Correct Sub-Contract Workflow

Epicor ERP 10
1

I’m looking into setting up sub-contract operations for a few situations where we’ve been “cheating” by adding finished versions of raw parts along side the raw parts on BOMs. Tribal knowledge tells us that in those cases, we can’t look at inventory of the raw versions to establish what we have on hand.

I’ve setup a test in our Pilot environment. We have a tank that is made up of about 11 raw materials that we send to a weld shop. I created the tank as a manufactured part and structured a method to it. I gave it 1 sub-contract operation and named a supplier and specified the Days Out. I pointed all the materials to this operation.

I then created demand for the tank by setting a forecast for it. I ran MRP and I was expecting to see some kind of purchasing suggestion that we needed to do something… like create a PO for the sub-contract operation. Where do I look for the “action” that’s required? An unfirm job was created and I see the demand on the required tank parts in Time Phase. But it just looks like regular job materials. What tells a buyer to issue a PO and then what tells someone to ship the parts there? Does the job need to be firmed? Released? I feel like I’m missing something obvious.

2

PO Suggestions is split between Materials and Subcontract. Go to New PO Suggestions to see it.

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3

Boom! There it is. Thanks!!

4

It just doesn’t show me anything special in Time Phase…

5

What “special” stuff are you looking for?

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6

Well, I guess I thought it would have an suggestion in there like a Purchased Part might. It just looks like any other job might. Which is fine. I’m just feeling my way through this.

7

When does the job material get backflushed? It seems as if I must have missed a step because the job did not consume the materials. Maybe that’s what @LarsonSolutions was getting at by adding in a separate operation to backflush from. Actually, I think I saw somewhere that it needed to be manually issued. I’ll try it both ways and report back.

8

Hi Dan,

You don’t see sub contract in timephase as you’re buying an OP not material. We are still new to sub contract but I think the options are:

  1. Manually issue the material that’s been sent out to the sub contract op (if you value knowing that material is out for processing for some time)
  2. Look into some sort of backflush op. Can’t remember if you can nest ops with sub contract. You would need to run the backflush process

When receiving receive the subcontract PO it automatically marks the subcontract op complete and produces the QTY of material the subcontract OP made.

You can also issue a miscellaneous shipment for step 1 above but as it’s misc. shipment no inventory transaction is applied (which is why you need to consider step 1). It just shows in job tracker for reference.

Couple of other pointers here:

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9

You cannot backflush material on a subcontract operation. That is how Epicor is designed and there is no way around it (except for creating a backflush operation or something similar).

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10

yep, I meant backflush OP via OP sequence i.e. having a bunch of OPs where one is subcontract but also others where they are set as backflush. I haven’t setup in LIVE yet so not sure if this would work.

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11

I’ll be testing this today and I’ll let you know how it goes. Thanks @Matt_Belshaw and @jkane for the helpful comments.

12

I was able to create an operation that happened before the subcontract op where I backflushed my material. I like this method because it updates our on hand quantities to reflect the parts we’re shipping to the weld shop and will serve to alert someone that an action is needed (i.e. packaging a skid of parts and delivering to the dock). I also found that I did not get a Purchase Suggestion for the subcontract operation until after I firmed the job. So we need to take that into consideration I suppose. The good news is that it backed up the due date of the job based on the subcontract days out so as long as we set that correctly, the job should show due sooner and will allow us to plan for it accordingly.

13

Sorry for replying to an old post, but I am trying to understand how the buyer is alerted that the previous operation is completed. We see the purchase suggestion before the previous operations have been completed, so we wouldn’t want the buyer to create the PO until the material is ready to be shipped to the subcontractor.
Thank you

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14

The suggestions will be generated as soon as the job is firmed. I understand your desire to not see the suggestion for the subcontract PO until it is time to send it out. But on the other hand, some subcontract ops may require quotes from vendors, etc. Time to send them drawings, have them evaluated and negotiate pricing prior to creating the PO. So, in many cases, its good to see subcontract op suggestions pop up early. The person(s) managing those have time to shop around for vendors, if necessary.

I see your point, though. I guess part of the role of managing the subcontract ops is paying attention to the suggestions vs jobs. Depending on your job structure, scheduling, and company practices, that person can use the OrderBy and DueDates to sort and make determinations on when to pull the trigger on processing the suggestions.

In cases where we know the vendor/operation well, our team uses the job travelers and know when a subcontract op is next, they move the parts to the shipping department, the subcontract op manager has visual confirmation the parts are ready, they’ll then create the PO and ship them out.

In other cases, we have some subcontract operations that are performed in batches (heat treating, for example). So the parts from various jobs get moved to a location in our shop and once there is enough there to fill a furnace load, we’ll process those corresponding PO’s all at once to get the best cost.

We also have many methods where an inspection op is placed prior to a subcontract op because we need to know the state of the parts prior to them leaving. Again, manual company practices, but our subcontract person keeps tabs on what’s in inspection and knows the next step is to send them out, so he’ll then process those suggestions.

If you DO need an alert on jobs prior to a subcontract op, I would think a BPM could be created to send out an email or something. But that would certainly be a customized piece.

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15

Thank you for the information.
I agree that sometimes we may want to get quotes ahead of time, but for us, the majority of time, we do not require a quote.
We do have a Quality step on the methods, that happens before the parts are shipped, so maybe we can add a UD field to the PO Suggestions to show if that Quality Operation has been marked complete.
Thanks again, Colleen

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