Hi all, this is the situation: I need to buy an item D ( which is a Prod. BoM composed to A, B and C) : Step1: A and B are going to a subcontrator to be worked on Step2: Item C is added on A and B , Result is a finish good: D Step3: They sent back item D to our plant. In our plant: - Right costs need to be track - A nd B need to be deduct from inventory - D needs to be increased at the right cost too. How can I handle that??? All advices will be great. Thanks RF
Look at www.olivia-sistemas.com Products, Subcontracting Add-on
The first time I had a client that needed to handle sub-contracting was in 1992.[;)] They used Navision functionality out of the box with no mods. Can’t see why things should change. This is actually really simple. First lets take Manufacturing out of the question for a moment. In subcontracting, the normal objective, is to 1/ take an item from inventory, 2/ send it to a subcontractor for some Value Added service 3/ Return the item to stock at an increased value. (some times witht he same item no. some times a different one. 4/ Create a purchase invoice to the sub contractor for the value of their service. OK… lets say we take item 12 of A001, send it to the subcontractor and return it as Item A001-X Create purchase order to subcontractor for 12 of A001 (yes enter a negative quantity). Post the Receipt only, and this removes the item from inventory After posting the receipt, add another line for +12 of A001-X when the SubCOntractor returns the item, post the receipt of this item. Now enter the direct cost of the -12 as the actual cost of the Item, and the +12 at the original cost, plus what you owe the contractor. Now if you post the invoice the amounts will all be correct. Good luck.[8D]
Hi David! It looks fine if you use Purchase order to receive. But I will use warehouse receipt for a paricular location and it looks like in 3.6 the system doesnt allow you to post negative inventory. So , I still doent know how to do??? Thanks Rosine
Hi Rosin, I think i miss something. Who adds C to the product? Do you have to pay to subcontractor for C?
Hi, I our case subcontractor add C to the product and we have to pay for it. We have two solutions: 1. We create two versions of the BOM. First version is Engineering BOM includes A, B, C. Second is Manufacturing BOM includes only A and B. Routing Line for subcontractor has total cost for Labor and component C. In this case system includes cost of component C as subcontracting cost. 2. Second solution required some modifications for subcontracting worksheet. We have one BOM with A, B and C in it. And we setup routing link code for C component and Subcontractor routing line. C component setup as back flash. We made modification to the Subcontracting Worksheet Make Order Function. System Creates Purchase orders for labor and components that have the same routing link code as routing line. So when we post purchase order system automatically back flash material C.
[:I]Sorry, brain off[:o)]… I didn’t realize this was manufacturing[:I] … My answer should have read… Create a Subcontracting work center, and process this. [:D]
but standard Navision can’t control way of the flow of materials of subcontracting
Hi Valentin! 1. All receiving need to be done at Warehouse management level 2. The suncontractor adds C to the product to make the final product D and we have to pay the subcontractor for C. So, qty of C and D must increased, qty of A and B must decrease with the right costs attached to them. Thanks \RF
quote:
Originally posted by David Singleton
The first time I had a client that needed to handle sub-contracting was in 1992.[;)] They used Navision functionality out of the box with no mods. Can’t see why things should change. This is actually really simple. First lets take Manufacturing out of the question for a moment. In subcontracting, the normal objective, is to 1/ take an item from inventory, 2/ send it to a subcontractor for some Value Added service 3/ Return the item to stock at an increased value. (some times witht he same item no. some times a different one. 4/ Create a purchase invoice to the sub contractor for the value of their service. OK… lets say we take item 12 of A001, send it to the subcontractor and return it as Item A001-X Create purchase order to subcontractor for 12 of A001 (yes enter a negative quantity). Post the Receipt only, and this removes the item from inventory After posting the receipt, add another line for +12 of A001-X when the SubCOntractor returns the item, post the receipt of this item. Now enter the direct cost of the -12 as the actual cost of the Item, and the +12 at the original cost, plus what you owe the contractor. Now if you post the invoice the amounts will all be correct. Good luck.[8D]
HI David! I have also had your idea once - but I saw 2 problems: 1. The subcontracted parts are still your property (where do you see that in Navision?) 2. The purchase invoice does not really map the reality. Also, cost prices need to be calculated outside Navision, since the subcontractor’s invoice only shows the added value. Any solutions for that or am I forgetting something here?
Hi Markus I do not want to steal David’s thunder but . . . . 1. The flushing method of the component subcontracted, if manual, or backwards, will remain in the inventory of yourself, and downdated when the operation is complete, if you use routing link codes, or when the production order is complete, if you don’t - this is theoretical, I have not run this through and hence David may well add to it. 2. The subcontractor workcentre has a cost calculation per time or unit. this is the cost element of this part of the process - the added value. You pay the invoice and this is rolled into the cost of the item. The other stages make up the other costs with the other overheads and material etc. So, again theoretically, this should all work. But we have not got down to brass tacks so who knows. [:D] Have fun.
Steven/David, my reply was to Davids’s original message (without manufacturing), because a distribution facility may also use subcontracting (as it is in our case). I really liked the idea - with the two exceptions I put in my reply. So, is there a possibility to map subcontracting without manufacturing but still to show stock value[?] (BTW: Another solution is to use different locations/transfer and item charges, but a lot of manual input nec.)
Hi Markus Apolgies for butting in then [:I]. Its easy to get lost in these long threads over a period of time and that is my excuse [:D]
Hang on, my understanding of this is that you have items A & B, do something to them and then send them out to a subcon to finish off. The subcon adds a part (C) and sends it back as finished product D. In this case you don’t have to control the stock of C (its the subcon’s problem), so your BOM says D is made from just A & B. The cost of C is handled as part of the subcon cost that you put on the route. The complication comes if you are putting A & B together and then sending the partly finished product along with part C to the subcon. In this case, how about using a routing link code and backward flushing C from the previous operation. As you post the output on that op, C gets issued and is then ready to send to the subcon along with your partly finished product. Cheers, John