Sales order to MRP, production and subcontracting, end to end

One customer order followed from the sales order line to delivery: the production version its attributes choose, the planner’s make, buy or subcontract decision, make-to-order stock, a subcontracting purchase order with the components to provide, providing them to the vendor, the subcontract receipt that consumes them, the vendor’s reconciliation, and Trace & cost with its exceptions.

A part sold to a customer is often made in two places: machined in house, then coated by a vendor who is given the machined parts and sends back the coated item. TRANXACT plans and records that whole chain from the sales order. This guide follows one order through it, in the order the work happens, and says who does each step.

Before the first order: items, bills and production versions

• Supply Chain › Master Data › Items & Suppliers › Items: an item’s procurement type is make, buy, both or subcontract. Subcontract means a vendor makes it from the components on its bill of material, which the company provides.
• The item’s planning method make_to_order plans it only from stock and supply for the sales order it is made for; that stock is the order’s and is not offered to any other order.
• Manufacturing › Design › Engineering › Production Versions (new): which bill of material, routing and fulfilment (make, buy or subcontract) an item is made with, and the vendor who buys out or subcontracts it on that version. Attribute conditions say which order lines the version is for, for example {"coating": "<zinc-nickel>"}; empty means any line. Priority breaks a tie (lower wins), Default is the version used when no conditions match, and Valid from / Valid to limit it in time.

1. The sales order line

1. Open CRM › Order to Cash › Selling › Sales Orders and add the line as usual.
2. In Attributes, record what the customer chose, for example coating=<zinc-nickel>; thickness=<12um>.
3. Leave Production version empty: the attributes choose it. Pick one only to overrule them; the list offers the versions of the item being sold.
4. Confirm the order. Its next-step bar then says: Run MRP to see what the order is short of, decide make, buy or subcontract, and firm what has to be raised for it.

2. Run MRP and the planner’s fulfilment decision

Run MRP on the sales order (CRM), or open the order on Supply Chain › Planning › Supply Planning › Material Requirements Planning. Each component line now shows its Fulfilment and the production version chosen; a make-to-order item says “make to order”.

• Fulfilment is a choice per order and item for whoever holds Change on Sales Order MRP (CRM) or Material Requirements Planning (Supply Chain): As set (the item’s or version’s own setting), Make in house, Buy out, or Subcontract (components provided). MRP runs again at once so the lines show the effect, and the line says the decision was the planner’s.
• Make: a planned production order. Buy out: a purchase requisition. Subcontract: a subcontracting requisition, with “At the vendor: op …” beside a step done outside.
• The components a subcontracted item needs are demand too: MRP nets them like any other requirement, so what has to be provided to the vendor is planned and bought in time.
• On Material Requirements Planning the key figures add To subcontract, and Raise subcontract requisition raises one subcontracting requisition for every item of the order that is made outside. Firm suggestions in CRM raises it with the production orders and the purchase requisition.

3. The subcontracting purchase order and its components to provide

1. The buyer turns the subcontracting requisition into a purchase order as for any requisition (Supply Chain › Purchasing › Requisitions & Orders). The order’s lines name the item the vendor makes, at the vendor’s charge.
2. When the order is raised, what the vendor is to be given is written from the item’s bill — the production version the order line chose, else the item’s own bill — one line per component.
3. On Purchase Orders, Components to provide shows, for that order, what the vendor is given and what they used: required, provided, consumed by the receipts, returned, spoiled and still at the vendor. Material at the vendor opens the same components on Material at Subcontractors.

4. Provide the components to the vendor

1. The warehouse opens Supply Chain › Purchasing › Procurement Control › Material at Subcontractors and chooses Issue to subcontractor on the component’s row.
2. Quantity going out: leave it empty to send the quantity required. From bin: where it is taken from; empty takes the bin holding the most of it. Expected back is optional.
3. The stock moves off the shelf into stock at the subcontractor. It is still the company’s and still valued, but it is no longer free for MRP or for a delivery.
4. What comes back unused is recorded with Receive (Returned unused) and moves back to the shelf; what the vendor spoils is written off.

5. The subcontract receipt

• Receive the finished item on the purchase order as for any receipt.
• The receipt consumes the components at the vendor: the quantity received times each component’s quantity per unit. It is refused when the vendor holds less than that, and the message names what is missing.
• The item received is valued at the vendor’s charge plus the value of the components consumed.
• Only the vendor’s charge is accrued to GR/IR, and the supplier invoice clears it as for any purchase. The components’ value moves from the component to the finished item inside the inventory account, so the ledger needs no second entry.
• A service line for an operation done outside on a production order no longer goes into stock; it is charged to the order’s work in progress.

6. Reconciliation with the vendor

Components to provide on the purchase order is the vendor’s account: for every component, required, provided, consumed, returned, scrapped and still there, beside what the receipts say should have been consumed. A component whose consumption does not match the receipts is shown as not reconciled, so a shortage at the vendor is found before the next order, not at stock-take.

7. Trace & cost

Trace & cost follows the order from demand to delivery. It is a tab beside Requirements on Material Requirements Planning, and a button on the CRM Run MRP panel (Hide trace closes it). It is read-only: the buttons that act are on the documents’ own screens.

• Key figures: Exceptions, Production orders, Subcontracting orders, Cost so far and Margin.
• Exceptions, worst first: Shortage, Delayed procurement, Insufficient stock at the vendor, Delivery-date risk and Operation planned twice — each with its severity and what to do. “No exceptions: nothing is short, late or at risk.” when there are none.
• Demand to supply: the order line, then every item of its structure with how it is met (Make in house, Buy out, Subcontract), its version, make to order or make to stock, what is short, and every document raised for it — planned order, requisition or subcontract requisition, purchase or subcontract PO, goods receipt, production order, provided to vendor, delivery.
• Costs for the order — raw material consumed, machining (setup, labour, machine, overhead), subcontracting (vendor charges), freight, inspection and other services, rework and scrap — against revenue ordered and invoiced; then by production order and by subcontracting order (charge ordered and received, components consumed, still at vendor, vendor scrap).
• An item made for the order by one of its own production orders is counted once, in that order’s costs, and not again as the material of the next step.

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