Subcontracting in Odoo 14 Manufacturing

It is likely that not every manufacturing company is interested in producing every single item needed for the industry. Instead, they can outsource some of the work and concentrate more on assembling the particles purchased from the outsourced companies. These practices are called sub-contracting. Even though the term sub-contracting sounds simple, when it comes to fact, it is not so. If the process is done manually, it requires a number of procedures. However, it can be done easily with the help of an ERP solution when it comes to outsourcing. 

Odoo provides the full solution for subcontracting problems with a dedicated manufacturing module. This can be used in steps that are simple. 

You must first install Odoo Manufacturing to make use of Odoo's sub-contracting functionality.

Odoo manufacturing will allow the business to handle the inventory of raw materials at the place of the subcontractor, it will also help to shop raw materials for the subcontractors, taking the forecast into account. You may also make use of the ERP to keep track of all manufacturing activities carried out at the sub-site. contractor's It will allow you to monitor the output of incoming items. It also helps you to track the bills of subcontractors. 

Now let us take a glance at the sub-contracting configuration in Odoo. 

Go through Manufacturing> Configuration> Settings 

Here, under which there is a subcontracting option, you can find the operations tab. Enable this box to make use of the function for subcontracting.

Subcontracting in Odoo 14 Manufacturing

So now, let's go to Manufacturing -> Products -> Material Bill, and at the Bill of Materials, we can find subcontracting enabled.

You can now allow the subcontract option and pick subcontractors from the list of subcontractors.

By inserting new lines under the components tab, a user may list the raw materials or components for the subcontractors. The user should correctly record the components for the costing process to be completed. 

There, the user may also be able to add the product details, including the appropriate quantity of the product. This helps to identify the exact number of items you want from the subcontractor.

You must prepare a purchase order in order to buy the products back from the subcontractor. Install the Purchase App for this and then create a Purchase Order for the vendor who has been listed in the BoM as the subcontractor.

Complete all purchasing procedures for a product and then confirm the purchase order

It is possible to bill the number of products delivered. It can be obtained several times if the products are not purchased together. 

Odoo lets the user automatically perform all tasks involved in subcontracting. It also promotes your operations, if you also want manual operations. 

Valuation of Inventory 

The price of the product is determined on the basis of the price of the raw materials when you are sub-contracting a product.

It is possible to bill the number of products delivered. It can be obtained several times if the products are not purchased together. 

Odoo lets the user automatically perform all tasks involved in subcontracting. It also promotes your operations, if you also want manual operations. 

Valuation of Inventory 

The price of the product is determined on the basis of the price of the raw materials when you are sub-contracting a product. There are two elements that we can call A and B in this situation. The price of the finished product will be the price of the service fee imposed by the subcontractor for the A + price of B +. If all the components are supplied to the subcontractor by your company, the overall cost of the product will be prepared solely on the basis of the service fee. In the event that any of the components are directly sourced by the subcontractor, the price of these products will be applied to the service charge to determine the price of the product. 

Traceability 

By using a serial or lot number when processing the receipt, traceability may be guaranteed. This will allow the product to be traced. For tracing and auditing purposes, the serial number may be used. 

Automate Subcontractor Replenishment 

If you want to boost your subcontractor's resupply management, you can enable Inventory Multi-locations. Go to the Inventory >Configuration> location for this. 

Here, you can track the position of the subcontractor.

With this function, to ensure supply, the user can submit components to the location of the subcontractor. 

Replenishment from the warehouse or store   

The user is able to quickly resupply a subcontractor with components. Create delivery orders for this reason and pick the subcontractor's address as the delivery address.

With Odoo, we can automate replenishment proposals from subcontractors. It is possible to do this in two separate ways. 

1. Using Rules on Reordering 

2. Replenish on the flow of order. 

Here, on the subcontracting site or location, you can specify a reordering rule. You have to set a minimum and maximum level of inventory for this. The reordering rule is activated when a delivery order is generated to do this. 

The demand for the finished product is taken into account in order to replenish the subcontractor when you use the Pull flow.

Replenishment from another supplier

The user may explicitly ask the vendor to provide the product to the subcontractor if the manufacturer purchases components from other vendors to supply the products to the subcontractor. Enable the Drop Shipping feature in the Purchase module to do this.

Now, while purchasing, you can pick the Dropship option. Also, give the subcontractor's address for shipping.

Quality Control

The quality of the products manufactured by the sub-contractor using the Odoo Quality App can also be tested. A quality check is usually carried out at the manufacturing level. But in this situation, since the manufacturing is performed by an outside company when the product is received, the check can be done. 

Next, install a quality App and build a control point for the subcontracted product reception.

Conclusion:

Often the business can benefit substantially from manufacturing subcontracting opportunities, so it is important that ERP works perfectly and as automatically as possible. A strong basis for getting the business to run smoothly is the basic module. Here, what will describe it as being a successful or great option is the chance to customize it. To enjoy the best results, let us help with your customization of Odoo manufacturing features. That's where you can think about getting in touch with the ERPCloud where we will help and support you throughout the process of subcontracting via Odoo ERP. This is how Odoo allows for effective subcontracting management, for more information just drop us a message at sales@erpxcloudllc.com.