Companies can decide to involve a subcontractor and subcontract part of their activities. The subcontractor carries out the work and returns the products to your company.
In Infor LN, subcontracting is considered as purchasing labor from a third party. Therefore, if a manufacturer wants to subcontract work, he must generate a purchase order to start the subcontracting process. These are the types of subcontracting:
- Subcontracting with material flow
- Operation subcontracting: For operation subcontracting, a part of the production process (one or more operations) is subcontracted.
- Item subcontracting: For item subcontracting, an item's entire production process is subcontracted. Therefore, it is always used with material flow support.
- Subcontracting without material flow: The simplest form of subcontracting is to generate a subcontracting purchase order to record the operations outsourced to a subcontractor. The subcontracting purchase order only represents the administrative handling of the subcontracting process. When the subcontracted item is received back from the subcontractor, you must close the subcontracting purchase order, which initiates the production process.
- Unplanned subcontracting: Unplanned subcontracting is applicable when you subcontract after generating a production order. For unplanned subcontracting, a purchase order is generated from the production order and the material supply lines are populated by Shop Floor Control.
- Service subcontracting: For service subcontracting, work on an item to be maintained or repaired is subcontracted. This work entails the entire repair process, or only a part of it. Service subcontracting can be used with or without material flow support.
To start the subcontracting process, a purchase order is required.