Understanding Subcontract Manufacturing
A subcontract manufacturing order works similarly to a standard manufacturing order, with a few key differences in configuration, and it follows its own lifecycle from creation to completion.
Key Differences From a Standard Manufacturing Order
| Aspect | Standard Manufacturing Order | Subcontract Manufacturing Order |
|---|---|---|
| Location | Any manufacturing location. | Must be a Warehouse-only location representing the subcontractor. |
| Job Cards | Job Cards are generated to allocate work centres. | Job Cards are not generated, since the manufacturing operations are performed by the vendor. |
Insight: Since Job Cards are not generated for a subcontract manufacturing order, you cannot log work centre time or track shop floor progress for it. Progress is tracked instead through the Purchase Order and material transfers created for the vendor.
Lifecycle of a Subcontract Manufacturing Order
- Draft – The subcontract manufacturing order is created but not yet finalised. All details can still be edited.
- Confirmed – The manufacturing order is reviewed and confirmed, locking in the production plan.
- Released – The manufacturing order is released. Since Job Cards are not generated, this stage prepares the order for purchase order creation instead of work centre allocation.
- Create Purchase Order – A Purchase Order is created for the vendor, covering the configured Service Items.
- In Progress – The vendor’s production work has started. Components move to In Progress status.
- Completed – The vendor’s production work is finished, and the manufactured item is added to your inventory.
Note: You can mark a subcontract manufacturing order as In Progress as soon as its Purchase Order is created, even if the Purchase Order is still in the Draft status. The Purchase Order does not need to be sent to the vendor or confirmed for the manufacturing order to move to In Progress.
Note: A subcontract manufacturing order can also be cancelled before completion. See Cancel a Subcontract Manufacturing Order for the exact steps and conditions.