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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Subcontracting Order
Small and medium business | Business Central, N...
Suggested answer

Subcontracting Order

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Posted on by Shivani Kumari 20

Dear All,

I have created a released production order and in the routing we define first operation is a subcontracting operation and second and third are inhouse operation and in the BOM we have raw material item. we create subcontracting using released production order when we send the subcontracting then quantity goes to the RM location to Subcontracting location but when we receive material we have negative quantity from subcontracting location but not positive in any location . how can i get material to sfg location from subcontractor?

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  • Suggested answer
    AbhinavMehra Profile Picture
    AbhinavMehra 364 on at
    RE: Subcontracting Order

    Hi,

    you have to follow this steps to receive material from a subcontractor and update the SFG location

    1. Create a purchase order for the subcontracting item from the subcontractor. Use the released production order as a reference to create the purchase order.

    2. Receive the subcontracted item in the Subcontracting location. This will increase the inventory of the subcontracted item in the Subcontracting location.

    3. Create a production order for the finished goods that you want to produce. In the production order, use the subcontracted item as a component.

    4. When you finish the production order and the finished goods are ready, post the output. This will reduce the inventory of the subcontracted item in the Subcontracting location and increase the inventory of the finished goods in the Finished Goods location.

    5. Finally, you need to transfer the finished goods from the Finished Goods location to the SFG location. To do this, create a transfer order from the Finished Goods location to the SFG location and post it. This will reduce the inventory of the finished goods in the Finished Goods location and increase the inventory of the finished goods in the SFG location.

    By following these steps, you should be able to receive material from a subcontractor and update the inventory in the SFG location in Business Central.

  • Suggested answer
    Ben Baxter Profile Picture
    Ben Baxter 6,396 Super User 2025 Season 2 on at
    RE: Subcontracting Order

    If I am understanding your question correctly, you are asking how your subcontract operation can create a material that can be consumed during your in-house operations.  This requires two (2) Production Orders (or Lines).

    Separating out the Sub-Contract process onto its own Production Order.  This allows you to purchase Raw Material to (or transfer to) the Sub-Contractor Location (if needed), and the Output of the Sub-Contract Production Order can land in your SFG Location (or transferred from sub-location).

    The second Production Order is for your internal processes.  It will consume the Output of the first Production Order as raw material in the production of your true Finished Good.

    If you want to keep everything on one Production Order, set both Output Items to a Manufacturing Policy of "Make-to-Order" and it will nest the Sub-Contract production as a second line on the Finished Good's Production Order.

    Your BC Partner should be able to provide you with training on this setup within the Manufacturing module.

  • Shivani Kumari Profile Picture
    Shivani Kumari 20 on at
    RE: Subcontracting Order

    I have only two item code Raw material (I0004352) this raw material has been purchased in 1-RM location and finished item code (I0000147) so which item code is used for creating first released production order (subcontracting order).

  • Ben Baxter Profile Picture
    Ben Baxter 6,396 Super User 2025 Season 2 on at
    RE: Subcontracting Order

    In the simplest scenario described above there are three Items:

    1.) Raw Material consumed by the Sub-Contractor on Sub-Contractor Production Order

    2.) Product produced by Sub-Contractor and consumed by internal Production Order

    3.) Finished Good produced by internal Production Order

  • Shivani Kumari Profile Picture
    Shivani Kumari 20 on at
    RE: Subcontracting Order

    Actually i want to say that how can i create Released production order of row material. because when i create Bom of row material item (I0004352) .Capture10.JPG

    It gives error.....

    The maximum number of BOM levels, 50, was exceeded. The process stopped at item number , BOM header number I0004352, BOM level 1.

  • Suggested answer
    Ben Baxter Profile Picture
    Ben Baxter 6,396 Super User 2025 Season 2 on at
    RE: Subcontracting Order

    That message happens when you have created a loop.  From the screenshot it looks like your Finished Good is listed as the Raw Material, which is not feasible.  You need to create a new Item for the sub-component created by the sub-contractor.  Your RAW Material would be listed in the BOM for that new Item.

    I would encourage you to request a meeting with your Business Central partner.  They can assist you with the setup required to accomplish your process.

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