Outside Processing: General Information
An organization may contract out to outside organizations (vendors or subcontractors) particular operations related to the production of items. Contract manufacturing is common in some industries, such as circuit boards, food and beverage, pharmaceuticals, nutraceuticals and cosmetics, aerospace, and defense. An organization might engage a subcontractor when the organization has insufficient production capacity or does not have the specific facilities to perform particular operations, such as plating or heat treating.
MYOB Acumatica Manufacturing Edition gives you the ability to track outside processing in the production process and account for the costs related to outside processing in the cost of produced items, as described in the following sections.
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
- Process production orders that contain outside operations
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
Outside Processing Operations
When you involve subcontractors in production of items, you add outside processing operations to the production routing (for details, see Outside Processing: Configuration). These operations require specific processing, which differs from processing of operations performed inside you organization. You may need to do any of the following for outside operations:
- If you store materials for the outside operation at your facility, you use vendor shipments to record shipping of the materials to the subcontractor. For details about storing materials in outside processing, see Outside Processing: Subcontractor's Storage of Materials.
- You usually use purchase orders for subcontractor's services. For more information, see Outside Processing: Charges for Subcontractor Services.