This process combines the function of production management, requirements generation, and purchasing to handle production runs that contain outsourced routing tasks. Therefore, it is best to master the basics of each of these sections before pursuing this one. Refer to the following User Manual topics for reference on the basics:
- "Using Fulfillment Processing Power"
- "Using Production Processing Power"
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
Before You Begin When you need to outsource some production tasks to a vendor, but you want to keep your production process integration and control in force, opentaps provides the specialized outsourcing support described here. This makes use of the functions of Requirements, Purchasing, and Production with special provisions for outsourcing tasks. Several things must be in place first, before using this function, therefore it might be called an advanced function. In this step by step example, we outsource one routing task, but there can be several such tasks in a production run.
Before you start using this function, keep these points in mind:
- Your Supplier -- Before you can order the outsourced tasks (services) from a vendor you must identify the supplier to use, and collect a set of supplier information items to use in the ordering. If this supplier is not created on opentaps yet, you will need to be create the Supplier by running Purchasing > Suppliers Tab > [Create Supplier].
- The Routing Task -- The task you need to outsource, which is a "routing task" used in your production run, needs to be defined as a separate Routing Task and included in the Routings used in the Production Run. Refer to the User Manual section "Using Production Management Processing Power" for a discussion of creating Routing Tasks, etc.
- The Outsourcing Setup -- Before you can outsource a task you must define your outsourced task and sourcing using the Purchasing > Suppliers Tab > [Outsource a Task] function to accomplish the definitions needed in opentaps for this processing.
- The Requirement for Production -- Before you can create a production run you need to have an approved Requirement in place in the Purchasing > Planning > [Approved . . . Requirements]. For information about Requirements and how these are created refer to the User Manual section "Using Fulfillment Processing Power" > Procurement Process > Requirements.
The following steps outsource a production routing task while keeping the opentaps process controls for production in force:
* Create your outsourcing Supplier using Purchasing > Suppliers Tab > [Create Supplier]. * Create your outsourced task as a separate Routing Task using Purchasing > Manufacturing Tab > [New Routing Task] and include the task in your production Routings as needed. Refer to the User Manual section "Using Production Management Processing Power".
Outsource a Task
* Use the Purchasing > Suppliers Tab > [Outsource a Task] to define the outsourced task, the supplier, and related information. Refer to the screen Reference Manual page Outsource a Task Screen and run this function, entering this information: ** Supplier ID for the outsourcing supplier you will use ** Routing Task ID = ID of the routing task you will outsource in this step ** ProductId, internal name, supplier product id, supplier product name = using descriptive terms that will help you understand this data when you see it later. * Price = unit price for this outsourced service (task) from the supplier.
Create a Production Run
* Create a production run for the actual product that uses your outsourced routing task. Use Warehouse > Manufacturing Tab > Create Production Run as usual. In this screen, make sure to use the productID for the actual product you make (not the productID for your outsourced task) and use the routing ID (for the actual product) which contains the outsourced routing-task. For information about the structure of Production Runs, Routings, and Routing Tasks refer to the User Manual section "Using Production Processing Power". The View Production Run opens. * Note: If you look in Purchasing > Planning > Open Requirements at this point you will see a new requirement for the outsourced task, which will be listed by the Product ID and name you gave to the routing task when you set up the outsourcing for it. * On the open View Production Screen, Click: [Confirm] The outsourced routing task will now display a status of "PO Pending" and an [Issue] button. (If you do not have all the necessary materials inventory for this production run you may see the [Force Issue] button instead.) Note: The display of the requirement for your outsourced task is now "Approved" and is now listed on the Purchasing > Planning > [Approved Product Requirements] * Click: [Issue] on the View Production Run screen.
Approve the Outsourcing PO
* Go to Purchasing > Planning Tab, Click: [Approved Product Requirements] The Approved Requirements Screen opens, and displays a line item entry for your outsourcing supplier that includes your outsourced task requirement. Make sure the warehouse displayed in the Facility column is the one for your production run. If not change the selection. * If you need to consolidate requirements on this line item to produce one order with all of the quantity, then Check the Consolidate Requirements box. * To review an order to this Supplier Click: [Review Order], when ready Click: [Create], or To create the order directly, Click: [Order All] The View Purchase Order screen opens and includes your outsourced task listed by the Product ID and the Name you created to represent your outsourced Routing Task. * In the "Order # . . . Information box, title bar, Click the drop down list and Select "Approve Order". (You will need this Order ID number in the next step.)
Now the outsourced routing task is actually "Outsourced", which is displayed on the View Production Run screen. The production run can proceed with other routing tasks, until the outsourced item is required.
Receive the Outsourced Routing-Task Deliverable
When the outsourced routing task deliverable is ready to receive, proceed as follows:
* Click: Warehouse > Manufacturing Tab > [Receive Outsourced PO] The Receive Outsourced PO screen opens. * Enter the Purchase Order ID and Click [Find Order]. For each outsourced task on the order, Mark the Quantity completed (received). Click: [Receive]. Note: This marks the outsourced task, which is a service, completed for the quantity received, but it does not imply any physical transfer or change in inventory. (Physical movements are handled using other features of Production Management.)
The system produces a Vendor Invoice in Financials for the standard cost of the outsourced service provided by your Supplier in this completed process. You can find the invoice and edit it or add items like shipping to cover movement of materials, or work in process.
Meanwhile the Production Run can continue to completion as usual. When it is completed you can move the actual product it produces from work in process to inventory.
This concludes the process for outsourced Routing Tasks used in product production.
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