Subcontracted Part Operations

Many manufacturers outsource some of the operations performed on their manufactured parts to subcontractors. The operations that manufacturers subcontract to vendors may include painting, welding, sanding, assembly, or packing. OnRamp has a built-in process to help you track these outside operations.

The OnRamp subcontract process allows you to track:

  • The parts that need to be shipped and received

  • The ship by and due dates for the parts

  • The shipping documents for the parts

  • The account balance for the subcontractor

This is done by adding setup records for the outsourced operations that specify the operational data. With the setup done correctly, OnRamp processes the subcontract operation as a sub-component that is added of the finished part. This sub-component part also gets bills of lading and other shipping and receiving paperwork, while also creating the required accounts payable entries.

Subcontract Setup

Note: Settings not listed can be left as default unless a change is required for your data to be accurate.

In OnRamp, you must add the following information:

  1. To represent the part inventory location, you need to add an inventory location.

    • This is a tracking record that OnRamp uses to ensure there are no errors on the transaction records.

    • Settings:

      • Location: SC-TEMP

      • Description: Temporary SC Location

      • Type: Floor

      • Status: Okay

      • Nettable: Yes

  2. To represent the part processing, you need to add two work centers.

    • These records are used on the routing detail of the parent part (the part that the subcontractor will be processing) to represent the subcontractor as a work center and as a receiving work center.

    • The work center also helps track the time it takes for the subcontractor to receive, complete, and ship the part back to your shop.

    • Finally, OnRamp adds bar codes to printed work orders if it is a subcontract operation, which can be scanned to complete subcontract shipping forms in OnRamp.

    • Settings:

      • Work Center: SC1 and SC2

      • Description: Ship to Subcontract and Receive from Subcontract

      • WC Type: SHIP_SC and REC_SC

      • Report Type: S

      • Final Inspection: No

  3. One planner to track the subcontract operations

    • Settings:

      • Code: SC

      • Description: Subcontractor Planning

      • Person: SC

      • Auto Release: 0

For each part that requires shipping to a subcontractor for processing, you must add:

  1. A part for the subcontract operation, with the System Type set to Subcontract

    • Settings:

      • Number: (Parent Part Number)-SC-(Routing Operation Number). For example: 689-9632-SC-OP30

      • Description: (Subcontract Operation). For example: Subcontract painting of T-clip

      • Inventory tab > Default Location: SC-TEMP

      • Inventory tab > Point of Use Location: SC-TEMP

      • Planning tab > Planner: SC

      • Planning tab > System Type: S

      • Planning tab > Free Issue: REG

      • Planning tab > WO Release Code: R

  2. A vendor and a vendor part for the operation

    • .

  3. A blanket purchase order to track when the part is returning

    • Create a new purchase order for the vendor and add the part record to the Purchase Order Detail frame. When a work order is created that requires the subcontract operation, an item is automatically added to the Purchase Order Schedule, which is closed when the part is returned to your shop. Settings:

      • Deliver to: SC-TEMP

      • PO Type: B

  4. Two routing entries. One for the subcontract shipping and another for receiving. You might also want to add an inspection operation

    • Settings for the shipping operation:

      • Work Center: SC1

    • Settings for the receiving operation:

      • Operation: (The number after the shipping operation). For example, if the shipping operation is 20, this one is 30.

      • Work Center: SC2

      • S/C Part Number: (The part number entered in step 1). For example, 689-9632-SC-OP30

      • Subcontract PO: (The purchase order created in step 4).

      • Subcontract PO Line: (The PO detail line created in step 4).

  5. A BOM entry for the subcontract operation part

    • Enter the new part record as sub-component on the BOM of the parent part.

    • The BF at Operation field must be set as the receiving operation number from step 4.

  6. A cost roll-up to set the part's material cost.

Processing Subcontract Parts

With the setup performed correctly, when a part that has a subcontract operation is required, running MRP will create the work orders that include information for the part and add schedule items to the purchase order.

The subcontract parts are then:

  1. Shipped on screen Packing Subcontract Shipment [S1153] and Finalize Subcontract Shipment [S1666].

  2. Received with screen Receive Subcontract PO [S1911].

Processing Subcontractor Payments

With the process run as detailed above, the subcontractor vouchers can be processed via the OnRamp vendor voucher workflow. For more information, see Manage Vendor Invoice Vouchers.