| To set up operation subcontracting (subcontractor’s side) |  |
| This topic describes how to set up your system to support the execution of operations for a manufacturer as a subcontractor. The transfer of components and subassemblies is supported. Note For the subcontractor, the procedure for item subcontracting is the same as the procedure for operation subcontracting. Setup Step 1. Implemented software components Consider the following check boxes in the Implemented Software Components (tccom0500m000) details session: Subcontracting with Material Flow (subcontractor) If you want to support the flow of subassemblies and components during the subcontracting process, you must select the Subcontracting with Material Flow (manufacturer) check box. Allocation and Hard Pegging Allocation and hard pegging is required to identify subassemblies uniquely. If the Allocation and Hard Pegging check box is selected, every subassembly is allocated to a specific SFC order by means of a reference number. Terms and Conditions In ERP LN, the manufacturer is by default responsible to supply components for subcontracting. However, if a component is transferred by sales order, or if the subcontractor is responsible for the component's planning, you must use the Terms and Conditions module to specify this. To use Terms and Conditions, you must select the Terms and Conditions check box. Step 2. Item data for subcontracted item and subassemblies Subassemblies In the Items - General (tcibd0501m000) details session, define two items for which the Subassembly check box is selected. These items represent respectively the subassembly sent by the manufacturer to the subcontractor, and the subassembly sent back by the subcontractor after work is done. The item type of the subassembly you send back to the manufacturer must be Manufactured. If the manufacturer sends no subassembly to the subcontractor but only material, you just need to define an item code for the subassembly created by the subcontractor. Define the following data for the subassemblies: Warehouse In the Items - Ordering (tcibd2500m000) session, find the defined subassemblies. For the subassembly that you receive from the manufacturer, enter in the Warehouse field the warehouse in which you receive the subassembly. For the subassembly that you send back to the manufacturer, enter the warehouse from which you send the subassembly. Cost price To generate an effective cost component structure, define the assemblies' costing data in the Items - Costing (ticpr0107m000) session. Calculate and actualize the cost price in the Calculate Cost and Valuation Prices (ticpr2210m000) session while the Actualize Standard Cost and Valuation Prices check box is selected. Price For the item that is sent back by the subcontractor, you must determine the price the manufacturer pays to the subcontractor. Step 3. Terms and conditions Define terms and conditions in the following cases: If components are shipped by sales orders. If the the manufacturer is responsible for the components' planning. Perform the following steps: By means of the Terms and Conditions (tctrm1100m000) session, start the Terms and Conditions (tctrm1600m000) session to define a terms and conditions agreement. The Terms and Conditions Type field must be Purchase. Define a terms and conditions search level for which the Search Attribute 1 field is Item Group, and the Search Attribute 2 field is Warehouse. Select the Order check box and the Planning check box. Double-click the defined search level to start the Terms and Conditions Search Level - Lines (tctrm1610m000) session. In this session, define the items to which the agreement applies. Double-click the defined items to start the Terms and Conditions Line (tctrm1620m000) session. On the Planning tab or in the Planning Terms and Conditions (tctrm1135m000) session, select the Supply Planning by Supplier check box. On the Order tab or in the Order Terms and Conditions (tctrm1130m000) session, select Sales Order Transfer in the Transfer Type field. For more information about agreements, refer to To set up terms and conditions. Step 4. Purchase contract If components are planned by the subcontractor or shipped by sales order, define a contract in the Purchase Contracts (tdpur3100m000) session. The Buy-from Business Partner field must contain the manufacturer's code. Use the Terms and Conditions ID field to link the applicable terms and conditions agreement. Define the rest of the contract in the Purchase Contract Lines (tdpur3101m000) session. Step 5. User profile purchase Define your user profile in Sales Control so that ERP LN can generate and handle sales orders properly. Step 6. Work center and shop floor warehouse In the Work Centers (tirou0101m000) session, define the work centers as a work center for regular production orders. Do not select work center type Subcontracting Work Center. Link the following information to the subcontracting work center: In the Shop Floor Warehouse field, you can enter a shop floor warehouse. This warehouse is used to monitor the subassemblies' and components' inventory levels. In the Shop Floor Control Parameters (tisfc0500m000) session, select the Use of Shop Floor Warehouses check box. Step 7. Routing In the Routing Operations (tirou1102m000) session, link the defined subassemblies, warehouses, and work centers. Link to the first subcontracted operation: The subassembly which represents the product that the manufacturer sends to the subcontractor. It is recommended that the subassembly warehouse equals the BOM warehouse of the materials sent to the subcontractor. Link to the other subcontracted operations: The applicable work center. Link to the last subcontracted operation: The subassembly which represents the product that you send back to the subcontractor. The warehouse in which you receive the subassembly takes a default value from the Warehouse field in the Items - Ordering (tcibd2500m000) session. Step 8. BOM Optionally, in the Bill of Material (tibom1110m000) session, enter the operation number for which the subcontractor requires the material in the Operation field. Related topics Overview of subcontracting To set up operation subcontracting (subcontractor’s side) To execute subcontracted operations (subcontractor’s side) |