Operation subcontracting with material flow support

Complete the following steps to subcontract one or more operations. Together with the subassemblies, material is sent to the subcontractor. The data setup for subcontracting with material supply is described in Setting up operation subcontracting.

Step 1. Create production order

For an item with one or more subcontracted operations, you need a production order. Create a production order manually in Shop Floor Control, or create a planned production order in Enterprise Planning, and transfer it to Shop Floor Control.

For planned production orders in Enterprise Planning, you can view the production order operations in the Capacity Use by Planned Order (cprrp2100m000) session. If applicable, information about subassemblies is indicated on the operation line.

Use the Print Subcontracting Forecast (cprrp2402m000) session to print a list of all subassemblies that are planned to be received from the subcontractor.

Step 2. Release production order

Release the production order in Shop Floor Control.

In the Production Order (tisfc0101m100) session, on the Estimated Materials (ticst0101m000) tab, click Show Subassembly to view the subassemblies included in the estimated materials:

  • For the subassembly that is sent to the subcontractor, a negative quantity is displayed for the operation that precedes the subcontracting operation. A positive quantity is displayed for the subcontracted operation.
  • For the subassembly that is received back from the subcontractor, a negative quantity is displayed for the subcontracted operation. A positive quantity is displayed for the operation that follows the subcontracted operation.
Step 3. Generate subcontracting purchase order

A subcontracting purchase order is required to administrate the subcontracting process.

From the Production Orders (tisfc0501m000) session, start the Generate Subcontracting Purchase Documents (tisfc2250m000) session to generate a purchase order. If the Previous Operation Must be Completed check box in this session is selected, you must first complete the operations that precede the subcontracted operation before you can generate a purchase order.

In the Generate Subcontracting Purchase Documents (tisfc2250m000) session, enter a purchase order type. The activities linked to the purchase order type determine the handling of the subcontracting purchase order. For example, you can choose to insert the Generate Supply Orders for Subcontracting (tdpur4216m000) session, and select the Automatic check box, so that supply orders are automatically generated.

View the generated purchase order in the Purchase Order (tdpur4100m900) session. The order line displays the subassembly that you will receive from the subcontractor after subcontracting.

Step 4. Supply lines and supply orders

After a subcontracting purchase order is generated, you can view the supply lines, in the Purchase Order (tdpur4100m900) session or the Purchase Order Material Supply Lines (tdpur4116m000) session. Supply lines represent the materials and subassembly that must be shipped to the subcontractor

Supply orders are used to ship the subassembly and material from their warehouses at the manufacturer's site to the administrative warehouse. If supply orders are not created automatically (refer to step 3), run the Generate Supply Orders for Subcontracting (tdpur4216m000) session. Note that the subassembly's supply system, defined in the Warehouse - Item (whwmd2510m000) session, must be Order Controlled/Single.

Step 5. Approve subcontracting purchase order

In the Purchase Order (tdpur4100m900) session, click Approve to approve the subcontracting purchase order. For more information, refer to Purchase order approval.

Step 6. Report preceding operations completed

In the Report Operations Completed (tisfc0130m000) session, complete the operations preceding the subcontracted operations. If you defined a shop floor warehouse, the subassembly is automatically received in the shop floor warehouse. Without shop floor warehouse, the subassembly is received in the warehouse defined in the Items - Ordering (tcibd2500m000) session.

In the Material to Issue for Production Orders (ticst0101m100) session, you can check whether the subassembly is issued. In the Inventory by Specification (whwmd2519m000) session, you can check in which warehouse the subassembly is received.

Step 7. Transfer subassemblies

To ship the subassembly from the shop floor or the shop floor warehouse to the subassembly warehouse, carry out the transfer order.

  1. In the Material to Issue for Production Orders (ticst0101m100) session, select the subassembly that must be sent to the subassembly warehouse. This material line has a negative quantity. In the appropriate menu, click Production Warehouse Orders to start the Production Warehouse Orders (timfc0101m000) session.
  2. Select the transfer order with transaction type Issue, and click Warehouse Order - Status Overview.
  3. In the Outbound Line Status Overview (whinh2129m000) session, carry out the defined activities for the outbound-order line.
Step 8. Send subassemblies and material to subcontractor

The manufacturer must send subassemblies and material to the subcontractor. In LN, the subassemblies and material are sent to the administrative warehouse using an outbound procedure. To do so, you must handle the subassembly's and material's supply orders.

  1. In the Purchase Order (tdpur4100m900) session or the Purchase Order Material Supply Lines (tdpur4116m000) session, select the subassembly and material and click Supply Order.
  2. In the Warehousing Order (whinh2100m100) session, generate an advice.
  3. If the orders were not already handled automatically, in the Warehousing Order (whinh2100m100) session, select the outbound line and click Status Overview.
  4. In the Outbound Line Status Overview (whinh2129m000) session, carry out the defined activities such as generating and releasing the outbound advice and confirming the shipment.

In some cases, material for subcontracting activities is directly sent by the supplier to the subcontractor. In that case, complete the following steps:

  1. In the Purchase Order (tdpur4100m900) session or the Purchase Order Material Supply Lines (tdpur4116m000) session, select the subassembly and material and click Supply Order. A new supply order is generated.
  2. Select the newly generate order line, and click Approve.
Step 9. Receive purchase order in subassembly warehouse

After subcontracting, the subcontractor sends back the subassemblies. To receive the subassemblies into the subassembly warehouse, you must handle the purchase order. Note that the name of the subassembly sent back by the subcontractor differs from the name of the subassembly you sent to the subcontractor.

Complete the following steps:

  1. In the Purchase Order (tdpur4100m900) session, select the purchase order line of the subassembly sent back by the subcontractor, and on the appropriate menu, click Purchase Order Line Status.
  2. From the Purchase Order Line Status (tdpur4534m000) session, handle the purchase order according to the defined purchase order procedure. For more information about purchase order handling, refer to Flexible purchase order processing and Overview of purchase order handling.

Note that when the purchase order is received, LN automatically reports the subcontracted operations as completed. If applicable, the subassembly and the material that you sent with the subassembly are backflushed.

Step 10. Transfer from subassembly warehouse to shop floor warehouse or the shop floor

You may work further on the subassemblies that you received from the subcontractor. Therefore, you must issue the subassemblies to the shop floor. In the Material to Issue for Production Orders (ticst0101m100) session, select the subassembly that was sent to you by the subcontractor, which is the subassembly that has a positive quantity. Issue the subassembly to the shop floor.

If you use a shop floor warehouse, you must complete a transfer order to ship the subassemblies from the subassembly warehouse to the shop floor warehouse.

  1. In the Material to Issue for Production Orders (ticst0101m100) session, select the subassembly that was sent to you by the subcontractor, which is the subassembly that has a positive quantity in the To Issue field.
  2. In the appropriate menu, click Production Warehouse Orders to start the Production Warehouse Orders (timfc0101m000) session.
  3. Select the subassembly's transfer order with transaction type Issue, and click Warehouse Order - Status Overview.
  4. In the Outbound Line Status Overview (whinh2129m000) session, carry out the defined activities.

You can check in the Inventory by Specification (whwmd2519m000) session whether the subassembly is allocated inventory in the shop floor warehouse.

Step 11. Report operations completed

In the Report Operations Completed (tisfc0130m000) session, process the remaining operations and report them as completed. You can post the end items immediately to inventory.

Step 12. Report production order completed

Report the production order as completed in the Report Orders Completed (tisfc0520m000) details session.

Step 13. Close production order

Close the production order in the Close Production Orders (ticst0201m000) session.

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