When you setup AX for production you usually create a bill of materials to indicated material you plan to use in a typical production process. When you create a production order then you can use the BOM to help you create picking lists and consume the material you planned to use.
There are times when you consume other materials that you didn’t plan for. This might be because a customer asked for a change, there was a mistake and you needed more material. So it’s helpful to understand that you can use the picking lists on a production order to indicate material you consumed and related to that production.
Here is a quick overview.
AX2012 R3 CU11
If you need a backgrounder on managing operations you can have a look at this post.