How to handle a subcontract manufacturing step/routing within a production order?

[Former Member]

Hello.

I have a client who produces a product in their own factory.  At the end of their manufacturing process they send their item out to have a test performed on it.  Ideally, I'd love to create another routing within the production order itself to reflect this operation.  However, this routing would also need to ship the goods out to the subcontract manufacturer and allow the receipt of materials back into inventory.  Also, there's a charge associated with this activity, so a purchase order would need to be raised to cover the cost. 

My current thought on how to get started is to create another location for this subcontract manufacturer, add the routing to the BOO showing this service being performed at said location, and manually generate a Purchase Order for a service item to send along with the items being shipped to the subcontract manufacturer for the service being performed. 

Thoughts?

Cheers.

Julie

[Former Member]

Hi Julie,

how Nick already mentioned, this is no current available feature in ByDesign. It is on the roadmap for 2014 but I will be honest, it is already on roadmap for a long time.

Your idea of a workaround for this problem matches ours which we have implemented for two of our customers. Further, for cost allocation / cost controlling I see two options:

1. 1. You can book the invoice for the service on a special cost center
2. 2. In a second step you can book costs from cost center to production lot with a manual journal entry. Direct cost allocation to production lot from supplier invoice is not supported.

Best Regards,

Andreas

[Weerakhan]

Hi Andreas,

Do you have any idea if we need to provide our raw material to subcontractor and need to receive it back as Semi-finished? That is we have the requirement that is more complicated to transform 1 material to another material without selling this raw material to our supplier.

[stefan_resag]

Hi Weerakhan,

in case you need to provide a raw material to the subcontractor and get another product back you can create a production model for the subcontracting process in the subcontractor site having as output material the semi-finished product and as component the raw material. Run MRP in the main production site will create stock transfer proposals for the semi-finished part. Running MRP in the subcontracting site then will create production proposals for the semi-finished parts and then also stock transfer proposals for the raw materials to be sourced from the main production site.

Best regards,

Stefan

[Weerakhan]

Dear Stefan,

Thank you for your input. I shall try this work around.

[Former Member]

Hello Julie,

The option you have mentioned is what we are using in the absence of subcontracting feature in ByD, Though this feature is due in the upcoming release (was even documented as addition in 1308) but no confirmation yet.

We have set up the Processing/Service Cost as a dummy Material in BOM and it creates a Purchase Request automatically.

Regards

Nick