Understanding Subcontracting Using PeopleSoft Manufacturing

In the shop floor environment, you may need to send components or end items to outside suppliers for end item processing, rework, inspection, or testing. PeopleSoft Manufacturing enables you to track production progress and outside processing supplier costs associated with subcontracting using production IDs.

Although managing production with subcontracted operations is similar to managing production for in-house production, there are some differences:

• Once production has been released or started, you select production IDs with subcontracted operations and send the information to PeopleSoft Purchasing where purchase orders are created.

  You record operation completions for both in-house and, once the end items are received back from the supplier, subcontracted operations. Once the end items are complete at the final operation, they can be sent to stock or routed to another production area. If the completed end items are lot- or serial-controlled, you assign lot and serial numbers.

• You determine how much lead time you need to generate and process a purchase order for the subcontracted operation.

  Using PeopleSoft Manufacturing, you can also optionally define a subcontracted item that is a non-inventory item that represents the outside processing services. When defining this subcontracted item you can specify the purchasing attributes for this item. You can then associate this subcontracted item to the subcontracted operation. The subcontracted purchase order will then be created with this subcontracted item. You can also define a purchasing contract, such as a blanket order, for the subcontracted item to utilize the PeopleSoft Purchasing contract functionality.

  If you are using electronic data collection or enable the subcontract streamline option for purchasing receipts, the system automatically generates the subcontracted completions transactions.

  Note:

  You cannot perform a production ID split if you have run the Select Subcontract Prdn for PO process.