Outsourcing Manufacturing

Introduction to Outsourcing a Manufacturing Routing Task

The following section describes the scenario for using outsourced manufacturing routing tasks in opentaps and introduces the way these tasks are purchased. Following this introduction, a step by step example is provided.

Individual manufacturing tasks, or "routing tasks," are sometimes outsourced to a third party vendor instead of being performed in-house. opentaps allows you to set up an assembly (routing) process mixing as many in-house and outsourced tasks as you need.

Setting Up the Outsourced Task -- All that is required to outsource a task is to create a service type Product (in the Catalog) to represent the task you are outsourcing, and then associate this routing task (service) product with a supplier you have configured for the outsourcing.

This configuration is accomplished with the Outsource a Task Screen, which writes the product, outsourcing, purchasing, and work effort information into your Catalog > Product section database entries. When modifications are needed they can be edited in the Product > Suppliers Tab or the Work Efforts Tab.

To discontinue this outsourcing of the routing task, you can go to the Work Efforts Tab of the Product and expire the relationship listed there for "Product for purchasing outsourced manufacturing task."

Using the Task in a Production Run -- To use an outsourced routing task, a production run which includes the task (and potentially other tasks as well) is created in the usual way. As a result of creating the production run, requirements for each outsourced task are automatically created for you in the Purchasing application, where they appear as requirements for the service type Products that represent your outsourced routing tasks.

Purchasing the Outsourced Task -- Next, when the production run is "Confirmed", the outsourced tasks will be in a state called "PO Pending," and the generated requirements are automatically set to "Approved" status. You can now create purchase orders from these generated requirements, and send them to your suppliers of the outsourced tasks.

When your PO(s) are set to "Approved", the tasks which have been outsourced to vendors will show a status of "Outsourced." ( Note: You will not be able to modify a "PO Pending" or "Outsourced" production task: they will be handled automatically by the system, but you can cancel the production run.)

Receiving Outsourced Tasks -- When you receive an outsourced task back from the vendor, you will use the Warehouse > Manufacturing >> [ Receive Outsourced PO ] screen to receive the PO. When all the quantity of a PO item has been received, the line item on the PO will be marked "completed," and the corresponding task will be marked "Completed."

At this point, you can continue with the remaining mix of the routing tasks in the production run. The PO will be marked "completed" when all its items are completed. If you don't want to serialize in-house routing tasks with some outsourced routing tasks due to scheduling for example, you can configure separate production runs that will produce the outsourced tasks. You can receive the resulting outsourced task inventory and then consume it in the in-house production runs to avoid scheduling or other issues.

Finishing the Production Run -- When all the tasks of a production run, including outsourced and in-house tasks, are completed, then you can move the stock of the finished goods to inventory, just as with any production runs.

When the outsourced tasks are received, a vendor invoice will be created and viewable in the Financials module. This invoice will be at the standard purchase prices from the vendor. You can edit the invoice and modify the prices or add additional charges such as shipping, then use [Mark as Ready] to make it official and post it to the ledger.

Step by Step Outsourcing a Manufacturing Routing Task

to be continued. . .