Workflow for Subcontracted Operations

In this document the workflow for subcontracting is described when working with subcontracted operations and manufacturing orders.

Outcome

A finished product with the subcontracted operation is updated in the stock and the corresponding financial transaction is performed.

Subcontract operations applies when one or more of the operations in a product structure is subcontracted and one or more of the operations is done inside your own factory.

For example, in the manufacturing of a chair, the cutting and the gluing operation may be done within the factory while painting is subcontracted. This way of working with subcontracting is called subcontracted operations.

The workflow is usually administrated through a manufacturing order.

Important tables used for these settings are:

MPOPLP Planning Proposal Purchase
MPHEAD Purchase Order Header
MPLINE Purchase Order Lines
MGHEAD Stock Transaction, Header
MGLINE Stock Transaction, Lines
MPSURL Subcontracting Requisition Lines

Before you start

Follow these steps

Create a planned PO and release to a PO

When a manufacturing order is specified for the finished product, a planned purchase order for the subcontracted operation is created automatically in 'Planned Purchase Order. Open' (PPS170). How to create a manufacturing order is described in Creating Manufacturing Order.

  1. In 'Planned Purchase Orders. Open' (PPS170) sorting and selection of orders is done by using sorting orders and views.

    Note: Fields of interest for subcontracting are only explained here.

    How to create a planned PO is explained in Planned Purchase Order.

    Origin code specifies from where the planned purchase order was created. By using origin code 21 only planned purchase orders created from manufacturing orders are displayed on the panel.

  2. On the (PPS170/E) panel, the purchase price is defaulted from a general or a normal agreement. The price on the general agreement is specified on the F panel in 'Supplier. Connect Item' (PPS040). If no price is specified in the agreements, the price must be specified manually.

  3. On the F panel, the manufacturing order number is displayed together with the number of the subcontracted operation in the product structure.

    • The reference order category (digit 1 after the line number) specifies what the order number refers to. One (1) means that the reference is a manufacturing order number. After release of the planned purchase order, this reference will follow on to the purchase order.
    • The planned purchase order is released as a normal order and creates a purchase order for the subcontracted operation in 'Purchase Order. Open' (PPS200). The purchase order type used for the creation of the purchase order is displayed on the E panel in 'Planned Purchase Order. Open' (PPS170). The purchase order type is defaulted from the item/supplier combination in 'Supplier. Connect Item' (PPS040).

A requisition order is created

When the purchase order is printed and reaches status 20='Released', a requisition order is created in 'Req/Distr Order. Open' (MMS100). This will happen provided that the issue of material is done from the manufacturing order.

The requisition order is not inventory-accounted and only used to create freight document for the delivery of the material to the supplier and is often called a dummy requisition order.

The Status indicates how far in the workflow the requisition order has come. Status 44 means that the picking list is printed but not yet reported. On the requisition order type used for this transaction, you can set up whether or not picking list reporting is needed. When the picking list is reported, the status on the requisition order is set to 99. Requisition and distribution orders are described in greater detail in the requisition and distribution order documentation.

Report picking list

Picking lists are reported in 'Picking List. Report' (MWS420). Often there are two picking lists to report: One for the material issues (transaction type 11) and one for the freight documents (transaction type 41). For more information on reporting picking lists, see Print, Pick, Pack and Report Picking Lists.

Receive the goods from the subcontracted supplier

After the supplier has finished the work, the goods are sent back to the company. When the goods are delivered, the goods are received in the same way as normal goods by using 'Purchase Order. Receive Goods' (PPS300). The goods receiving method controls what activities are done in the receiving flow. For more information on receiving goods, see Goods Receiving Flow for Purchase Orders.

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