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<ManualTopic ID="/baanerp/ti/onlinemanual/000461" xml:lang="en">
   <Header>
      <Title>To set up operation subcontracting (subcontractor’s side)</Title>
      <Keyword type="header" order="d1e2068867">
         <Level1>Subcontracting</Level1>
         <Level2>with material supply</Level2>
      </Keyword>
      <Keyword type="header" order="d1e2068872">
         <Level1>Subcontracting with material supply</Level1>
         <Level2>setup</Level2>
      </Keyword>
      <Keyword type="header" order="d1e2068877">
         <Level1>Setup</Level1>
         <Level2>subcontracting with material supply</Level2>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>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.</Paragraph>
   </AimSection>
   <Note>
      <SectionTitle>Note</SectionTitle>
      <Paragraph>For the subcontractor, the procedure for <Link href="/baanerp/ti/glossary/glossary#000412" role="glossary">item subcontracting</Link> is the same as the procedure for <Link href="/baanerp/ti/glossary/glossary#000411" role="glossary">operation subcontracting</Link>.</Paragraph>
   </Note>
   <ProcedureSection>
      <SectionTitle>Setup</SectionTitle>
      <Steps>
         <StepsIntro>Before the actual subcontracting starts, you must set up the
		  following data:</StepsIntro>
         <Step>
            <StepTitle>Implemented software components</StepTitle>
            <List>
               <ListIntro>Consider the following check boxes in the <GUIRef href="/baanerp/tc/com/tccom0500m000" role="session">Implemented Software Components (tccom0500m000)</GUIRef> details session:</ListIntro>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.smfs" role="manual">Subcontracting with Material Flow (subcontractor)</GUIRef>
               </ListItemHead>
               <ListItem>If you want to support the flow of subassemblies and
				components during the subcontracting process, you must select the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.smfm" role="manual">Subcontracting with Material Flow (manufacturer)</GUIRef> check box.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.alhp" role="manual">Allocation and Hard Pegging</GUIRef>
               </ListItemHead>
               <ListItem>Allocation and hard pegging is required to identify
				subassemblies uniquely. If the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.alhp" role="manual">Allocation and Hard Pegging</GUIRef> check box is selected,
				every subassembly is allocated to a specific SFC order by means of a reference
				number.</ListItem>
               <ListItemHead>
                  <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.trcn" role="manual">Terms and Conditions</GUIRef>
               </ListItemHead>
               <ListItem>In 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 <GUIRef href="/baanerp/tc/trm" role="module">Terms and Conditions</GUIRef> module to specify this. To use <GUIRef href="/baanerp/tc/trm" role="module">Terms and Conditions</GUIRef>, you must select the <GUIRef href="/baanerp/tc/com/tccom0100s000#tccom000.trcn" role="manual">Terms and Conditions</GUIRef> check box.</ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Item data for subcontracted item and
			 subassemblies</StepTitle>
            <List>
               <ListItemHead>Subassemblies</ListItemHead>
               <ListItem>
                  <Paragraph>In the <GUIRef href="/baanerp/tc/ibd/tcibd0501m000" role="session">Items - General (tcibd0501m000)</GUIRef> details session, define two items for which the <GUIRef href="/baanerp/tc/ibd/tcibd0101s000#tcibd001.sayn" role="manual">Subassembly</GUIRef> check box is selected. These items
				  represent respectively the <Link href="/baanerp/ti/glossary/glossary#000000000000026" role="glossary">subassembly</Link> 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 <GUIRef href="/baanerp/tc/domains/kitm#manufacture" role="option">Manufactured</GUIRef>.</Paragraph>
                  <Paragraph>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.</Paragraph>
                  <List>
                     <ListIntro>Define the following data for the
					 subassemblies:</ListIntro>
                     <ListItemHead>Warehouse</ListItemHead>
                     <ListItem>
                        <Paragraph>In the <GUIRef href="/baanerp/tc/ibd/tcibd2500m000" role="session">Items - Ordering (tcibd2500m000)</GUIRef> session, find the defined subassemblies. For the
						subassembly that you receive from the manufacturer, enter in the <GUIRef href="/baanerp/tc/ibd/tcibd2100s000#tcibd200.cwar" role="manual">Warehouse</GUIRef> 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.</Paragraph>
                     </ListItem>
                     <ListItemHead>Cost price</ListItemHead>
                     <ListItem>
                        <Paragraph>To generate an effective cost component structure,
						define the assemblies' costing data in the <GUIRef href="/baanerp/ti/cpr/ticpr0107m000" role="session">Items - Costing (ticpr0107m000)</GUIRef> session. Calculate and actualize the cost price in the <GUIRef href="/baanerp/ti/cpr/ticpr2210m000" role="session">Calculate Cost and Valuation Prices (ticpr2210m000)</GUIRef> session while the <GUIRef href="/baanerp/ti/cpr/ticpr2210m000#actualize.copr" role="manual">Actualize Standard Cost and Valuation Prices</GUIRef> check
						box is selected.</Paragraph>
                     </ListItem>
                     <ListItemHead>Price</ListItemHead>
                     <ListItem>
                        <Paragraph>For the item that is sent back by the subcontractor,
						you must determine the price the manufacturer pays to the
						subcontractor.</Paragraph>
                     </ListItem>
                  </List>
               </ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>Terms and conditions</StepTitle>
            <List>
               <ListIntro>Define terms and conditions in the following
				cases:</ListIntro>
               <ListItem>If components are shipped by sales orders.</ListItem>
               <ListItem>If the the manufacturer is responsible for the components'
				planning.</ListItem>
            </List>
            <ProcedureList>
               <ListIntro>Perform the following steps:</ListIntro>
               <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#purchase" role="option">Purchase</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.spbs" role="formfield">Supply Planning by Supplier</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>Purchase contract</StepTitle>
            <Paragraph>If components are planned by the subcontractor or shipped by
			 sales order, define a contract in the <GUIRef href="/baanerp/td/pur/tdpur3100m000" role="session">Purchase Contracts (tdpur3100m000)</GUIRef> session. The <GUIRef href="/baanerp/td/pur/tdpur3100m000#tdpur300.otbp" role="manual">Buy-from Business Partner</GUIRef> field must contain the
			 manufacturer's code. Use the <Link href="/baanerp/td/pur/tdpur3100m000#tdpur300.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/pur/tdpur3101m000" role="session">Purchase Contract Lines (tdpur3101m000)</Link> session.</Paragraph>
         </Step>
         <Step>
            <StepTitle>User profile purchase</StepTitle>
            <Paragraph>Define your <Link href="/baanerp/td/glossary/glossary#000168" role="glossary">user profile</Link> in <GUIRef href="/baanerp/td/sls" role="module">Sales Control</GUIRef> so that LN can generate and
			 handle sales orders properly.</Paragraph>
            <Paragraph/>
         </Step>
         <Step>
            <StepTitle>Work center and shop floor warehouse</StepTitle>
            <Paragraph>In the <GUIRef href="/baanerp/ti/rou/tirou0101m000" role="session">Work Centers (tirou0101m000)</GUIRef> session, define the work centers as a work center for
			 regular production orders. Do not select work center type <GUIRef href="/baanerp/tc/domains/kowc#subcontracting" role="option">Subcontracting Work Center</GUIRef>.</Paragraph>
            <List>
               <ListIntro>Link the following information to the subcontracting work
				center:</ListIntro>
               <ListItem>In the <GUIRef href="/baanerp/ti/rou/tirou0101m000#tirou001.wipw" role="manual">Shop Floor Warehouse</GUIRef> field, you can enter a <Link href="/baanerp/ti/glossary/glossary#WIPWareho_ti" role="glossary">shop floor warehouse</Link>. This warehouse is used to monitor
				the subassemblies' and components' inventory levels.</ListItem>
            </List>
            <Paragraph>In the <GUIRef href="/baanerp/ti/sfc/tisfc0500m000" role="session">Shop Floor Control Parameters (tisfc0500m000)</GUIRef> session, select the <GUIRef href="/baanerp/ti/sfc/tisfc0100s000#tisfc000.uwwh" role="manual">Use of Shop Floor Warehouses</GUIRef> check box.</Paragraph>
         </Step>
         <Step>
            <StepTitle>Routing</StepTitle>
            <Paragraph>In the <GUIRef href="/baanerp/ti/rou/tirou1102m000" role="session">Routing Operations (tirou1102m000)</GUIRef> session, link the defined subassemblies, warehouses,
			 and work centers.</Paragraph>
            <List>
               <ListItemHead>Link to the first subcontracted operation:</ListItemHead>
               <ListItem>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.</ListItem>
               <ListItemHead>Link to the other subcontracted operations:</ListItemHead>
               <ListItem>The applicable work center.</ListItem>
               <ListItemHead>Link to the last subcontracted operation:</ListItemHead>
               <ListItem>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 <GUIRef href="/baanerp/tc/ibd/tcibd2100s000#tcibd200.cwar" role="manual">Warehouse</GUIRef> field in the <GUIRef href="/baanerp/tc/ibd/tcibd2500m000" role="session">Items - Ordering (tcibd2500m000)</GUIRef> session.</ListItem>
            </List>
         </Step>
         <Step>
            <StepTitle>BOM</StepTitle>
            <Paragraph>Optionally, in the <GUIRef href="/baanerp/ti/bom/tibom1110m000" role="session">Bill of Material (tibom1110m000)</GUIRef> session, enter the operation number for which the
			 subcontractor requires the material in the <Link href="/baanerp/ti/bom/tibom1110m000#tibom010.opno" role="formfield">
                  <GUIRef href="/baanerp/ti/bom/tibom1110m000#tibom010.opno" role="manual">Operation</GUIRef>
               </Link> field.</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/000461" role="manual">To set up operation subcontracting (subcontractor’s side)</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/ti/onlinemanual/000462" role="manual">To execute subcontracted operations (subcontractor’s side)</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>