| Setting up operation subcontractingYou can choose to subcontract part of the production process,
and supply material to the subcontractor. Step 2. Administrative warehouseDefine an administrative warehouse in the Warehouses (whwmd2500m000) session. The administrative warehouse reflects the
external warehouse at the subcontractor's site. Define the subcontractor data
in the Sold-to field and the Ship-to field. This data is necessary to create
subcontracting purchase orders during the subcontracting process. Consider the following check boxes: Step 3. Item data for subcontracted item and
subassembliesEnd item In the Items - Production (tiipd0101m000) session, find the end item for which you subcontract one
or more operations, and for which you want to support the material flow. Select
he Subcontracting with Material Flow check box for this
item. Calculate the end item's cost price (top-down) in the Calculate Cost and Valuation Prices (ticpr2210m000) session. Subassemblies In the Items - General (tcibd0501m000) details session, define two items for which the Subassembly check box is selected. These items
represent respectively the subassembly sent by the manufacturer to
the subcontractor, and the subassembly sent back by the subcontractor after
work is done. If you want to leave open the possibility to produce the item
yourself instead of sending it to a subcontractor, set the item type of the
subassembly that you receive back from the subcontractor to Manufactured. If the manufacturer sends no subassembly to the
subcontractor but only material, you just need to define an item code for the
subassembly created by the subcontractor. Define the following data for the
subassemblies: Warehouse In the Items - Ordering (tcibd2500m000) session, find the defined subassemblies. For the
subassembly that you will send to the subcontractor, enter in the Warehouse field the warehouse from which you send the
subassembly. For the subassembly that you receive back from the subcontractor,
enter the warehouse in which you receive the subassembly. Cost price To generate an effective cost component structure,
define the assemblies' costing data in the Items - Costing (ticpr0107m000) session. Calculate and actualize the cost price in the Calculate Cost and Valuation Prices (ticpr2210m000) session while the Actualize Standard Cost and Valuation Prices check
box is selected. Supply Subassemblies are sent to the subcontractor by means
of a purchase subcontracting order, which is an order-specific supply. In the Warehouse - Item (whwmd2510m000) details session, you must therefore define the supply
system Order Controlled / Single for the correct
combination of the subassembly that you will send to the subcontractor and the
administrative warehouse. Note that for a subassembly, this is the only supply
system you can use. Price For the item that is sent back by the subcontractor,
you must determine the price you will pay to the subcontractor. In the Items - Purchase (tdipu0101m000) session, use the Source of Price field to choose between Subcontracting Rate and Price Book / Contract to determine the price.
Note that if you subcontract the last operation, you must define the price for
the end item instead of for the subassembly. If the Source of Price field is Subcontracting Rate, you must define subcontracting rates in the Subcontracting Rates (ticpr1160m000) session. Define the rate by task for the correct
combination of project, price calculation code, parent item or
subcontractor. If the Source of Price field is Price Book / Contract, the Subcontracting Rates (ticpr1160m000) session is also relevant, because the tasks'
cost components are defined in this session. You can leave the Project (PCS), Parent item, and Subassembly fields empty.
Step 4. Supply data for componentsRegulate the supply of components to the subcontractor.
There are two ways: Order specific supply Order specific supply means that supply is linked to the
subcontracting purchase order. The supplied quantity is the quantity required
for the purchase order. To use order specific supply, the component's supply system in the Warehouse - Item (whwmd2510m000) session must be Order Controlled/Single, for the correct combination of component and
administrative warehouse. Order specific supply can exist between manufacturer and
subcontractor, or directly between supplier and subcontractor: Supplier - subcontractor - Clear the Supply from Warehouse check box in the Warehouse - Item (whwmd2510m000) details session, for the correct combination of
component and administrative warehouse.
- Enter the supplier in the Ship-from Business Partner field and the Buy-from Business Partner field.
- Supply takes place by purchase order.
Step 5. Terms and conditionsDefine terms and conditions in the following
cases: - If components are shipped by sales orders.
- If you, the manufacturer, are responsible for the
components' planning.
For more information about agreements, refer to Setting up terms and conditions. Step 6. Sales contractIf components are planned by the subcontractor or shipped by
sales order, define a contract in the Sales Contracts (tdsls3500m000) session. The Sold-to Business Partner field must contain the
subcontractor code. Use the Terms and Conditions ID field to link the applicable
terms and conditions agreement. Define the rest of the contract in the Sales Contract Lines (tdsls3501m000) session. Step 7. User profile purchaseDefine your user profile in Purchase Control so that LN can generate and
handle subcontracting purchase orders properly. Step 8. Subcontracting work center and shop floor
warehouseIn your LN system, you must define a subcontracting work center to represent
the place where subcontracting operations are carried out. In the Work Centers (tirou0101m000) session, define a subcontracting work center with work
center type Subcontracting Work Center. Link the following information to the subcontracting work
center: - In the Subcontractor field, enter the subcontractor
code.
- In the Shop Floor Warehouse field, enter the administrative warehouse, which can be a normal warehouse
or a shop floor warehouse. This warehouse represents the
warehouse at the subcontractor's site, and is used to monitor the
subassemblies' and components' inventory levels.
Step 10. BOMIn the Bill of Material (tibom1110m000) session, use the Supplied by Subcontractor check box to determine how the
subcontractor is provided with material for subcontracting
activities. In the Operation field, enter the operation number for which the
subcontractor requires the material. | |