<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/ti/onlinemanual/000081" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Subcontracting</Title>
	</Header>
	<GeneralSection><Paragraph>If subcontracting is applied, a part of the routing is not performed on the plant but is outsourced to a supplier who performs the operation(s). This means that the intermediate product is sent to the subcontractor. After the operations are carried out, the products are received back at the plant. The receipt of the subcontracting item in the warehouse triggers the completion of the subcontracting operation on the shop floor.</Paragraph>
		<Paragraph>ERP supports two types of subcontracting:</Paragraph>
		<List><ListItem>Unplanned subcontracting: Operations of a production order are subcontracted in the <GUIRef href="/baanerp/ti/sfc/tisfc2210m000" role="session">Subcontract Operations (tisfc2210m000)</GUIRef> session. The subcontracting costs are part of the estimated and/or actual production order costs.</ListItem>
		</List>
		<List><ListItem>Planned subcontracting: Work centers of the <GUIRef href="/baanerp/tc/domains/kowc#subcontracting" role="enum">Subcontracting Work Center</GUIRef> type are part of the routing. The expected subcontracting costs are part of the standard cost price.</ListItem>
		</List>
		<Paragraph>In SSA ERP, subcontracting is considered as purchasing a subcontracting item. A subcontracting item is not an item that can be kept in inventory. A subcontracting item is only used to collect the costs for subcontracting. For both planned and unplanned subcontracting, purchase orders must be generated in the <GUIRef href="/baanerp/ti/sfc/tisfc2250m000" role="session">Generate Subcontracting Purchase Orders (tisfc2250m000)</GUIRef> session. The subcontracting item is indicated on a purchase order. A cost component, of the <GUIRef href="/baanerp/tc/domains/cref#operation" role="enum">Operation Costs</GUIRef> type, is linked to the subcontracting item to collect the purchase costs. Those costs can be seen in cost price calculations and production order costing.</Paragraph>
		<Paragraph>Subcontracting rates are defined in the <GUIRef href="/baanerp/ti/cpr/ticpr1160m000" role="session">Subcontracting Rates (ticpr1160m000)</GUIRef> session under a specific <Link href="/baanerp/ti/glossary/glossary#PriCalCod.ti" role="glossary">price calculation code</Link>, by subcontractor, and by task. How subcontracting costs are calculated, and consequently, how the subcontracting rate must be interpreted, depends on the <GUIRef href="/baanerp/ti/cpr/ticpr1160m000#ticpr160.cmsc" role="formfield">Calculation Method for Subcontracting Costs</GUIRef> field in the <GUIRef href="/baanerp/ti/cpr/ticpr1160m000" role="session">Subcontracting Rates (ticpr1160m000)</GUIRef> details session. For more information, see <Link href="/baanerp/ti/onlinemanual/000084" role="manual">Calculating subcontracting costs</Link>.</Paragraph>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/ti/onlinemanual/000084" role="manual">Calculating subcontracting costs</Link>
		</RelTopic>
		<RelTopic><Link href="/baanerp/ti/onlinemanual/000023" role="manual">Standard cost price</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
