Production Templates are used to create recurring production orders. They become the blueprint that underlines your production processes. A production template should evolve over time to ensure that quality issues are managed effectively. Versioning of production templates are important (version number).
When you create a production template, you select a "finished product", bill-of-materials (BOM) and a number of routing steps that need to be performed on the raw materials (or components) to make the finished product.