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Supply chain | Supply Chain Management, Commerce
Suggested Answer

Multiple Subcontract Operations on the Same Production Route

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Posted on by 31
All,
 
I have a complicated process that I'm trying to figure out how to create.  Current state is that we have several items that go through 3 separate subcontract operations.  Operation #1 is done by Reed Machining.  Aluminum extrusions are cut to length and then sent to us.  We turn around and send the cut parts to Linetec for painting and they get returned to us.  Then we send them back to Reed Machining for an assembly operation.  3 operations, 2 of which are performed by the same vendor.  Is there an out of the box way to manage this in D365 F&O?  I've been unable to figure out how to do this with a single production route. 
 
Thanks,
John Fortino
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  • Suggested answer
    Mariano Melo Profile Picture
    332 Moderator on at
    Hi John Fortino.
    I have been trying to replicate your process, and as I see it, you have two options depending on your needs.
     
    1- One production order without declaring Semi-finished.
    • Create a Route with operations first and last operation as vendor operations.
      • Assign a vendor resource group to track costs of that labor.
    • Create a BOM for your finished good, with your Raw materials, and the three services regarding to the subcontracting. 
      • Those services items must have assigned the operation of the route related in the BOM.
      • They must have selecter Vendor item type in the BOM and also the vendor which will provide the service
    • Finally iniciate the production order by operation, to control whether the production is in the vendor or in your facilities.
    Pros: 
    • you'll have only one production order and you can keep things simple.
    Cons:
    • If you need to dispach semi finished items, it will be imposible to do so, as you are not reporting them on your production order
      • for example, if you need to inform a transfer order for dispach the semi finished item form Reed Machining to Linetec for painting, you cannot do it because you will not have the semi finished reported.
    Here i leave you a youtube link for the setup needed for this option. 
    Subcontracting operations and activities in manufacturing
     
    is in Ax2012 but the same setup applies for D365.
     
    2- multiple production order with semi-finished items.
     
    • Create a BOM with the two semi - finished items:
      • Finished good
        • SF- Painted item
          • SF - Cut parts
            • RM 
            • vendor Service
          • Raw materials
          • Vendor service
        • Raw materials
        • Vendor service,
    • Create one route for each production with every vendor operation.
      • FG route
        • SF Cutted parts route
        • SF Painted item route.
     
    in this case you will have 3 production orders, one for each vendor operation. 
     
    Pros: 
    you will have the possibility to dispach order form one facility to another as they are items in stock
    Cons:
    Your operations will be segmented in three order. But you could benefit working with the pegged supply bom line to create automatically all three orders and have those items reserved for the next one.
     
     
     
     
  • John Fortino Profile Picture
    31 on at
    Hi Mariano,
     
    I used option 1 from your suggestion below as I was really trying to keep this as simple as possible.  It's not high volume or frequency and we have flattened BOM's, so didn't want to add any new part numbers/administrative tasks.  I was able to get it working on Friday so thank you for your feedback. 
     
    Here's my next question...  For the 3rd operation, we send material to the vendor REED to do the final assembly piece, which is the 3rd subcontract service.  We'd like for the material to be showing in the REED warehouse, so I created a warehouse for them.  I know that pick work is generated to move material needed for production from warehouse locations to production locations but was wondering.....  Can I get pick work generated to move material from one warehouse to another?  I know that this sounds more like your option 2 below but....  Worst case scenario is that I can just create a vendor location within the current warehouse but there are some CONS with doing that too. 
     
    Thanks,
    John
  • John Fortino Profile Picture
    31 on at
    All,
     
    So I have successfully created a route with (3) subcontract operations.  Operations 10 and 30 are performed by the same vendor (REED).  When the production order is firmed, 2 purchase orders are created as expected.  1 PO to REED for 2 lines (operations 10 and 30) and 1 PO to LINETEC (operation 20).  Here's the next problem that I can figure out how to get around.  When I do a product receipt for the PO to REED, my intent is to only receive line 1 of the PO (operation 10).  But I know that it will be easy for users to not pay attention and receive the entire PO at once.  In essence, operation 30 is allowed to be received before operation 20 has been completed.  I'm trying to find a parameter setting that prevents this.  I've looked in both the production control parameters and the production order defaults but haven't found a way to prevent it. 
     
    The only saving grace is that even after this happens, inventory is still not on hand but it paints an incorrect picture of the true progress of the production order status.
     
    Any help would be appreciated.
     
    Thanks,
    John

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