Sub Conctracting

Hi All,

I am trying to map sub contracting system in AX 3.0

A question I could not understand even after referring to the documentation available on that.

To set up subcontracting for an Item A of Type BOM where I have to send raw materials to the subcontractor and get back the finished Goods.

I have set up main FG Item A and a BOM for it. On the BOM lines I have included one Item B of type Service and other raw materials C & D.

On the BOM line for the Item B, I have mentioned the line type as vendor and entered the vendor id.

After creating the Production Order and completion of Estimation and Operations Scheduling, A purchase order for Service Item B is created with reference to the Prodcution Order. However, raw materials C & D are to be released to the sub contractor, How can that be done? From where? This is the thing which I could not get from the Sub Contracting Document also.

Regards,

DD

Further addition to my query:

At the end, I want to know what is the process which results in Release of Raw Materials to sub contractor?

Is it an Inventory movement? Or some change in Deposition status? Or a reservation?Which document is created for this release?

How does one track the inventory in a case where Raw material is still with subcontractor and he has not yet finished the work. Or another case where for the same Subcontracter, raw material is released a number of times and Finished Goods also is recieved a number of times.

You have set this as a BOM and production order by itself. What I suggest you do is add this into a parent item, you will see this clearer then, essentially by doing this when the parent order is moved from created it will create a sub-production order in much the same way a purchase order is created for teh service. The processing of the picking list reduces teh stock, issuing them to the sub-contractor. This means all of your tracking is held against the sub-contrator order and work centre. Depending upon your setup you can see this in WIP and on the capacity, but ultimately any open order of the type vendor is still at the subcontrators.

Thanks Adam,

I am now clear on this.

The process you have mentioned means that no inventory movement is created for the raw materials present in the BOM for the subcontracted Item.

If I want to report the Inventory with my subcontracter, I can only see the posted picking list and corresponding value in WIP accounts.

Is this correct business process wise? Because,

Say physically I gave 100 pcs of an RM to a subcontracter. He processed 50 pcs FG and returns 50 pcs FG to me. In this case, my inventory of FG increases by 50. But the stock at subcontracter will still show 100 Pcs of RM in WIP which is not correct

Actually, I should see 50 pcs of RM balance as a stock with my subcontracter and 50 in WIP since I have not yet closed the Order. ( Subcntracter may be a separate warehouse)

Please correct me.

Regards,

DD

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Hi DD In your example your works order on the supplier will be 100, that is what would drive the pick of 100, the 50 would remain in WIP as would the open production order on the supplier, and the purchase order would also remain open as you have only received half of the goods. The sub-contractor is not “holding” stock for you, there is no consignment element to this, you are placing a works and purchase order on them to fulfill. You should not see the stock in a separate warehouse, it is WIP. Imagine it as a non-subcontractor, you are asking that when you pick for a works order it moves the RM stock to a different warehouse and produces no WIP until the finished goods are produced.