Basic Subcontracting Process

One kind of production process at vendor location is subcontracting. In Navision we cannot create Subcontracting Order directly because it is re-routed through released production order. Please follow the steps to create subcontracting cycle 

Creation of Location Card

As said above, it is process at supplier location and it is mandatory to create location in location card and tag as subcontracting location. See the following

Go to Warehouseà Setup à Locations

In Excise Tab, We need to declare as this location is subcontracting location as said above. This location needs to tag to Vendor card of “Icon Technologies” then Subcontractor No. ‘ICON01’will come automatically here

Tagging Location to Vendor Card:

We had completed and Subcontractor creation and respective linkage. As I said before Subcontracting is part of Production process so that we need to define Routing. Now let’s see detail routing process.  

As part of routing process it is necessary to define either “Work Center” or “Machine Center” as per your license. Here I am creating Work Center for respective routing.

Go to Manufacturingà Capacities à Work Center

General Tab:

1. Work Center No. has been generated from Number Series
2. Enter Work Center Name
3. Select Work Center Group Code from the list (It is used when you are calculating efficiency of similar type of work centers)

Posting Tab:

1. Select “Subcontractor No.” from the vendor list (This is the area we tag this particular work center is used for ICON Subcontracting.
2. System automatically will select Flushing Method as Manual. If you are following different then select from the drop down
3. Select Gen. Prod. Posting Group from the list – For finance Use

Scheduling Tab: 

1. Enter Unit of Measure code as per the Subcontractor (Minutes, Days, Hours)
2. Enter Capacity and Efficiency as defined above, Change the values if required
3. Select the Shop Calendar code from the list (It will define Subcontractor Calendar and it is a part of our production planning)

Once you defined Shop calendar code then it is necessary to run the calendar.

Go to the Planning Menu à Calendar

1. Work Center Calendar window will open then Click Functions à Calculate
2. In Calculate Work Center window Go to Option Tab then enter Start Date and End date then Click OK
3. Please note that Shift has been defined in the system
4. As per the diagram below Calendar entries will be generated

Routing Creation:

Go to ManufacturingàProduct DesignàRouting

1. Generate Routing No. manually or through System
2. Enter Description
3. Enter Operation No. as 10
4. Select type as Work Center
5. Select Your work center no. from the list
6. Enter run time (In Work Center card we defined UOM as Minutes so here enter run time approx. in minutes)
7. Change the status to Certified

Creation of Semi-finished Item -- Raw Material Item – Production BOM

Semi-finished Item:

Go to Manufacturing à Production Design à Item



 Check the following fields:

1. Item No.
2. Item Description
3. Base Unit of Measure
4. Invoicing Tabà Gen. Prod. Posting Group, Inventory Posting Group
5. Replenishment Tabà Replenishment System Should be a Prod. Order
6. Need to attach Prod. BOM No. and Routing. (we will see after creation of BOM)

Raw Material Item



 Check the following fields:

1. Item No., Item Description, Base Unit of Measure
2. Invoicing Tabà Gen. Prod. Posting Group, Inventory Posting Group
3. Replenishment Tabà Replenishment System Should be a Purchase

BOM Creation:

Go to Manufacturingà Product Design à Production BOM

 

Tagging Production BOM & Routing into Semi finished Item

Go to I 1001 item Card and select the following:

1. Routing No. – Select from the Routing list ICON R
2. Production BOM No. – Select from the Production BOM List

(Note: We have finished setups and linkages. Now we will see Subcontracting Process)

Creation of Release Prod. Order for Subcontracting

Go to Manufacturing à Executionà Released Production Orders

Steps to create: 

1. Select Production No. by clicking F3
2. Select Source Type as Item and Source No. is I 0001 (Our semi-finished Item)
3. Enter Quantity and Due date
4. Posting Tab à Select location
5. Click Functionsà Refresh
6. System will create line based on your BOM and Routing
7. To See Components Click Lines à Components
8. To See Routing Click Lines à Routing

Released Production Order:

Click Line à Components

Click LineàRouting

Creation of Subcontracting Order:

Go to Manufacturingà Planningà Subcontracting Worksheets

After window Opens, Click FunctionsàCalculate Subcontracts.

In Prod. Order routing line Tab, Select your released Production No. then Click OK

After clicking OK system will generate a line in Subcontracting worksheet.

 

Then, Click FunctionsàCarryout Action Message

Your Subcontracting Order has been generated now. Let’s go have a look.

 

Go to ManufacturingàExecutionàSubcontracting Order

Now we need to send Delivery Challan (57 F4) using the above Subcontracting Order.

 

Click LineàOrder Subcon. Details

Here you have two tabs 1. Delivery Details (Used for Sending material) 2. Receipt details (for receiving Semi finished Parts)

1. In delivery, we needs to enter Delivery Comp. for column then system will calculate Qty to send column automatically
2. If you want to send bulk raw material to the subcontractor then you can directly put the value in Qty to send column.
3. Specify Delivery Challan date
4. Enter company location
5. Click Send

After Clicking Send Delivery Challan Posted get updated with 1

Go to Delivery Challan PostedàDrill downà Select your delivery challanàDeliveryàCard then you can print 57 F4

Receive Material from Subcontractor:

1. Go to Receipt Detailsà Enter Qty to Accept
2. System will update Qty to consume column
3. Give Vendor Shipment No. and Posting Date in Header column
4. Now, We have adjust consumption against 57 F4. For that
5. Click Functionà Apply Delivery Challan

In Apply Delivery Challan window select App. Delivery Challan No. from the lookup and Qty to Consume is 10.

After Apply delivery Challan Click Receive. Quantity Accepted column is updated with you Quantity

You can take GRN Print from Posted Receipts.

-- Happy Reading