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Vendor to Vendor to Warehouse Process Flow?

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Posted on by PS-14071808-0

Hello,

I am having some trouble with understanding how I can make this into a flow in Business Central. I have been reading about Subcontracting and the flow is a bit clunky for us and I am not sure how else to describe what needs to happen for us besides subcontracting but I might be just narrowing it down too much.

Currently:
- We buy an item from Vendor A.
- Vendor A ships Item 1 to Vendor B for us and bills us for the item.

- Vendor B processes the item with some loss but not always and ships us what remains and charges us for their work. We do not know the loss until they confirm what is being shipped.

The rabbit hole I went down was with Subcontracting where I set up 2 Items 1 and 2.

Item 2 has a BOM that consumes Item 1 and has routing that is setup for subcontracting with Vendor B.

The flow that everything I was reading said to use then is:

- Purchase Order Vendor A for Item 1

- Receive Item into a subcontractor bin

- Create a production order for Item 2

- Go to sub-contractor worksheet and click calculate subcontracts

- Accept the line for the production order in question

- Receive the Purchase Order on the Purchase order without using warehouse activities

- This will add finished QTY to the production order, but the production order must then be closed out by a person.

Issues:

- Adding the production order to the system seems odd as our team uses that as a queue and nothing that I saw made the production order look different besides the routing which our team does not currently go into.

- Since the production order is required for the subcontract worksheet to function, the person making the purchase orders is not the same person that manages the production orders and seems like a weird cross over

- We use the warehouse receipts and put-aways, using insight works scanning. We would have Purchase orders that no longer follow that same flow for receiving.

- We have lot tracking for the item, meaning before we can receive the Purchase order the tracking lines need to be added to the production order. Again outside of our normal flow for receiving and production orders.

Needs:

We need a way to track inventory and costs for items bought under one vendor sent directly to another vendor before getting the item to our warehouse.

The way that I found seem to be completely outside our normal processes that the sub-contracting worksheet is using but is the same space which is potentially confusing for the team. The team and I are thinking there are other ways to accomplish what we need but all we are finding is the subcontracting worksheet.

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Dynamics 365 Business Central

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André Arnaud de Cal... 300,777 Super User 2025 Season 2 on at

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Moved the question from the Dynamics 365 general to the Dynamics 365 Business central forum.

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DAnny3211 11,397 on at

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Hi there,

Thanks for the detailed explanation—this is a common challenge when dealing with multi-vendor logistics and partial processing flows. While the subcontracting worksheet is the standard approach in Business Central, it can indeed feel clunky when your process doesn't fully align with traditional production workflows.

Here are a few suggestions to consider:

Custom Flow Using Transfer Orders or Item Tracking:
Since Vendor A ships directly to Vendor B, you might consider using transfer orders or item tracking to reflect the movement of goods between vendors, even if it's not a physical transfer within your own warehouse.

Use of Additional Fields or Tables:
You could customize the item card or purchase order lines to include fields that track the intermediate vendor (Vendor B), expected loss, and actual received quantity. This helps maintain visibility without relying solely on production orders.

Warehouse Integration:
Since you're using Insight Works and warehouse receipts, consider creating a custom receiving flow that allows for lot tracking and partial receipts based on Vendor B’s confirmation. This could be triggered by a separate document or approval step.

Role Separation:
To reduce confusion between purchasing and production teams, you might implement workflow approvals or notifications that clearly assign responsibilities when a subcontracting scenario is detected.

Alternative to Subcontracting Worksheet:
If the worksheet is too rigid, you could explore custom pages or reports that mimic its logic but are tailored to your process—especially if the loss and final quantity are only known after Vendor B’s processing.

Let me know if this helps!
If it solves your issue, please mark this answer as accepted so others can benefit too. 😊

Best regards,
Daniele

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Ben Baxter 6,557 Super User 2025 Season 2 on at

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You described the process well. I have a minor suggestion that is fully optional.

You can take the receipt of Item 1 off the handhelds by using a separate Location (i.e. Vendor B) rather than your standard Location + Bin. This will also help you identify the Quantity on Hand at Vendor B. Using Routing Link Codes, you can have the material consumption pull from the Vendor B Location based on the receipt of the finished good.

The Subcontracting Worksheet gives you a document you can send to Vendor B to notify them of the work. It also helps create the payable to the Vendor, which if you go without the subcontract PO, you would be manually recording via a Journal.

Yes, you still need to manually Finish the Production Order when the production is complete, but this also allows for a final verification of the data before closing it.

Best Regards,

Ben Baxter

Accent Software Inc

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Sahib Dino 196 on at

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Hey there,

I’ve been digging into how we might set up a flow in Business Central to match a pretty specific process we use, but I’m running into some issues. I started looking into subcontracting as a possible solution, but it feels clunky and might not be the right fit. Maybe I’m overfocusing on that one option, but here’s what we’re trying to do:

Current flow:

We purchase Item 1 from Vendor A.

Vendor A ships Item 1 directly to Vendor B.

Vendor A invoices us for the item.

Vendor B processes Item 1 (sometimes there’s loss, sometimes not), then ships the remaining product to us.

Vendor B invoices us for their service—but we don’t know the final quantity or loss until they confirm shipment.

The path I explored was using subcontracting with a BOM and routing:

Set up Item 2 with a BOM that consumes Item 1 and includes routing for Vendor B.

Create a PO for Vendor A, receive Item 1 into a subcontractor bin.

Create a production order for Item 2.

Use the subcontracting worksheet to calculate and accept lines.

Receive the original PO without warehouse activities (so it flows to the production order).

Close the production order manually once it's processed.

But this flow isn’t working smoothly for us:

Our team uses production orders as a queue, and nothing about the subcontract setup makes the production order look different—especially since we don’t use routing much.

The people creating POs aren’t the same ones managing production orders. This creates weird handoffs and overlaps.

We use warehouse receipts and put-away processes with Insight Works scanning. This approach seems to sidestep those completely.

We also have lot tracking requirements, and receiving via a production order means we have to pre-assign tracking lines, which is outside our normal process.

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