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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Production Sub-contract
Microsoft Dynamics AX (Archived)

Production Sub-contract

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Posted on by Ahmed Elroghay 330

Hi all,

I have item Bom that produced by vendor (the vendor receiving the row material then produced the item then return it )
  - I create item Bom
  - create production with type vendor
 what can i do then?and what can i do with planned production order for this item ?

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  • Ahmed Elroghay Profile Picture
    Ahmed Elroghay 330 on at
    RE: Production Sub-contract

    Thanks Guy

  • Guy Terry Profile Picture
    Guy Terry 28,866 Moderator on at
    RE: Production Sub-contract

    [quote]
    AX user who purchase the raw material

    [/quote]

    Purchase the raw materials in to a warehouse of the AX user as usual.
    [quote]
    then send it to sub-contractor
    [/quote]
    Create a new warehouse in AX to represent your sub-contractor (you can use a different warehouse for each sub-contractor, or one for all 'sub-contract' activities).
    When the raw material is sent to the sub-contractor, use a Transfer order (or Transfer journal) to move the inventory that was sent to this new Warehouse in AX.
    [quote]
    sub-contractor to produce it
    [/quote]
    Create a production order on the sub-contractor warehouse to produce the item(s) from the raw materials you sent. You will Report as Finished into the sub-contractor warehouse and consume raw materials from the sub-contract warehouse. Probably your sub-contract items will have specific BOM/Formula versions for this purpose.
    [quote]
    then sub-contractor send the finished good to the ax user
    [/quote]
    In AX, use a Transfer order or Transfer journal to move the produced item(s) to a warehouse of the AX user.
    Normally, you need to capture a cost for the sub-contract service in the cost of the produced item. If you add a line for a service item of type Vendor to the BOM/Formula, AX will create a Purchase order for this service item. The cost of this purchase order will be added to the cost of the production order, and the cost of the produced item will be appropriately higher.
  • Ahmed Elroghay Profile Picture
    Ahmed Elroghay 330 on at
    RE: Production Sub-contract

    Hi Guy,

    AX user who purchase the row material then send it to sub-contractor to produce it then sub-contractor send the finished good to the ax user

  • ColbyGallagher Profile Picture
    ColbyGallagher 3,666 on at
    RE: Production Sub-contract

    If your not using R3 / warehouse management enabled items, Guy is correct, Tim's blog is the place to start.  If you don't have a route, you should create a dummy one to get the automation at product receipt.  

    If you are using R3 / warehouse management enabled items, there are additional considerations.  

  • Guy Terry Profile Picture
    Guy Terry 28,866 Moderator on at
    RE: Production Sub-contract

    Who purchases the raw materials? The vendor to whom the production is sub-contracted or the AX user?

    If the AX user, do they have the materials delivered directly to the sub-contract vendor, or ship them to the sub-contract vendor from their own warehouse?

    Does the vendor make a charge for producing the items (i.e. will the vendor send in an Invoice with 'Charge for producing items' on it)?

  • Ahmed Elroghay Profile Picture
    Ahmed Elroghay 330 on at
    RE: Production Sub-contract

    Hi Guy,

    The finished product have bom not route and note that the finished product produced by vendor not bom line

  • Guy Terry Profile Picture
    Guy Terry 28,866 Moderator on at
    RE: Production Sub-contract

    Hi,

    Try following this blog post

    timsaxblog.wordpress.com/.../subcontract-purchase-order-receipt-with-route-card-posting

    Vendor production orders are much like normal production orders, except they often take place at a warehouse that represents a vendor. The BOM Line Type of 'Vendor' is just used to create a Purchase order, which is for whatever your vendor is charging you for making the item.

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