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<ManualTopic ID="/baanerp/ti/onlinemanual/000451" xml:lang="en">
   <Header>
      <Title>Item subcontracting - setup</Title>
      <Keyword type="header" order="d1e2067275">
         <Level1>item subcontracting</Level1>
      </Keyword>
      <Keyword type="header" order="d1e2067278">
         <Level1>subcontracting</Level1>
         <Level2>item</Level2>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>You can use item subcontracting to subcontract an item's entire
		production process. If you apply item subcontracting, <Emphasis>no</Emphasis> production order is created.</Paragraph>
      <Paragraph>For item subcontracting, set up the following data:</Paragraph>
   </AimSection>
   <ProcedureSection>
      <Steps>
         <Step>
            <StepTitle>Implemented software components</StepTitle>
            <Paragraph>Consider the following check boxes in the <GUIRef href="/baanerp/tc/com/tccom0500m000" role="session">Implemented Software Components (tccom0500m000)</GUIRef> details session:</Paragraph>
            <List>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.smfm" role="manual">Subcontracting with Material Flow (manufacturer)</GUIRef>
               </ListItemHead>
               <ListItem>
                  <Paragraph>If you want to perform <Link href="/baanerp/ti/glossary/glossary#000412" role="glossary">full subcontracting</Link>, you must select the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.smfs" role="manual">Subcontracting with Material Flow (subcontractor)</GUIRef> check box.</Paragraph>
               </ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.trcn" role="manual">Terms and Conditions</GUIRef>
               </ListItemHead>
               <ListItem>
                  <Paragraph>Select the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.trcn" role="manual">Terms and Conditions</GUIRef> check box to implement the <GUIRef href="/baanerp/tc/trm" role="module">Terms and Conditions</GUIRef> module. You need this module if you want the subcontractor to be responsible
				  for the supply of components. In LN, by default the manufacturer is responsible for component supply.
				  In that case you do not need to set up planning data.</Paragraph>
               </ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Warehouse at the subcontractor's site</StepTitle>
            <Paragraph>Define an <Link href="/baanerp/wh/glossary/glossary#000467" role="glossary">administrative warehouse</Link> in the <GUIRef href="/baanerp/wh/wmd/whwmd2500m000" role="session">Warehouses (whwmd2500m000)</GUIRef> session. The administrative warehouse reflects the
			 external warehouse at the subcontractor's site.</Paragraph>
            <List>
               <ListIntro>Consider the following check boxes:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/wh/wmd/whwmd2500m000#tcmcs003.imgt" role="manual">Inventory Management</GUIRef>
               </ListItemHead>
               <ListItem>
                  <Paragraph>If you clear the <GUIRef href="/baanerp/wh/wmd/whwmd2500m000#tcmcs003.imgt" role="manual">Inventory Management</GUIRef> 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 <Link href="/baanerp/wh/glossary/glossary#000324" role="glossary">inbound</Link> procedure in one of the following
				  ways:</Paragraph>
                  <List>
                     <ListItem>Use automatic warehousing procedures. For more
					 information, refer to <Link href="/baanerp/wh/onlinemanual/000008" role="manual">To handle warehousing orders</Link>.</ListItem>
                     <ListItem>Update the inventory based on ReceiveDelivery messages.
					 For more information, refer to <Link href="/baanerp/wh/onlinemanual/000483" role="manual">Receipt delivery messages</Link>.</ListItem>
                  </List>
                  <Paragraph>If you clear the <GUIRef href="/baanerp/wh/wmd/whwmd2500m000#tcmcs003.imgt" role="manual">Inventory Management</GUIRef> check box, and select the <Link href="/baanerp/wh/wmd/whwmd2500m000#whwmd200.mipa" role="formfield" Update="No">Manual Inbound Process Allowed</Link> check box,
				  inventory management is not carried out, but you can do a manual
				  inbound.</Paragraph>
                  <Paragraph>Note that if you select the <GUIRef href="/baanerp/wh/wmd/whwmd2500m000#tcmcs003.imgt" role="manual">Inventory Management</GUIRef> check box, you must also use
				  automatic warehousing procedures.</Paragraph>
               </ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/wh/wmd/whwmd2500m000#tcmcs003.inep" role="manual">Include in Enterprise Planning</GUIRef>
               </ListItemHead>
               <ListItem>Select the <Link href="/baanerp/tc/mcs/tcmcs0103s000#tcmcs003.inep" role="formfield" Update="No">Include in Enterprise Planning</Link> check
				box.</ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Item related data</StepTitle>
            <Paragraph>Define the following item related data:</Paragraph>
            <List>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/ibd" role="module">Item Base Data</GUIRef>
               </ListItemHead>
               <ListItem>Define the end item that you want to subcontract in the <GUIRef href="/baanerp/tc/ibd/tcibd0101s000" role="session">Item - General (tcibd0101s000)</GUIRef> session. Select the <GUIRef href="/baanerp/tc/ibd/tcibd0101s000#tcibd001.subc" role="manual">Subcontracted</GUIRef> check box.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/ti/ipd" role="module">Item Production Data</GUIRef>
               </ListItemHead>
               <ListItem>To send material to the subcontractor, select the <GUIRef href="/baanerp/ti/ipd/tiipd0101m000#tiipd001.smfs" role="manual">Subcontracting with Material Flow</GUIRef> check box in the <GUIRef href="/baanerp/ti/ipd/tiipd0101m000" role="session">Items - Production (tiipd0101m000)</GUIRef> session.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/td/ipu" role="module">Item Purchase Data</GUIRef>
               </ListItemHead>
               <ListItem>In the <GUIRef href="/baanerp/td/ipu/tdipu0101m000" role="session">Items - Purchase (tdipu0101m000)</GUIRef> session, enter the appropriate price in the <Link href="/baanerp/td/ipu/tdipu0101m000#tdipu001.scpr" role="formfield">Subcontracting Purchase Price</Link> field.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/td/isa" role="module">Item Sales Data</GUIRef>
               </ListItemHead>
               <ListItem>In the <GUIRef href="/baanerp/td/isa/tdisa0510m000" role="session">Items - Sales Business Partner (tdisa0510m000)</GUIRef> session, enter the administrative
				warehouse defined in step 2 in the <Link href="/baanerp/td/isa/tdisa0510m000#tdisa010.stwh" role="formfield">Ship-to Warehouse</Link> field.</ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Supply data for components</StepTitle>
            <Paragraph>Regulate the supply of components to the subcontractor.
			 There are two ways:</Paragraph>
            <List>
               <ListItemHead>Order specific supply</ListItemHead>
               <ListItem>
                  <Paragraph>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 <Link href="/baanerp/wh/glossary/glossary#000419" role="glossary">supply system</Link> in the <GUIRef href="/baanerp/wh/wmd/whwmd2510m000" role="session">Warehouse - Item (whwmd2510m000)</GUIRef> session must be <GUIRef href="/baanerp/tc/domains/sups#single" role="option">Order Controlled/Single</GUIRef>, for the correct combination of component and
				  administrative warehouse.</Paragraph>
                  <Paragraph>Order specific supply can exist between manufacturer and
				  subcontractor, or directly between supplier and subcontractor:</Paragraph>
                  <List>
                     <ListTitle>Manufacturer - subcontractor</ListTitle>
                     <ListItem>
                        <Emphasis>Select</Emphasis> the <GUIRef href="/baanerp/wh/wmd/whwmd2110s000#whwmd210.sfwh" role="manual">Supply from Warehouse</GUIRef> check box in the <GUIRef href="/baanerp/wh/wmd/whwmd2510m000" role="session">Warehouse - Item (whwmd2510m000)</GUIRef> details session, for the correct combination of
					 component and administrative warehouse.</ListItem>
                     <ListItem>Supply takes place by <Link href="/baanerp/ti/glossary/glossary#000077" role="glossary">warehouse transfers</Link>.</ListItem>
                  </List>
                  <List>
                     <ListTitle>Supplier - subcontractor</ListTitle>
                     <ListItem>
                        <Emphasis>Clear</Emphasis> the <GUIRef href="/baanerp/wh/wmd/whwmd2110s000#whwmd210.sfwh" role="manual">Supply from Warehouse</GUIRef> check box in the <GUIRef href="/baanerp/wh/wmd/whwmd2510m000" role="session">Warehouse - Item (whwmd2510m000)</GUIRef> details session, for the correct combination of
					 component and administrative warehouse.</ListItem>
                     <ListItem>Enter the supplier in the <GUIRef href="/baanerp/wh/wmd/whwmd2110s000#whwmd210.sfbp" role="manual">Ship-from Business Partner</GUIRef> field and the <GUIRef href="/baanerp/wh/wmd/whwmd2110s000#whwmd210.supl" role="manual">Buy-from Business Partner</GUIRef> field.</ListItem>
                     <ListItem>Supply takes place by purchase order.</ListItem>
                  </List>
               </ListItem>
               <ListItemHead>Bulk supply</ListItemHead>
               <ListItem>
                  <Paragraph>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 <GUIRef href="/baanerp/cp" role="package">Enterprise Planning</GUIRef>. You
				  must choose one of these methods; you cannot use both methods to supply the
				  same subcontracting (that is, administrative) warehouse.</Paragraph>
                  <List>
                     <ListItemHead>Supply system</ListItemHead>
                     <ListItem>In the <GUIRef href="/baanerp/wh/wmd/whwmd2510m000" role="session">Warehouse - Item (whwmd2510m000)</GUIRef> details session, for the correct combination of
					 component and administrative warehouse, you can choose <GUIRef href="/baanerp/tc/domains/sups#tpop" role="option">Time-Phased Order Point</GUIRef>, <GUIRef href="/baanerp/tc/domains/sups#kanban" role="option">KANBAN</GUIRef>, or <GUIRef href="/baanerp/tc/domains/sups#batch" role="option">Order Controlled/Batch</GUIRef> to generate bulk supply. Note that the administrative
					 warehouse and the supplying warehouse must be either belong to the same <Link href="/baanerp/cp/glossary/glossary#000315" role="glossary">cluster</Link>, or they should not be assigned to a cluster at
					 all.</ListItem>
                     <ListItemHead>
                        <GUIRef href="/baanerp/cp" role="package">Enterprise Planning</GUIRef>
                     </ListItemHead>
                     <ListItem>To generate bulk supply using <GUIRef href="/baanerp/cp" role="package">Enterprise Planning</GUIRef>, 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 <GUIRef href="/baanerp/wh/wmd/whwmd2510m000" role="session">Warehouse - Item (whwmd2510m000)</GUIRef> details session, must be <GUIRef href="/baanerp/tc/domains/sups#single" role="option">Order Controlled/Single</GUIRef>. For more information about clusters, refer to <Link href="/baanerp/cp/onlinemanual/000301" role="manual">Clusters in Enterprise Planning</Link>.</ListItem>
                  </List>
               </ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Terms and conditions</StepTitle>
            <Paragraph>Define terms and conditions in the following
			 cases:</Paragraph>
            <List>
               <ListItem>If components are shipped by sales orders.</ListItem>
               <ListItem>If the subcontractor is responsible for the components'
				planning.</ListItem>
            </List>
            <Paragraph>Perform the following steps:</Paragraph>
            <ProcedureList>
               <ListItem>
                  <Paragraph>By means of the <Link href="/baanerp/tc/trm/tctrm1100m000" role="session">Terms and Conditions (tctrm1100m000)</Link> session, start the <Link href="/baanerp/tc/trm/tctrm1600m000" role="session">Terms and Conditions (tctrm1600m000)</Link> session to define a <Link href="/baanerp/tc/glossary/glossary#000500" role="glossary">terms and conditions agreement</Link>. The <Link href="/baanerp/tc/trm/tctrm1600m000#tctrm100.trtp" role="formfield">Terms and Conditions Type</Link> field must be <GUIRef href="/baanerp/tc/domains/trm.trtp#sales" role="option">Sales</GUIRef>.</Paragraph>
               </ListItem>
               <ListItem>
                  <Paragraph>Define a <Link href="/baanerp/tc/glossary/glossary#000503" role="glossary">terms and conditions search level</Link> for which the <Link href="/baanerp/tc/trm/tctrm1610m000#tctrm110.sa01" role="formfield">Search Attribute 1</Link> field is <GUIRef href="/baanerp/tc/domains/trm.attr#item.group" role="option">Item Group</GUIRef>, and the <Link href="/baanerp/tc/trm/tctrm1610m000#tctrm110.sa02" role="formfield">Search Attribute 2</Link> field is <GUIRef href="/baanerp/tc/domains/trm.attr#warehouse" role="option">Warehouse</GUIRef>. Select the <Link href="/baanerp/tc/trm/tctrm1610m000#tctrm110.ordr" role="formfield">Order</Link> check box and the <Link href="/baanerp/tc/trm/tctrm1610m000#tctrm110.plng" role="formfield">Planning</Link> check box.</Paragraph>
               </ListItem>
               <ListItem>
                  <Paragraph>Double-click the defined search level to start the <Link href="/baanerp/tc/trm/tctrm1610m000" role="session">Terms and Conditions Search Level - Lines (tctrm1610m000)</Link> session. In this
				  session, define the items to which the agreement applies.</Paragraph>
               </ListItem>
               <ListItem>
                  <Paragraph>Double-click the defined items to start the <Link href="/baanerp/tc/trm/tctrm1620m000" role="session">Terms and Conditions Line (tctrm1620m000)</Link> session. On the Planning tab or in
				  the <Link href="/baanerp/tc/trm/tctrm1135m000" role="session">Planning Terms and Conditions (tctrm1135m000)</Link> session,
				  select the <Link href="/baanerp/tc/trm/tctrm1135m000#tctrm135.rfsp" role="formfield">Responsible for Supply Planning</Link> check box. On the Order
				  tab or in the <Link href="/baanerp/tc/trm/tctrm1130m000" role="session">Order Terms and Conditions (tctrm1130m000)</Link> session, select <GUIRef href="/baanerp/tc/domains/ttaw#sls.order.trf" role="option">Sales Order Transfer</GUIRef> in the <Link href="/baanerp/tc/trm/tctrm1130m000#tctrm130.ttaw" role="formfield">Transfer Type</Link> field.</Paragraph>
               </ListItem>
            </ProcedureList>
            <Paragraph>For more information about agreements, refer to <Link href="/baanerp/tc/onlinemanual/000503" role="manual">To set up terms and conditions</Link>.</Paragraph>
         </Step>
         <Step>
            <StepTitle>Sales contract</StepTitle>
            <Paragraph>If components are planned by the subcontractor or shipped by
			 sales order, define a contract in the <GUIRef href="/baanerp/td/sls/tdsls3500m000" role="session">Sales Contracts (tdsls3500m000)</GUIRef> session. The <GUIRef href="/baanerp/td/sls/tdsls3500m000#tdsls300.ofbp" role="manual">Sold-to Business Partner</GUIRef> field must contain the
			 subcontractor code. Use the <Link href="/baanerp/td/sls/tdsls3500m000#tdsls300.trid" role="formfield">Terms and Conditions ID</Link> field to link the applicable
			 terms and conditions agreement.</Paragraph>
            <Paragraph>Define the rest of the contract in the <Link href="/baanerp/td/sls/tdsls3501m000" role="session">Sales Contract Lines (tdsls3501m000)</Link> session.</Paragraph>
         </Step>
         <Step>
            <StepTitle>BOM</StepTitle>
            <Paragraph>In the <GUIRef href="/baanerp/ti/bom/tibom1110m000" role="session">Bill of Material (tibom1110m000)</GUIRef> session, create the subcontracted item's
			 BOM.</Paragraph>
            <Paragraph>If the <Link href="/baanerp/ti/bom/tibom1110m000#tibom010.sbsr" role="formfield">
                  <GUIRef href="/baanerp/ti/bom/tibom1110m000#tibom010.sbsr" role="manual">Supplied by Subcontractor</GUIRef>
               </Link> 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.</Paragraph>
         </Step>
      </Steps>
   </ProcedureSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000450" role="manual">Overview of subcontracting</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000459" role="manual">Item subcontracting - procedure</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/cp/onlinemanual/000021" role="manual">Order planning, an overview</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>