Help! -> Sending a Part out for subcontract

Kinetic ERP
1

Hello all, I would like your insight and opinions on the options.

The Back Story

We have a customer that orders a specialty printed part. We produce the part, and send it out to a third party for printing. We then get that part back and ship it out to the customer.

What they are currently doing in Epicor.
They are taking an order, producing the part, and shipping the part to be printed.
They transfer the material to an outsource warehouse.

When it comes back, they are adjusting out the material, and producing it again under a “Labeling” job, under the same part #.

Obviously, this is not desirable, nor sustainable, as the qty of these orders is increasing, and it’s not a one-off anymore.

Options?

I see it as we have two options →

Option 1 →
Run all the material as one job, and have a subcontract as an operation on the job for printing.
Only problem is, I don’t know how this works, and what are the pitfalls or things we need to know with this.

Option 2 →
Consume the original part “A” in a job, and create a new part “B” that is shipped to the customer. (I would assume the customer would order “B”.)
Again, the same issues apply, I’m not sure how to track and make all this make sense.

Anyway, if y’all could give me some insight and examples of how you’ve dealt with these issues, I would be eternally grateful.

Season 12 Please GIF by PBS

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Option 1.

No pitfalls if you use the system. Create the Subcon op and ship using subcontract shipment. Receive it in and then close the job and ship.

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Agree with John, option 1

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Agree, option 1. Subcontract ops are just like regular ops, but they have a PO attached to them and only get marked as complete when the material is received.

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Subcontract ops would be my suggestion as well. The biggest issue we’ve had is getting the shop floor to remember to coordinate with purchasing on the PO BEFORE the parts are on the table to ship and UPS will be here any moment!

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Hi Kevin,

Yep, we do the job Subout here too. A couple of other things to be aware of…

The subout part number will be against the parent job part number. It’s a little weird, also timephase does not show the open PO for the subout against that Job num. So visibility is really only on open PO dashboards/reports/workbench.

Also we have problems sometimes with accounting doing the financial closing on a job because it looked done, shipped, etc. and what do you know, the subout was never received. Then the job needs to get reopened and for the receipt to get done and job financial closing again. This shows in our MRP runs as “orphan PO” in the mrp log.

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Same here. We do a ton of subcontract ops for multiple product lines. We had a division that came onto Epicor in 2023 and they actually had part numbers setup that were the Subcontract ops. That was a mess. Convinced them of the Subcontract op on the method with a purchase order as a better option and all is right in this world! :slight_smile:

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Sounds like a job for throw new Ice.BLException!

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Our process for sending parts out for finishing has a customization where when the shipper creates a shipment, it also creates the PO. That way we don’t need purchasing involved for every finishing PO.

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Does it create and approve the PO?

EDIT: I only ask because there are some shippers who I could definitely count on to put a zip code in the quantity field and send a PO for 60652 parts. You can validate that with a BPM, but my users will sneak around that validation somehow.

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Creates and approves the PO.

I see what your saying, but we have never had problems from our shippers. They are simply selecting the parts they want to send (they have a QR code they scan), then selecting the finishing supplier. Quantity and other important details would be coming from the job. It’s hard to screw up IMO.

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We use Option 2.

We attempted Option 1 but it wasn’t intuitive for our team. We wanted to complete our work on the part, then have another job (with Sub-contract operation and PO) to do the external finishing.

The external finishing is the last operation for us. We queue a number of completed jobs before sending a truckload to the sub-con. The parts also return to a different warehouse after finishing.

We change the part number by adding a suffix to indicate that the external operation has been completed. This allows us to easily identify if a part has been coated and maintains an intuitive link to the uncoated part.

This setup creates more jobs and part numbers than Option 1 but we found that it’s more easily understood by everyone. This increases the chances that we get correct transactions.

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Definitely have had this happen multiple times! Though most of that was during the first year or so with Epicor – I think most everyone is on the same page with it now - though I think there is still some confusion by some as to why the parts have to be “received” on the job AND the PO…

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We use option 1.
A challenge we deal with is lead time, The order by date on the subcontract PO suggestion is the day the op is scheduled to leave. It could be something that needs to be at the subcon vendor a total of 3 days, but since we can’t get an order by date 3 weeks ahead of time to get on the subcon vendors schedule we end up with a subcontract operation that is 3 weeks long, adding to the job’s overall lead time when we could take 2 weeks off of the job lead time if we could cut a PO in advance. ( I get this requires us sticking tight to our schedule, in these scenarios we have, but only with a lot of hands on interaction, Project Managers going to Purchasing and requesting POs while keeping close tabs on how production is progressing)
It would be so nice if we could get an order by date on subcontract operations based on a vendors lead time ahead of the time the subcon operation needs to be at the vendor. Maybe there is something out there and so far I have overlooked it.

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I will preface this with, we do not use MRP or Scheduling so I have no idea what impact this would be on those systems. However, we would have a part number in the system for the final customer printed part that is shipped to the customer and that is what is ordered on the sales order. A sales order linked job would be created that contains a material (the unprinted piece) and a subcon operation for the printing step. A second part number for the unprinted part would be created for Production with a full production job that is to make it as job material on the SO linked job. When production has completed the final step, instead of receiving it to inventory, Epicor receives it as job materials to the SO linked job. Then it is shipped from the SO linked job to the vendor for printing. Of course, the subcontract operation requires a PO to the vendor assuming they are charging you for it. When the subcontract is received on the PO, then the SO linked job is complete and can be shipped directly from the job to the customer. All the costs stay within the jobs and are captured for finance without anything accidentally being left in inventory.

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The only pitfall I have encountered with subcontract operations is traceability to where the WIP material is after it is received back in. As Julie has mentioned, individual part numbers do help traceability.

What have people done to keep track of the inventory or movements without new part numbers? If you have multiple outsource operations going at once, how do you clearly tie the WIP to each job?