Multi-Site Subcontracting In Dynamics AX

Subcontracting with Dynamics AXSub contracting or outside processing for a manufacturing company may combine many components into multiple steps; some of these steps will occur within one or more in-house manufacturing facilities and other steps will be completed outside by one or more vendors.  This type of work can result in complexities regarding the tracking of components, and estimated completion dates.  In a multi-site environment because sites can have many warehouses an additional complexity arises in the determination of the correct internal warehouse for picking, tracking and receiving.

Dynamics AX has functionality to support sub-contracting processes and tools to provide tracking visibility.  A sub-contracting overview screen (Production > Common Forms > Subcontractor Work Details) provides a method of quick review and easy update against the state achieved for Production Orders, and Purchase Orders as they relate to outside manufacturing processes.

To support mult-site subcontracting Dynamics AX uses the following functions:

  • Production Orders
  • Items
  • Bills of Materials – Bom, Bom versions, Bom lines.
  • Routes – operations, work center, production unit
  • Route relations – between routes and bills of material
  • Purchase Orders – packing slip
  • Master planning

Production orders are the controlling arm of the sub-contracting process  all of the various functions are combined on the order.   A production order will automatically create purchase orders for vendor services, and the production order will automatically update as a result of the completion of the vendor services.  A production order bill of material containing a service item, where the line type is set to “Vendor” causes the system to automatically create a purchase order for that items primary vendor.  The purchase order is automatically created when the production order status is updated at least to “estimated”.  These service items are used on purchase orders to represent the service that the vendor will do as part of the outside process.  It will contain cost and will result in an accounts payable billing.  When the vendor completes the work and the  Purchase order is “packing slip” updated,  then an automatic posting of consumption will take place on the Production Order for both “Picking lists” and “route cards”.  When the Production order state is updated to “report as finished” the finished item is received into inventory.

Several items are required for the subcontracting process.   One item will represent the finished good and it will have an item type of “BOM”.   Each outside service which will be performed by vendors will be represented by an item having an item type of “Service”.  The “service” item must have a default vendor setup on the reference tab of the item master so that the system can automatically create purchase orders for that item.   Company owned components will have an item type of “item”.  All items must have lead times setup on the item setup button.

Bills of materials are setup to determine the components needed to produce the finished good.   When creating bills of materials it is possible to create one bill of material that can be used by many sites within the company to make the same item.  This flexibility is desirable and reduces the number of Bill of material records and their maintenance.  Because only one bill of material is used by many sites and each site contains different warehouses the BOM line cannot designate the correct warehouse.  Instead “work order consumption” is used.  The BOM line contains a check box called “work order consumption” when this box is checked the system will use the routes work center to determine the correct warehouse rather than the warehouse found on the BOM line.  Each BOM line for “service items” will have the BOM line type set to “vendor”.  Each BOM line representing an internal component item that will be worked on by an internal function or an external vendor will have a Bom line type of “item”.  A BOM version record is required for each site that will be producing the item.

Routes are site specific and can contain multiple steps.  Each step represents an operation and will contain a warehouse where that operation will occur.  A route step can be created for each internal facility and each outside vendor in the process.  These steps and warehouses are used to track where and when component assets are moved between facilities, and vendors.  The warehouse is attached to the route step by selecting a “work center”.  The “production unit” attached to the work center will contain the warehouse designation.

Routes relations are setup to designate to the system which component items are required at which route step.  Each route step by way of its work center is associated with a specific warehouse so the system can determine where to pick and consume the items.  Vendor warehouses are used to hold the inventory which is held outside under the control of the vendor.  The route relation will point the system to the vendor warehouse to pick any required components.   Master planning will create transfer orders and will ensure that the items arrive at both vendor and internal warehouses at the correct time.  The bill of Material and route relationship is best illustrated, by reviewing the “BOM designer”.  The Bom designer is found off of the item master (inventory management > item details > BOM button > select designer).  In this screen the user can relate the components on the bill of material to the operation steps on the route.  The required site is selected on the setup tab and then the user can drag and drop each component from the bill to the route step where it will be needed.  Components that are sub-BOMs can also be dragged and dropped.  Sub-BOM components require an additional step in that the Parent item must be “route Locked” before the relationship can be created.   The system needs this to determine for which route to create the relationship. The user can lock the parent’s route by right clicking on it and selecting lock route.  The system will form the relationship with the route which is specific to the site selected on the setup tab.

Using the various Dynamics AX functions complex multi-site, multi vendor process can be orchestrated.   Required components can be transferred to an outside vendor warehouse for specific operations and the items be consumed to work in process while there, when that operation is complete and packing slip updated the required services will automatically begin at the next operation perhaps representing vendor two.   Products may move on to additional vendors or may return to internal facilities as controlled by the warehouse on the route step.  Each route step can function sequentially or maybe set to perform simultaneously with the next route step.



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