62 lines
3.3 KiB
Markdown
62 lines
3.3 KiB
Markdown
# Subcontracting
|
||
|
||
Subcontracting is a type of job contract that seeks to outsource certain types
|
||
of work to other companies. It allows work on more than one phase of the
|
||
project to be done at once, often leading to a quicker completion.
|
||
Subcontracting is practiced by various industries. For example, manufacturers
|
||
making a number of products from complex components subcontract certain
|
||
components and package them at their facilities.
|
||
|
||
If your business involves outsourcing certain processes to a third party
|
||
Supplier, where you buy the raw material from, you can track this by using the
|
||
sub-contracting feature of ERPNext.
|
||
|
||
### Setup Sub-Contracting:
|
||
|
||
1. Create separate Items for the unprocessed and the processed product. For example if you supply unpainted X to your Supplier and the Supplier returns you X, you can create two Items: “X-unpainted” and “X”.
|
||
2. Create a Warehouse for your Supplier so that you can keep track of Items supplied. (you may supply a months worth of Items in one go).
|
||
3. For the processed Item, in the Item master, set “Is Sub Contracted Item” to “Yes”.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract.png">
|
||
|
||
|
||
__Step 1:__ Make a Bill of Materials for the processed Item, with the unprocessed
|
||
Items as sub-items. For example, If you are manufacturing a pen, the processed
|
||
pen will be named under Bill of Materials(BOM), whereas, the refill, knob, and
|
||
other items which go into the making of pen, will be categorized as sub-items.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract2.png">
|
||
|
||
__Step 2:__ Make a Purchase Order for the processed Item. When you “Save”, in the “Raw Materials Supplied”, all your un-processed Items will be updated based on your Bill of Materials. You can also select the warehouse from which the material would be reserved for sub contracting.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract3.png">
|
||
|
||
Once the PO is submitted, you can view the reserved quantity of the item from the item dashboard as well.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract3-reserved-material.png">
|
||
|
||
__Step 3:__ Make a Stock Entry to deliver the raw material Items to your Supplier.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract4.png">
|
||
|
||
__Step 4:__ Receive the Items from your Supplier via Purchase Receipt. Make sure to check the “Consumed Quantity” in the “Raw Materials” table so that the
|
||
correct stock is maintained at the Supplier’s end.
|
||
|
||
<img class="screenshot" alt="Sub-Contracting" src="{{docs_base_url}}/assets/img/manufacturing/subcontract5.png">
|
||
|
||
> Note 1: Make sure that the “Rate” of processed Item is the processing rate
|
||
(excluding the raw material rate).
|
||
|
||
> Note 2: ERPNext will automatically add the raw material rate for your
|
||
valuation purpose when you receive the finished Item in your stock.
|
||
|
||
> Note 3: ERPNext will automatically default the Reserve Warehouse in the PO
|
||
from the BOM. If not found in the BOM, it would default it from the default
|
||
warehouse setup in the Item.
|
||
|
||
### Video Help
|
||
|
||
<iframe width="660" height="371" src="https://www.youtube.com/embed/ThiMCC2DtKo" frameborder="0" allowfullscreen></iframe>
|
||
|
||
{next}
|