can proceed.

Quality Gate Rules

Rule	Invariant
Inspection Hold	Output from an inspection-required operation remains in quarantine until dispositioned.
Disposition Outcomes	Only accepted quantities may proceed; rejected quantities are routed to scrap or rework.
Downstream Block	No subsequent operation or GRN may be recorded until the inspection gate is released.
Traceability	Inspection results are linked to the operation, lot, and operator for full traceability.

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7. Cost Object Consistency

All production costs must be attributable to a valid cost object (Manufacturing Order, Work Order, or operation) and must follow the defined cost accumulation model.

Cost Rules

Rule	Invariant
No Orphan Costs	Material issues, labor tickets, and machine hours must reference an active or closed production order.
Standard Cost Validity	Standard costs used for planning must be derived from the currently effective BOM revision and routing.
Single Cost Version	Only one standard cost version is active for costing purposes at any point in time.
WIP Balance Integrity	The WIP balance for an order must equal the sum of issued materials, labor, and absorbed overhead minus completed output valued at standard cost.

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8. Summary of “The Law”

Invariant	Violation Consequence
Material must be reserved before production starts.	Order cannot be released; planning exception raised.
Operations must follow routing sequence.	Subsequent operation blocked; quality deviation required.
Quantities cannot be negative and must balance.	Transaction rejected; variance investigation triggered.
Closed orders are immutable.	Compensating order required; original ledger protected.
Capacity cannot be overloaded without authorization.	Scheduling conflict; order remains unscheduled.
Inspection gates must be cleared.	Output quarantined; downstream operations blocked.
Costs must belong to a valid cost object.	Cost posting rejected; orphan cost report generated.

These invariants collectively ensure that the In-House Manufacturing domain remains the authoritative source of truth for internal production execution while preserving auditability, cost accuracy, and operational control.