This article outlines the key aspects of subcontracting and raw material supply in iVendNext, explaining how to set up subcontracting, manage raw material transfers, and track the progress of subcontracting activities.
Subcontracting is the process of outsourcing part of the production or manufacturing process to a third-party supplier.
In this process, your organization provides the raw materials to the subcontractor, who then uses these materials to produce the final product.
Cost Efficiency: Subcontracting can reduce production costs by leveraging the expertise and resources of third-party suppliers.
Flexibility: It allows businesses to scale production up or down without investing in additional infrastructure.
Focus on Core Activities: By outsourcing non-core activities, businesses can focus on their core competencies.
To enable subcontracting, go to Home > Buying > Purchase Order.
In the Purchase Order creation screen, enable the Supply Raw Materials option.
The Bill of Materials (BOM) defines the raw materials required to produce the final product.
Link the BOM to the Purchase Order to specify the raw materials that need to be supplied to the subcontractor.
Specify the Reserved Warehouse where the raw materials will be stored before being transferred to the subcontractor.
This ensures that the raw materials are reserved for the subcontracting process and not used for other purposes.
Once the Purchase Order is submitted, you can create Stock Entries to transfer the raw materials from the Reserved Warehouse to the subcontractor’s warehouse.
Go to Home > Stock > Stock Entry and select the Transfer option to initiate the transfer.
Use the Raw Materials Supplied table in the Purchase Order to track the quantity of raw materials supplied to the subcontractor.
The table shows the Required Quantity and the Supplied Quantity, ensuring that you can monitor the progress of the subcontracting process.
Once the subcontractor completes the production process, you can receive the finished goods by creating a Purchase Receipt.
Go to Home > Buying > Purchase Receipt and select the relevant Purchase Order to receive the finished goods.
The Supply Raw Materials option in the Purchase Order allows you to specify the raw materials that need to be supplied to the subcontractor.
This ensures that the subcontractor has the necessary materials to complete the production process.
The Reserved Warehouse feature ensures that the raw materials are reserved for the subcontracting process and not used for other purposes.
This helps in maintaining inventory accuracy and preventing stockouts.
The Raw Materials Supplied table in the Purchase Order provides a detailed view of the raw materials supplied to the subcontractor.
It shows the Required Quantity, Supplied Quantity, and Balance Quantity, ensuring that you can track the progress of the subcontracting process.
The integration with the Bill of Materials (BOM) ensures that the correct raw materials are supplied to the subcontractor.
This helps in maintaining production accuracy and reducing errors.
iVendNext supports multi-level subcontracting, where a subcontractor may further outsource part of the production process to another subcontractor.
This feature is particularly useful for complex manufacturing processes.
Use the Cost Tracking feature to monitor the costs associated with subcontracting, including raw material costs, labor costs, and overheads.
This helps in maintaining cost efficiency and profitability.
Implement Quality Control processes to ensure that the finished goods received from subcontractors meet the required quality standards.
Use the Quality Inspection module to conduct inspections and ensure compliance with quality standards.