General subcontracting data setup

The data needed to set up for subcontracting can be subdivided into these categories:

  • Master data and settings used for both operation subcontracting and product subcontracting
  • Master data and settings used for operation subcontracting.
  • Master data and settings used for product subcontracting

In this topic, the general data that is used for both operation subcontracting and product subcontracting is discussed

See To set up general subcontracting data for step-by-step instructions.

The general master data and settings includes this data:

Production sites

A production site is a site where the manufacturer performs production. If the manufacturer subcontracts an item or an operation, the subcontractor completes the operation or the item and ships the completed subcontracted work to the warehouse at the production site.

If operation subcontracting with material flow support is performed, materials needed by the subcontractor are sent from the production site to the subcontractor site.

Subcontractor

A subcontractor is defined as a business partner with a buy-from role and a subcontractor ID. The ID of the buy-from business partner is used as the subcontractor ID. A subcontractor can have multiple sites where subcontracting is performed.

Subcontractor sites

A subcontractor can have one or more locations, which are modeled as sites. A subcontractor site is an external site where the subcontractor performs production that is subcontracted by the manufacturer. A subcontractor site is provided with the ID of the subcontractor.

A subcontractor site requires procurement settings. These are used for the subcontracting purchase order line and the purchase order material-supply lines, which contain a supply-to warehouse. This is the warehouse on the subcontractor site.

A subcontractor can also have a location on a production site. This applies only to operation subcontracting.

Subcontracting relationships

Subcontracting relationships are used to model the availability of subcontractors to manufacturers and to register the production sites that use the services of a subcontractor.

This is done by linking subcontractor sites to production sites.

You can link a production site to multiple subcontractor sites or link multiple production sites to the same subcontractor site.

For example, to model that subcontractor sites B and C of subcontractor A are available for production site D of manufacturer E, you can link subcontractor sites B and C to production site D.

Subcontracting work centers

A subcontracting work center represents the subcontractor in the production order. It is merely administrative. It has no operational function because detailed monitoring of the production processes performed by the subcontractor at the subcontractor sites is not required.

The subcontractor work center is defined as a work center on the production site without a production department.

Calendars and transportation times

The subcontractor availability is defined by the calendar of the subcontractor site. You can define transportation times between production sites and subcontractor sites for sending materials and receiving products.

External planning clusters

Preferably, subcontractors and subcontractor sites are linked to external planning clusters. If subcontractors and subcontractor sites belong to an external planning cluster, they are available for manufacturers, that is, production sites, belonging to different planning clusters.

For example, if subcontractor site A is linked to external planning cluster A, subcontractor site A is available for production site B linked to planning cluster B and production site C linked to planning cluster C.

In this way, the production sites can independently perform their own planning within their own cluster while using the same subcontractors.

Conversely, if the subcontractor site belongs to a planning cluster, it can only be linked to production sites that belong to the same planning cluster. This would mean that the subcontractor should be redefined and linked to other planning clusters to use them for production sites belonging to other planning clusters.

Note: The distinction between planning clusters and external planning clusters is that an external planning cluster groups subcontractor sites and is excluded from Enterprise Planning, whereas a planning cluster groups sites for which the inbound and outbound goods flow is planned collectively.

Enterprise units

The production sites and the subcontractor sites must be linked to the same enterprise unit if they are located in the same country.

If located in different countries, you must define an enterprise unit for each country. This is required because taxation and other rules can be different in each country and invoicing relations must be set up. For details about enterprise units, see Enterprise units.

Subcontracting purchase orders

A subcontracting purchase order is used to buy a service from a subcontractor. This may involve the production of an item or the execution of one or more operations.

Subcontracting purchase orders are required for both product subcontracting and operation subcontracting with or without material flow support.

A subcontracting purchase order has a purchase order type for which the Subcontracting Order check box is selected in the Purchase Order Type (tdpur0694m000) session.