Workflow for Subcontracted Items

Outcome

A finished product with the subcontracted item(s) is updated in the stock and the corresponding financial transaction is performed.

Subcontracted items apply when all of the operations in a product structure is subcontracted and done by a subcontracted supplier.

The workflow is administrated without a manufacturing order.

The following files are updated in M3:

• 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

• Settings in Define Basic Settings for Subcontracting must be fulfilled.
• Settings in Define Settings for Subcontracted Item must be fulfilled.

Follow these steps

1. Create a planned PO and release to a PO

   • When a demand is created in the system on the subcontracted item, for example, from the MRP or from a customer order, a planned purchase order is created in 'Planned Purchase Order. Open' (PPS170).
   • In 'Planned Purchase Orders. Open' (PPS170) sorting and selection of orders is done by using sorting orders and views.

     Only fields of interest for subcontracting are 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 20, only planned purchase orders are displayed on the panel.

     You can reschedule the subcontracted order (available on hand etc.) by using option 20=Subcontracting Selection.

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

     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).

   • On the (PPS171/B) panel the work center as well as the subcontracted operation's number is displayed.

     The defaulted supplier and delivery date can be changed and new planned purchase orders created by using F14 (Crt PO Prop).

     If several subcontracted operations exist in the product structure for different suppliers, this program is used to plan and make changes to the planned purchase order.

2. 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 Status indicates how far in the flow 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.

3. Report picking list

   The material required to produce the finished product is printed on the picking list and reported in 'Picking List. Report' (MWS420). Two picking lists are reported: One for the material issues (transaction type 11) and one for the freight documents (transaction type 41).

   How to report picking lists are described in .

4. Receive 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. How to receive goods are described in Goods Receiving Flow for Purchase Orders.

   • More than one subcontracted supplier is used

     In some cases more than one supplier is used for subcontracting and the material is sent to a second supplier for further operations. On the purchase order document sent to the first supplier, the second supplier's address is printed in the Deliver to field. After the first supplier has sent the goods to the second, a fictive goods receipt should be done on the first purchase order.

   • Update the On-hand Balance

     Whether the on-hand balance of the item is updated depends on the settings on the order type. For subcontracted items, this parameter is usually set to 1 (= both the material plan and the projected balance is updated).

     The goods receipt creates financial transactions in the flow.