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Order subcontracting

You can create subcontracting purchase orders in two ways:

  • Directly from a production order routing, when you want to order a specific operation right away.
  • Using the subcontracting worksheet, when you want to review and batch-create purchase orders for multiple production orders at once.

Both approaches produce the same result: a purchase order linked to the production order routing.

Create a subcontracting purchase order from a production order

The following steps describe how to create a subcontracting purchase order from a released production order.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Released Production Orders, and then choose the related link.
  2. Open the production order.
  3. On the production order lines, select the line for which you want to order subcontracting.
  4. Choose the Routing action to view the operations.
  5. Select the routing line that contains the subcontracting operation you want to order. You can select multiple routing lines.
  6. Choose the Create Subcontracting Order action.
  7. On the confirmation page, choose Yes.

Business Central creates a purchase order with the information from your setup. The subcontractor prices are also transferred. You can send or print the purchase document to your vendor.

Note

If you select multiple routing lines, each line creates its own purchase order. Purchase orders aren't consolidated, even when two lines share the same subcontractor.

Create subcontracting purchase orders with the worksheet

The subcontracting worksheet lets you find production orders with material ready to send to a subcontractor and batch-create purchase orders for subcontracted operations. The worksheet functions like the planning worksheet: it calculates the needed supply (purchase orders), which you review and then create with the Carry Out Action Message action.

Note

Only production orders with a status of Released can be accessed and used from the subcontracting worksheet.

Calculate the subcontracting worksheet

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Subcontracting Worksheets, and then choose the related link.

  2. To calculate the worksheet, choose the Calculate Subcontracts action.

  3. On the Calculate Subcontracts page, set filters for the subcontracted operations, or the work centers where they're performed, to calculate only the relevant production orders.

  4. Choose the OK button.

    Review the lines on the Subcontracting Worksheets page. The information in this worksheet comes from the production order and production order routing lines and flows to the purchase order when that document is created. You can delete a row from the worksheet without affecting the original information, just as you can with the other worksheets. The information reappears the next time you run the Calculate Subcontracts action.

Create purchase orders from the worksheet

  1. On the Subcontracting Worksheets page, choose the Carry Out Action Message action.
  2. Select the Print Orders field to print the purchase order as it's created.
  3. Choose the OK button.

If all subcontracted operations are sent to the same vendor location, then only one purchase order is created.

The worksheet line that was turned into a purchase order is deleted from the worksheet. After a purchase order is created, it doesn't appear in the worksheet again.

Use the Subcontracting Details FactBox

On the purchase order, the Subcontracting Details FactBox shows related production orders, transfer orders, routing operations, components, and subcontractor prices for the selected purchase line. Choose a value to open the related document or list.

View subcontracting purchase orders

You can view the purchase order lines for a subcontracting operation directly from the routing.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Released Production Orders, and then choose the related link.
  2. Open the production order.
  3. On the production order lines, select the line.
  4. Choose the Routing action to view the operations.
  5. Select the routing line that contains the subcontracting operation.
  6. Choose Subcontracting Purchase Order Lines action.
  7. To view the purchase order, choose the Show Document action.

In addition to the purchase order and production order, you can print a subcontracting dispatch list to send with the unfinished product.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Purchase Orders, and then choose the related link.
  2. Open the purchase order for subcontracting.
  3. Choose the Print Subcontractor Dispatching List action.
  4. On the request page, specify your selection and output options.
  5. Choose Print or Preview to print or send the report.

Post subcontracting purchase orders

After subcontracting purchase orders are created, they can be posted. Receiving the order posts a capacity ledger entry to the production order, and invoicing the order posts the direct cost of the purchase order to the production order.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Purchase Orders, and then select the related link.

  2. Open a purchase order that was created from a production order routing or from the subcontracting worksheet.

    On the purchase order lines, the Prod. Order No., Prod. Order Line No., Operation No., and Work Center No. fields are filled in with information from the source production order.

  3. Choose the Post action.

When the purchase is posted as received, an output journal entry is automatically posted for the production order if the subcontract operation is the last operation on the production order routing.

Caution

Posting output automatically for an ongoing production order when subcontracted items are received might not be desired. The expected output quantity that is posted might differ from the actual quantity, and the posting date of the automatic output can be misleading.

To avoid that the expected output of a production order is posted when subcontract purchases are received, make sure the subcontracted operation isn't the last one. Alternatively, insert a new last operation for the final output quantity.

When the purchase order is posted as invoiced, the direct cost of the purchase order is posted to the production.

Important

You must invoice subcontracting purchase orders from the order itself. You can't use the Get Receipt Lines or Get Order Lines actions on a separate purchase invoice to invoice subcontracting orders. This restriction ensures that costs are assigned correctly to the production order.

Note

Expected costs are only managed for item transactions, not for immaterial transaction types such as capacity posted via subcontract purchase orders. Posting a receipt might trigger posting of output, but these transactions are separate, and the expected cost of output is calculated independently.

Undo subcontracting receipts

You can undo subcontracting receipts before you post them as invoiced. To undo a subcontracting receipt, follow these steps:

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Posted Purchase Receipts, and then choose the related link.
  2. Open the posted purchase receipt that contains the subcontracting line.
  3. Select the line, and then choose the Undo Receipt action.

This action creates an identical line with the opposite sign in the Quantity field, along with the capacity ledger entry. If the canceled receipt line links to the last routing operation, the undo action also creates an item ledger entry of the type Output.

Note

You can't undo a receipt if it's invoiced or if the production order is finished.

Important

If posting the subcontracting receipt consumed components because of the flushing method, the undo action doesn't revert the consumption transactions. To reverse these transactions, use an output journal or the Reverse Production Order Transaction action. Learn more in Reverse and correct production order transactions.

Restrictions and validations

Business Central protects fields on subcontracting purchase orders after components or WIP items have been transferred to the subcontractor (or while transfer orders exist). This prevents inventory discrepancies between what is physically at the vendor and what the documents show.

Purchase line restrictions

When transfer orders exist for the linked production order, or stock remains at the subcontractor location, you can't change the following fields on a subcontracting purchase line:

  • Quantity
  • No.
  • Location Code
  • Bin Code
  • Unit of Measure Code

You also can't delete the purchase line.

The Variant Code field is always locked on a subcontracting purchase line that is linked to a production order, regardless of whether transfer orders or stock exist at the subcontractor.

Purchase order deletion

You can't delete a subcontracting purchase order if components or WIP items have been transferred to the subcontractor location for any of its lines.

Subcontracting overview
Manage components in subcontracting
Manufacturing
Setting Up Manufacturing
Purchasing
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