Outsourced Manufacturing
The release of NetSuite 2020.1 Outsourced Manufacturing enables you to purchase outsourced assembly production from vendors. This helps you better manage your subcontracted manufacturing processes. This upgrade enables NetSuite to automatically consume (use items or products) production components and then transfer them to a specified location. Outsourced manufacturing automatically synchronizes NetSuite procurement and production transactions. NetSuite 2020.1 enables you to outsource your manufacturing efforts either from a purchase order or from a work order. transactions (lowering quantities or charges) to keep them synchronized.
- After receiving an outsourced item on a purchase order, NetSuite builds assemblies for the outsourced work order. The system uses components from your stock to contract manufacturers.
- Receive assemblies at any location within a subsidiary. The system automatically transfers finished products to the designated location.
- NetSuite can handle serialized or lot–numbered assemblies and components.
- The cost of the production charge is the actual charge. Each production run uses the charge on the purchase order.
- Outsourced Manufacturing is compatible with NetSuite Supply Planning and Distribution Network.
Purchase Order
The new Standard Outsourced Purchase Order custom form enables you to create a purchase order for outsourced assemblies that contains specific attributes for outsourced production. For example, you can define the following outsourcing details:
- Assemblies
- Outsourcing Location
- Production Start Date
- Production End Date
- Bill of Materials
- Bill of Materials Revision The outsourcing form also displays the new Create WO column. When you check the Create WO box on an order line and then save the order, the system automatically creates a work order for this line and purchase order.
Change
After you save a purchase order, the Create WO column displays a link to the new work order. However, if you did not check the Create WO box, a Create WO link appears in the Create WO column. Click this link to prompt the system to create a work order for this order line. After you save a purchase order, a Receive button appears in the purchase order. Click this button to open the Item Receipt window where you can receive production items from the purchase order.
Work Orders
Generally, if you use supply planning and create outsourced items from work orders, you can enter
outsourcing-related information in the work order Outsourcing subtab. Similar to the Create WO box on outsourced purchase orders, the outsourced work order displays a Create PO link to create related purchase order. If the purchase order is not created automatically, NetSuite creates outsourced purchase orders for Firmed Work Orders for vendors and subsidiaries.
Manufacturing Locations
To improve inventory tracking, the Manufacturing Locations field appears in the Vendor window, Outsourced Manufacturing subtab. Click the double arrow icon to assign one or more physical locations to the vendor.
Bill of Materials
Create a Bill of Materials to capture final assembly costs that include outsourced production charges.
For example, your organization outsources bicycle manufacturing. However, you provide seats and
wheels from stock to the outsourced vendor. A single seat is priced at $20 while two wheels cost $70. The vendor provides the other components, assembly location, and assembly labor. The vendor outsourcing charge is $350.
Combine the inventory outsourcing charges, 20 + 70 + 350, for a total assembly cost of $440. Standard
Non-Inventory/Service/Other Charge items outsourcing charge item costs are taken from the related purchase order.
Item Receipt
The Item Receipt Items subtab displays a link to the assembly column. You can also select a different destination location within the same subsidiary. The production location is selected by default . If this location changes, the Inventory Transfer transaction moves inventory from the production location to the destination location. You can also click the link to open the Assembly Build Helper. Save the assembly build helper to display a link to the created assembly build and automatically create a transfer order.
Assembly Build Helper
The new Assembly Build Helper enables you to override existing production data, such as component quantity, lot and serial numbers, or bin–related information.
Change
For example, you provide 20 bicycle seats for a production run. During assembly your vendor broke five
seats. As a result, you need to provide an additional five seats from your inventory. Use the Assembly
Build Helper to update the original number of seats you provided from 20 to the correct figure of 25. This
means you do not have to edit the related assembly build transaction after it is created.
Actual Production Dates
In NetSuite 2020.1, Actual Production Dates are automatically calculated by default for related work order transactions. Actual production dates are available in Assembly Builds for Standard Work Orders, Issue Components, and Work Order Completions for WIP Work Orders. This functionality is automatically available when you upgrade to 2020.1. This new feature enables you to track actual production dates to better assess your production plans, identify problems, optimize production runs, and make data–driven decisions.
NetSuite calculates production after the first build transaction starts. If you are using WIP, the calculation
starts when components are issued. The system end date records when the work order is closed. The end date must occur on the same day or some time after the start date. You cannot record an end date until you entered a start date. For example, you start to a red mountain bike assembly build. You create a work order on January 16, 2020. The system records this as the production start and end dates. The work order instructions calls for 10 bicycles be built. Two bicycles were built on January 16, 2020. This is recorded as the Actual Start Date. You already eight bicycles in inventory that were built on January 10. This is the assembly transaction date. After you update the assembly build, NetSuite automatically adjusts the work order Actual Start Date to January 10. The Actual End Date is recorded as January 16. NetSuite automation logic always uses the transaction dates. In this example, the system uses the assembly builds for the non-WIP work order dates. If you prefer to control actual production dates manually, and do not want NetSuite to calculate actual production dates, you can disable this feature. However, you need to enter actual production dates manually on each work order.