Anyone have any good workarounds for subcontracting assembly without using manufacturing module? We need to send some components out and have them assembled then put the assembly into inventory. Obviously the best way is to set up for SFC orders and do it right but we are a distribution company and were looking for a shortcut.

You should create a purchase order, line 10 should be the first material issues towards the supplier with a negative quantity (so Baan treats this as a sls order line) line 20 the second and so on, while on the same purchase order you can register buying the product from the supplier after the supplier has done some subcontracting tasks on it. For the lines containing the issued material, the purchase price should be set to zero (watch out, since you will get a purchase result), while for the assembled product of course the price should be set to the price you have to pay the supplier.
Regards,
Marc

Dear Gary

I'm assuming that you'd own the materials you send to subcontractor (you're not selling them to subcontractor) and only pay the subcontracting costs when you receive the end product.

One weakness related to use of only purchase order is that the std cost of the end product wouldn't be captured well. This is because the end product is purchased at subcontracting cost only and this will be reflected in its std cost.

Another alternative would be to set up the materials as purchased items and end products as manufactured items. Then set up the appropriate BOM to reflect the material content of the end product. On top of that, apply surcharge to the end product equivalent to subcontracting costs. This way the std cost of materials as well as end product will be representative.
When sending material to subcontractor, in B5 use production (manual) warehousing order with type issue (use production issue if you're on B4). Then open a cost purchase order to procure the subcontracting costs. Upon receipt of end product from subcontractor, record it as (cost) purchase order receipt as well as production (manual) WO with type receipt in B5 (use production receipt in B4). This way all related financial transactions are captured well

Rgds,
Paul

Your assumption is correct, we do own the components we send to the subcontractor. Although some do supply additional material it is then included in the subcontract cost.
We had considered setting it up as a manufactured item with a bom and surcharge by item to get an accurate std cost then after doing a cost roll switching it to purchased so it would get planned correctly.
Unfortunately we cannot do the manual issueing and receiving you suggest as we have ILC implemented. I don't know if there is any way of avoiding the PPV when we purchase it, maybe we are just stuck with having to reclass it in finance afterwards.

Gary,

If you decide to try a PO approach, remember that in Maintain WIP & Inventory Transaction Accounts* the ledger account for a Purchase/Result can be defined for specific combination of warehouse, Item Group, Item, and/or Cost Price Component.

So you probably can find a way to avoid (or at least minimize) the need for the finance staff to manually reclassify PPV for these subcontracting orders.

Scott


* (I'm assumng you're on Baan IV. If on Baan V, it's Integration Mapping Scheme)

Dear Gary,
I realised the omission of detail as soon as I submitted the post. Yes, you can run manual inv trx with location control on. The session number is tdilc1120m000. You can restrict who can do what kind of manual inv trx by setting it up in tdinv1110m000. Sorry for the omission in the first place :).

Rgds,
Paul P

Dear Gary,
I think it'd probably be helpful if I put more explanation

- Manufactured items can be purchased without any problem, not only purchased items can be purchased.

- Std cost of purchased item is mostly set up to fluctuate with its average purchase price. Std cost of mfg item will automatically fluctuate with fluctuation of std cost of its materials

- Cost PO is a PO where the item being purchased is a cost item. A cost item doesn't have inventory. In PO, cost item represents buying good whose inventory isn't kept or buying a service.

- There are 6 types of manual inventory transactions in B4, production issue, production receipt, sales, purchase, transfer, and adjustment. Assuming, FTP (fixed transfer price) is the valuation method chosen, all these transactions occur with std cost at transaction time.

Hope this helps

Rgds,
Paul