| Item subcontracting - setup |  |
| You can use item subcontracting to subcontract an item's entire production process. If you apply item subcontracting, no production order is created. For item subcontracting, set up the following data: Step 1. Implemented software components Consider the following check boxes in the Implemented Software Components (tccom0500m000) details session: Subcontracting with Material Flow (manufacturer) If you want to perform full subcontracting, you must select the Subcontracting with Material Flow (subcontractor) check box. Terms and Conditions Select the Terms and Conditions check box to implement the Terms and Conditions module. You need this module if you want the subcontractor to be responsible for the supply of components. In ERP LN, by default the manufacturer is responsible for component supply. In that case you do not need to set up planning data. Step 2. Warehouse at the subcontractor's site Define an administrative warehouse in the Warehouses (whwmd2500m000) session. The administrative warehouse reflects the external warehouse at the subcontractor's site. Consider the following check boxes: Inventory Management If you clear the Inventory Management check box, you indicate that the subcontractor carries out the warehouse's inbound activities, which is a logical choice in case of subcontracting. You must complete the inbound procedure in one of the following ways: Use automatic warehousing procedures. For more information, refer to To handle warehousing orders. Update the inventory based on ReceiveDelivery messages. For more information, refer to Receipt delivery messages. If you clear the Inventory Management check box, and select the Manual Inbound Process Allowed check box, inventory management is not carried out, but you can do a manual inbound. Note that if you select the Inventory Management check box, you must also use automatic warehousing procedures. Include in Enterprise Planning Select the Include in Enterprise Planning check box. Step 3. Item related data Define the following item related data: Item Base Data Define the end item that you want to subcontract in the Item - General (tcibd0101s000) session. Select the Subcontracted check box. Item Production Data To send material to the subcontractor, select the Subcontracting with Material Flow check box in the Items - Production (tiipd0101m000) session. Item Purchase Data In the Items - Purchase (tdipu0101m000) session, enter the appropriate price in the Subcontracting Purchase Price field. Item Sales Data In the Items - Sales Business Partner (tdisa0510m000) session, enter the administrative warehouse defined in step 2 in the Ship-to Warehouse field. Step 4. Supply data for components Regulate the supply of components to the subcontractor. There are two ways: Order specific supply Order specific supply means that supply is linked to the subcontracting purchase order. The supplied quantity is the quantity required for the purchase order. To use order specific supply, the component's supply system in the Warehouse - Item (whwmd2510m000) session must be Order Controlled/Single, for the correct combination of component and administrative warehouse. Order specific supply can exist between manufacturer and subcontractor, or directly between supplier and subcontractor: Manufacturer - subcontractor Select the Supply from Warehouse check box in the Warehouse - Item (whwmd2510m000) details session, for the correct combination of component and administrative warehouse. Supply takes place by warehouse transfers. Supplier - subcontractor Clear the Supply from Warehouse check box in the Warehouse - Item (whwmd2510m000) details session, for the correct combination of component and administrative warehouse. Enter the supplier in the Ship-from Business Partner field and the Buy-from Business Partner field. Supply takes place by purchase order. Bulk supply Bulk supply means that components are sent to the subcontractor anonomously, independent of the subcontracting purchase order. There are two ways to generate bulk supply: using a specific supply system, or by Enterprise Planning. You must choose one of these methods; you cannot use both methods to supply the same subcontracting (that is, administrative) warehouse. Supply system In the Warehouse - Item (whwmd2510m000) details session, for the correct combination of component and administrative warehouse, you can choose Time-Phased Order Point, KANBAN, or Order Controlled/Batch to generate bulk supply. Note that the administrative warehouse and the supplying warehouse must be either belong to the same cluster, or they should not be assigned to a cluster at all. Enterprise Planning To generate bulk supply using Enterprise Planning, the administrative warehouse must be in a different cluster than the main warehouse. Furthermore, distribution relations must be defined between the two warehouses. The supply system defined in the Warehouse - Item (whwmd2510m000) details session, must be Order Controlled/Single. For more information about clusters, refer to Clusters in Enterprise Planning. Step 5. Terms and conditions Define terms and conditions in the following cases: If components are shipped by sales orders. If the subcontractor 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 Sales. 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 Responsible for Supply Planning 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 6. Sales contract If components are planned by the subcontractor or shipped by sales order, define a contract in the Sales Contracts (tdsls3500m000) session. The Sold-to Business Partner field must contain the subcontractor code. Use the Terms and Conditions ID field to link the applicable terms and conditions agreement. Define the rest of the contract in the Sales Contract Lines (tdsls3501m000) session. Step 7. BOM In the Bill of Material (tibom1110m000) session, create the subcontracted item's BOM. If the Supplied by Subcontractor check box is cleared, the components are sent to the subcontractor to be used in the subcontracted item. If this check box is selected, the components are directly supplied by the subcontractor. Related topics Overview of subcontracting Item subcontracting - procedure Order planning, an overview |