To set up product subcontracting

Check that the Resources by Site concept is set to Active in the Enterprise Structures tab of the Implemented Software Components (tccom0100s000) session.

If the status other than Active, the concept must be activated. See the Infor LN User Guide for Site Activation for details.

To specify the settings for the end item, complete these steps:

1. In the Items (tcibd0501m000) session, select the end item.

2. In the Item (tcibd0501m100) session, in the Sites tab, select the production site.

3. In the Items by Site (tcibd1550m000) session, select supply source Subcontract in the Default Supply Source field. This enables a planned subcontracting purchase order to be generated in Enterprise Planning.

4. Save and close the session to return to the Item (tcibd0501m100) session.

5. In the Enterprise Units tab of the Item (tcibd0501m100) session, select the enterprise unit of the warehouse in which the end item is stored when it is received from the subcontractor. This is the warehouse that is linked to the production site.

6. Open the record and in the Item - Costing (ticpr0107m000) session, in the Costing Source field, set the costing source to Subcontract. The costing source is used to calculate the standard costs of the item.

7. Save and close the session to return to the Item (tcibd0501m100) session.

8. In the Item (tcibd0501m100) session, in the Sites tab, select the production site and open the record.

9. 9. In the Items by Site (tcibd1550m000) session, select subentity Purchase.

10. In the Items - Purchase by Site (tdipu0181m000) session, compete these steps:

    • In the Buy-from Business Partner field, select the subcontractor. See To set up general subcontracting data on how to define subcontractors.

    • In the Product Subcontracting Purchase Price field, specify the purchase price agreed with the subcontractor.

To specify the settings for all applicable components, complete these steps:

1. In the Item Data by Warehouse (whwmd2510m000) session, select a component and the warehouse at the production site.

2. Open the record and in the Valuation Method tab of the Item Data by Warehouse (whwmd2110s000) session, select inventory valuation method Standard Cost.

3. Save and close the session.

4. In the Item Data by Warehouse (whwmd2510m000) session, select a component and the warehouse at the subcontractor site to which the component is to be sent.

5. Open the record and in the Valuation Method tab of the Item Data by Warehouse (whwmd2110s000) session, select inventory valuation method Standard Cost.

6. In the Supply System field in the Supply tab of the Item Item Data by Warehouse (whwmd2110s000) session, specify Order Controlled/Single.

   This is because the components are supplied from the warehouse at the production site to the warehouse at the subcontractor site through a warehousing transfer order.

To define the subcontracting model, complete these steps:

1. In the Product Subcontractors List (tisub1100m000) session, select the production site and click New.

2. In the Product Subcontracting Model (tisub1600m000) session, in the header section, specify this data:

   • The end item in the Product field.
   • The subcontractor in the Subcontractor field. In this field, you can zoom to the Subcontractors (tisub0120m000) session.
   • The subcontractor location, that is, the subcontractor site in the Subcontractor Site field. In this field, you can zoom to the Subcontractor Locations (tisub0125m000) session.
   • The subcontractor warehouse in the Subcontractor Warehouse field. In this field, you can zoom to the Warehouses (whwmd2500m000) session.

3. In the Control tab, specify:

   • The effective and expiry dates
   • The BOM quantity. This is 1, because there is one main item that consists of one or more components.

4. In the Lead Times tab, specify this data:

   • The Lead Time Type to Fixed
   • The supply times to, for example, 21 days.

   The calendar is taken from the subcontractor site.

5. Optionally, in the Item Capacity field in the Resource tab, specify the number of items that can be produced on a weekly basis.

   The information in the Resource tab is only for information purposes in the current release.

6. In the Product Subcontractor Bill of Materials tab in the lines section of the session, specify the components defined earlier, these constitute the Subcontracting BOM.

7. Optionally, in the Product Subcontractor Bill of Materials tab in the lines section of the session, select the Supplied by Subcontractor check box. If this check box is selected, a component is produced or purchased by the subcontractor. This means that the component is not supplied by your organization, or present in the product subcontracting model. (This may result in a higher purchase price for the subcontracted item.)

8. On the Actions menu in the header section of the session, select Validate Product Subcontracting Models to validate the subcontracting model. This is to check that no errors are present in the product subcontracting model.

9. Save and close the session.

10. 10. In the Product Subcontractors List (tisub1100m000) session, on the Actions menu, select:

    • Use for Planning
    • Use for Costing
    • Approve Revision

    This means that the end item, subcontracted to the subcontractor at the subcontractor site is used for planning and costing, and that the current revision of the item is approved.

    In the report printed in the Print Multilevel Cost Calculation (ticpr2420m000) you can see the total material costs for the subcontracted item. The total material costs consist of the purchase price agreed with the subcontractor and the material costs of the components.

    Together these make up the new standard costs for the end item.

To calculate and actualize the standard costs of the end item, complete these steps:

1. In the Items (tcibd0501m000) session, select the end item and open the record.

2. In the Enterprise Units tab in the lines section of the Item (tcibd0501m100) session, select the applicable enterprise unit and on the Actions menu, select Calculate and Actualize Standard Costs.

3. In the Calculate and Actualize Standard Cost and Revalue Inventory (ticpr2225m000) session, click Calculate.

   Consequently, the standard costs for the product subcontracting model of the end item are active.