Purchasing and Subcontracting

Purpose

This page explains how BE-terna Manufacturing extends the purchasing area in Business Central with subcontracting processes. It covers the modeling of subcontracting through work center groups and routings, the creation of linked purchase orders, pricing for subcontracted operations, and the connection to transfer and receipt processes.

Business Value

• Makes the relationship between production order, subcontracting suggestion, purchase order, and purchase receipt transparent.
• Transfers item description fields into subcontracting purchase lines when needed.
• Supports subcontracting prices with quantity tiers, currencies, and validity periods.
• Connects purchase orders and transfer orders for component supply to the subcontractor.
• Enables the use of standard warehouse receipt and put-away processes for suitable return scenarios.

Area: Purchasing

Content Focus

The functions described here belong to the purchasing area in Business Central because they extend purchase orders, vendors, pricing, and transfer references for collaboration with subcontractors.

Control subcontracting through work center groups, routings, and worksheets

Subcontracting is modeled in Business Central through a Work Center Group with an assigned vendor. That work center group is used as an operation in the routing. After the production order is refreshed and released, you can calculate the subcontracting worksheet and create the related purchase order from it.

For users, the process is:

1. Create a work center group with the subcontractor vendor.
2. Maintain a routing with the subcontracting operation and assign it to the item.
3. Refresh and release the production order.
4. Calculate the subcontracting worksheet.
5. Use Carry Out Action Message to create the purchase order.

If this sequence does not work as expected, check first whether the subcontracting operation really points to a work center group with a vendor and whether the production order was refreshed before the subcontracting worksheet was calculated.

Open linked documents directly from the production order or purchase order

Once the subcontracting purchase order exists, users can open the related documents in both directions. The purchase order line provides direct access to the originating production order, and the released production order shows the linked purchase order or purchase receipt on the relevant line. This makes the current subcontracting status much easier to review than in the standard flow.

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Maintain descriptions and prices for subcontracting

If the related switch is enabled in Manufacturing Setup, Description and Description 2 from the item are transferred into subcontracting purchase lines. This improves the information sent to the subcontractor, especially where item-specific manufacturing instructions matter.

For pricing, you can maintain Subcontracting Prices by item, vendor, or work center group. Relevant fields include Vendor No., Work Center Group No., Item No., Minimum Quantity, Currency Code, Starting Date, and optionally Unit of Measure. During production order routing calculation, the system determines the best matching price and writes it into the current subcontracting routing line. The production order statistics then reflect these values as subcontracting costs.

Maintain a price list from the vendor card as follows:

1. Open the Vendor Card.
2. Choose Related > Purchasing > Subcontracting Prices.
3. Maintain at least Vendor No., Work Center Group No., Item No., Minimum Quantity, Direct Unit Cost, Currency Code, and Starting Date.
4. Use multiple lines with different minimum quantities if tier prices apply.
5. Recalculate the production order routing and verify the determined price in the subcontracting operation.

If no matching price is found, the system uses the price from the routing. The price table does not overwrite the item card cost calculation; it affects the current production order routing and the production order statistics.

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Coordinate purchase orders and transfers to the subcontractor

The Purchase Transfer Link Lines feature connects subcontractor purchase orders with their related transfer orders. A location for Components from Location must be defined in manufacturing setup so that component transport to the subcontractor can be generated consistently. If the automatic flag was not enabled when the purchase order was created, the link entries can still be added later through the update function.

This makes not only the purchase document transparent, but also the material supply that supports the subcontracted operation.

Build this connection in the following order:

1. Open Manufacturing Setup and maintain Components from Location.
2. Create the subcontracting purchase order through the subcontracting worksheet.
3. When carrying out the action message, activate Create Transfer Link Lines if the connection should be created immediately.
4. Review the page Purchase Transfer Link Lines.
5. If no connection entry was created initially, later use Update Purchase Transfer Link Lines.
6. Use Create Transfer Order to start the component shipment to the subcontractor.
7. Review in the planned transfer order whether the Purchase Order No. is carried correctly in the lines.

Use warehouse receipts for returned subcontracted work

If the subcontracting operation is the last operation in the routing, you can receive the returned work from the subcontractor through standard Warehouse Receipt, Put-away, or Inventory Put-away processes. If it is not the last operation, the receipt may still be posted, but the internal follow-up transport to the next operation is not supported by this functionality.

If backward-flushed components with routing link codes are involved, either use an abort-on-error setup for the warehouse posting or work with Logistics and pending consumption handling.

The note about the last operation is important from a business perspective: only then does the return flow remain fully inside the supported standard warehouse process.

Result

• You can create and review subcontracting orders from the production order through to the purchase order in a traceable way.
• You know how pricing, descriptions, and transport documents for subcontractors are maintained.
• You understand the conditions under which warehouse receipt and put-away can reliably support subcontracting returns.