MRP Subcontract

Subcontract Feature in Manufacturing is used for delivery of Raw Materials from stores to the Supplier Location. Also we can Track the Production Order of the Manufacturing Products at the Supplier's location and can get back the Finished Products from Suppliers through Purchase Order.

MRP Subcontracting Features

Provision to send product(s) with Bill of Materials to subcontracting vendor for processing.

Provision to get the processed product(s) through Purchase order.

Track of Manufacturing Process at Subcontracting Vendor's Location

Track the Used / Processed quantities of Bill of Materials and Finished Products at Subcontracting Vendor's Location

Works with Multi Company architecture

Negative Stock is controlled in all the Transactions

MRP Subcontracting Configurations

Subcontract Location Creation

Subcontract Location Assigning to Vendor

Subcontract Operation Type Creation

Work Centers Creation

Routings Creation

Bill of Materials Creation

Configuration : Subcontract Location Creation

Go to 'Location' Master Under configuration menu in Inventory module.

Create a new Location for subcontracting vendors respectively with the following parameters

Location Name = Subcontract Location

Parent Location = Partner Location

Location Type = Vendor Location

Note: Subcontract location has to be created per Vendor & company

Configuration : Subcontract Location Assigning to Vendor

Go to 'Vendor' Master Under Purchase menu in Purchase module

Create a new Vendor (if not already available) & map the newly created subcontracting location (per vendor) in the new field 'Subcontract Location' respectively

Note: Repeat this step for all subcontracting vendor(s)

Configuration : Subcontract 'Operation Type' Creation

Go to 'Operation Types' Master under 'Configuration' menu in 'Inventory' module

Create a new Operation type respectively with the following parameters

Operation Types Name = Subcontract Location

Reference Sequence = Partner Location

Configuration : Work Centers Creation

Go to 'Work Centers' Master Under 'Master Data' menu in Manufacturing module

Create a new 'Work Centers' with the below parameter to be set

Configuration : Routings Creation

Go to 'Routings' Master Under 'Master Data' menu in Manufacturing module

Create a new 'Routings' with the below parameter to be set

Configuration : Bill of Materials Creation with Subcontract

Go to 'Bill of Material' Master under 'Master data' menu in 'Manufacturing' module

Create a new 'Bill of Materials' with the below parameter to be set

Work Flow of MRP Subcontracting Module

Please find the available Stock in Stock Location for all the Bill of Materials and Product that is to be Manufactured and Purchased through MRP Subcontracting

Please find the Available Stock in Subcontract Location

Create a Manufacturing Order --> Enable the Subcontract Boolean (refer screenshot) and select the respective Subcontractor Partner (vendor)

Based on the Selected Vendor, the Raw Materials and Finished Products Location will be updated in Miscellaneous Tab.

Based on the Selected Product, the Bill of Materials and Routings will get updated automatically.

Clicking on 'Create Workorders' button, Work order will not be created, if Stock is not available in Subcontract Location.

The Below Warning will be popped up for the same

With the Newly created Subcontract Operation Type we can move the stock to Subcontract Location (respective vendor) from Stock Location

In order to deliver the Raw Materials to Subcontract Location, choose the Vendor where Subcontract location will be set as default Destination Location automatically.

BoM Products for respective finished/subcontracted parent product will be present next to 'Operations' tab where you will have to choose the Bill of Material Product and update the Quantity that is to be delivered.

Clicking on the "Update" button, the Bill of Materials for the Selected Product and their Quantities will be displayed in Operations Tab.

Once after the updation of Raw Materials, choose the Lot / Serial numbers for the Products and Validate the same to move the Stock to Subcontract Location from Stock Location

We cannot create the Workorder if only Partial Stock is available for the Raw Materials in Subcontract Location.

The Below Warning will be popped up for the same

We can also process the delivery of Raw Materials through Delivery Orders by enabling the 'Subcontract' Boolean and clicking the 'Update' button

If the Raw Materials are not reserved in Manufacturing Order, then Workorder cannot be created.

The Below Warning will be popped up for the same

Clicking on 'Create Workorders' button, Work order will be created for the same and Stock will be reserved for the Raw Materials

The Below Warning will be popped up for the same

Work order will be created along with the Raw Materials

On click of 'Start Working' Button in Work Order form, Purchase Order will be automatically created in Manufacturing screen along with the Product details.

Please find the Purchase Order Menu in Manufacturing Order





Purchase Order is created with the Source as Manufacturing Order. Also Unit Price and Taxes alone will be editable in Purchase Order Screen.

Confirm the Purchase Order to create the Receipts for the Manufactured Product

Clicking on the Validate button in Receipts, the below mentioned warning will be popped up as Workorder is not completed for the Manufacturing Order.

Before completing the Workorder, Kindly choose the Lot / Serial Number for the Raw Materials

The Below Warning will be popped up for the same

After selecting the Lot / Serial Numbers for the Raw Materials, We can complete the Work Order

Kindly find the Completed Work Order Screen

Once after the completion of Work Orders, Consumed Quantities will be updated in Manufacturing Order

Once after the completion of Work Orders, We cannot validate the purchase receipts as stock movements will not be processed.

The Below Warning will be popped up, if purchase receipts are validated

Clicking on 'Mark as Done' button in Manufacturing screen, Manufacturing order will be completed and stock movements will be processed for all the Raw materials and Finished Products.

Please find the Validated Raw Materials





Please find the Validated Finished Products

Clicking on 'Validate' button in Purchase Receipts, Stock movements be processed for the Finished Product from Subcontract Location to Stock Location.

Please find the Reduced Stock in Subcontract Location

Please find the Available Stock in Stock Location for the Finished Product.

Same Procedure of Work Order Concept will be followed for Produce Concept through MRP Subcontract