When an output item is completed and has to be dispatched to a customer (usually for - make to order), consider the following steps.
Production Output
The first step is always to create a production output document on the production order for a part or all of the finished products. This document will contain any batch numbers, serial numbers or expiry dates. It will also provide a way to print labels. The production output is usually done to the production location.
Transfer or Dispatch
Depending on your workflow, the finished goods will need to be "transferred" to the dispatch location and "dispatched" to the customer from there, or "dispatched" directly from the production location. Ensure that the "Goods Dispatch" to the customer is linked to the "Sales Order" or "Sales Invoice" and not the "Production Order". This will provide better check-and-balances for the sales and billing process.