Selecting Subcontracted Operations for Purchase Order Creation

When part or all of the manufacturing process is done at an outside supplier, you need to generate purchase orders for production IDs with subcontracted operations. Use purchase orders to authorize a supplier to add labor or material or both to a partially completed end item.

Using the Select Subcontract Prdn for PO page in PeopleSoft Manufacturing, you select one or more production IDs, production areas, or item IDs for which to generate purchase orders for subcontracted operations. When you run the Select Subcontract Prdn for PO process (SFS5000), the system automatically transfers the subcontracted operations information for purchase order creation to PeopleSoft Purchasing, including production ID and subcontracted information (supplier name and manufactured item or subcontracted item) for which the outside processing must be done as well as the operation sequence associated with the outside operation. Once the subcontracted purchase order is generated, it is processed like any regular purchase order within PeopleSoft Purchasing.

To create purchase orders for subcontracted operations, verify that:

  • The production ID has a status of Released or In Process.

  • An operation list exists for the production ID.

    Manually create an operation list if the production ID is for rework, you didn't specify a routing, or you choose not to copy the routing to the production ID.

Completing Operations and Scrap for Production Using Count Points

If you're using count points, then all subcontracted operations must be defined as count point.

Page Name

Definition Name

Usage

Select Subcontract Production Page

RUN_SFS5000

Select production that requires purchase orders for subcontracted operations.

Subcontracted Purchase Order Report Page

RUN_SFS2008

View the status of purchase orders that you've requested for subcontracted production.

Subcontract Components Report Page

RUN_SFS5001

Displays the production IDs and the components associated with subcontracted operations.

Use the Select Subcontract Production page (RUN_SFS5000) to select production that requires purchase orders for subcontracted operations.

Navigation:

Production Control > Process Production > Subcontract Production > Subcontract Prdn for PO > Select Subcontract Production

Field or Control

Description

Selection Criteria

Select the options indicating the production to generate purchase orders for subcontracted operations. Options are:

  • Start Date

  • Prdn ID (production ID)

  • Prdn Area (production area)

  • Item ID

Run

Click to run this request. Process Scheduler runs the Select Subcontract PO for Prdn process (SFS5000) at user-defined intervals.

Extract to PO only when prior Op Seq is complete

Select this check box to ensure that the subcontract purchase order is created only after the prior operations are complete, thereby eliminating change orders.

Once you run the Select Subcontract Prdn for PO process, the purchase orders for the subcontracted services can be generated.

To generate, approve, and dispatch the subcontracted purchase order:

  1. Run the PO Stage Load process (PO_POSTAGE).

    This process is run with the PO Stage Load page (Purchasing > Purchase Orders > Stage/Source Requests). This process takes all the requests generated from requisitions, PeopleSoft Supply Planning, and PeopleSoft Manufacturing, and stages them for the actual purchase order creation.

  2. Run the PO Calculations process (PO_POCALC).

    This process is run with the PO Calculations - Run Controls page (Purchasing > Purchase Orders > Stage/Source Requests).This is an Application Engine process that does most of the processing to create a purchase order.

  3. Run the Create Purchase Orders process (PO_POCREATE).

    This process is run with the Create PO page (Purchasing > Purchase Orders > Stage/Source Requests). This is an Application Engine process that generates the purchase orders that will be staged for approval and dispatching.

    If a recommended supplier was listed on the subcontracted task or operation, the purchase order is created with the supplier specified. If the supplier field was left blank on the routing or operation list for the production ID, the suggested supplier, as defined in PeopleSoft Purchasing, is selected.

    The system-generated purchase order for the subcontracted service contains this data:

    • Business unit and production ID associated with the production.

    • Task description if a task code is associated with the subcontracted operation. Otherwise, the end item description is used, along with the prefix of SERVICE.

    • If the subcontracted item ID is associated to the subcontracted operation: the subcontracted item ID and its description are used

    • Quantity and unit of measure.

    • Operation sequence associated with the subcontracted operation.

    • Purchase order due date based on the due date of the subcontracted operation.

    • Purchase order unit price based on the cost defined for the subcontracted operation if the subcontracted item ID is not associated to the subcontracted operation. Otherwise, the purchase order unit price is based on the subcontracted item's unit price from the valid contract or from the purchasing item and supplier relationship.

  4. Once you've created the purchase orders, you must approve and dispatch them before you can send the purchase order to the supplier.

    Use the Amount Approval, ChartField Approval, and Dispatch POs components to approve and dispatch the purchase orders for the subcontracted operations.