Outside Processing Configuration: General Information

MYOB Acumatica Manufacturing Edition provides you with the ability to configure and use outside processing within the production process. This topic describes the configuration of the outside processing in the system.

For details on processing production orders with outside operations, see Outside Processing: General Information.

Learning Objectives

In this chapter, you will learn how to do the following:

  • Create a work center dedicated for outside processing
  • Create a bill of material that contains an operation outsourced to a subcontractor
  • Select the appropriate type of item (stock or non-stock) for recording the subcontractor charges
  • Select the appropriate way to store and deliver materials used in outside processing

Applicable Scenarios

You configure outside processing in the following cases:

  • When you are initially implementing MYOB Acumatica Manufacturing Edition and your organization contracts out some or all production operations
  • When your organization already uses MYOB Acumatica Manufacturing Edition and recently has started to contract out some or all production operations

Configuration of Outside Processing

To configure outside processing, you perform the following general steps:

  1. On the Numbering Sequences (CS201010) form, you create the numbering sequence for vendor shipments.
  2. On the Production Preferences (AM102000) form, you specify the numbering sequence in the Vendor Shipment Numbering Sequence box in the Numbering Settings section of the General tab.
  3. On the Vendors (AP303000) form, you create the needed vendors who will represent subcontractors.
  4. On the Overhead (AM202500) form, you create any needed records for additional costs to be applied to the outside operation. For details, see Configuring Production Cost Drivers: Implementation Activity.
  5. On the Work Centers (AM207000) form, you create at least one work center for each subcontractor who performs outside processing. The work center must have the Outside Process check box selected in the Summary area. For more information, see the Work Centers for Outside Processing section below.
  6. On the Stock Items (IN202500) or Non-Stock Items (IN202000) form, you create the needed stock items or non-stock items that you will use to pay the subcontractor for their services. For details, see Outside Processing Configuration: Charges for Subcontractor Services.
  7. On the Bill of Material (AM208000) form, you create the needed bills of material that you will use for production orders with outside processing operations. For more information, see the Bills of Material with Outside Operations section below.
  8. On the Warehouses (IN204000) form, you create the warehouses or warehouse locations to be involved in outside processing if any materials for the outside operations will be stored by the subcontractor and if you would like to track the availability and movement of the materials. For more information, see Outside Processing Configuration: Material Storage and Delivery.

Work Centers for Outside Processing

When you create a work center for subcontractors, you specify the settings on the Work Centers (AM207000) form as follows:

  • In the Summary area, you select the Outside Process check box.
  • In the Standard Cost box, you type 0. With this setting, the system will not add labor costs when a production manager records the completion of the outside operation.
  • We recommend that you select the Backflush Materials check box. Because the work is performed outside your organization, recording issued materials may not be feasible; the subcontractor should complete the work as planned.
  • On the Shifts tab, you specify the following settings for the automatically added shift:
    • Crew Size: 0
    • Efficiency: 1
    • Calendar: Your standard calendar

    You leave the default values for the other settings.

  • On the Overhead tab, you specify any additional costs to be applied to the outside processing.

For details on creating work centers, see Configuring Work Centers: Implementation Activity.

Bills of Material with Outside Operations

If you are tracking outside operations within the production process, we recommend that you create production orders that include outside operations. You need to create bills of material on which the production orders will be based. If you produce an item either by using subcontractor services or by involving the production facilities of your organization, you can create two bills of material for the same item: one with the outside operation and one without it. For more information about creating bills of material, see Bills of Material: Implementation Activity.

To add an outside operation to the bill of material (which must be on hold), you do the following on the Bill of Material (AM208000) form:

  1. In the Operations table, you add a row for the outside operation.
  2. In the Work Center column, you select a work center for which the Outside Process check box is selected on the Work Centers (AM207000) form.
  3. You specify the time for the operation as follows:
    • If the time required for the outside operation is fixed, you specify the time in the Queue Time column.
    • If the time varies, you specify the run time and the run units in the corresponding columns.
  4. On the Materials tab, you add rows for the materials as follows, depending on the nature of the materials:
    • Materials you will ship to the subcontractor: You specify the Subcontract material type and Ship to Vendor subcontract source.
    • Subcontractor charges you will pay by using purchase orders: You specify the Subcontract material type and Purchase subcontract source.
    • Materials that the subcontractor will purchase on its own (optional): You specify the Subcontract material type and Vendor Supplied subcontract source. The system does not include the cost of these materials in the cost of the produced item. You can add rows for these materials for informational purposes.
  5. On the Outside Process tab, you make sure that the Outside Process check box is selected and specify the subcontractor in the Vendor box.