How to send products for manufacturing at subcontractors in Dynamics NAV

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The subcontractor functionality in Dynamics NAV is fairly simple:

  • Create a new work center
  • Assign a vendor to the work center
  • Decide if the pricing should be calculated from time or produced units
  • Set the capacity to handle a specific cost price
  • Calculate calendar

Now the capacity can be used as a subcontractor in the routings:

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The purchase flow and adding cost to the Work in Progress (WIP) works quite well using the subcontractor worksheet.

 

However, what about the item flow?

 

When items are sent to a subcontractor as components for a production, it is not apparent that the items are no longer in production area.

  • The Inventory Valuation—WIP report will show the material as being a part of the WIP.
  • The report “Subcontractor Dispatch List” will show, that the items were scheduled to be sent to a subcontractor, but not whether or not they have been sent.

Therefore, discrepancies will not be revealed until a stock take is made.

It is therefore necessary to make a setup that can visualize the items at subcontractors:

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This can be done by creating one location for each subcontractor.

 

Firstly, the subcontractor:

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With the posting:

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And the scheduling:

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Lastly the Warehouse part:

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Don’t forget to calculate the calendar!

 

I always do Smiley

 

Now the Location:

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The location must be set up to use warehouse management:

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And with only one bin created: Default.

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The production order must be set up to the new location code:

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Notice that I decided to drive to the vendor myself to pick up the painted frames. If I needed transport from the vendor and home I would have given the location code EXT_VENDOR on the production order line and use a transfer order to transport the items back to my location.

 

The routing looks like this:

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The cost price must be applied here. The Description will be the description of the purchase order line.

 

If the subcontractor is placed last, the output will be generated on posting the receipt of the purchase order!

So if you want to control the output yourself, you have to add an extra operation after the subcontracting operation.

 

The components will be given the external vendor location code:

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I have applied backward flushing combined with a routing link so the components will automatically be removed from the inventory when the purchase order is posted.

The Bin Code is calculated automatically when entering the location code.

 

Now it is necessary to transfer items to the subcontractor location before the production order can be processed. If items are on a location code already, a transfer order can be used. If the items are on the blank location, then it is necessary to use the Item Reclassification Journal.

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Looking at the availability:

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The first operation of the production order can now be processed in the production journal:

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Next the purchase order must be made from the subcontracting journal:

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And the the purchase order must be posted:

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Lastly, the last operation must be posted in the production journal:

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After everything is posted, the item transactions look like this:

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The capacity transactions look like this:

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And the statistics on the production order:

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Seems like the subcontractor is better at estimating than we are ourselves Smiley

 

Notice that the Item I used was NOT a produced item and the routing and BOM was applied directly on the production order.

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