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[Lisa Ng]

Hi All,
I need to order the materials; then send those materials to a manufacturer A to produce a product A.   After finished, the manufacturer A sends the product A back to me.  Then I send the product A to another manufacturer B to make the product B.  Then I receive product B.  How do I tract the total cost of the production?  I’m assuming I would create:
1.  an Item for a material.  
2.  an item for Subtract A
3.  an item for Subcontract B

Step process:
When the customer placed an order, I would think I need to create a production order:  Estimate->Release->Start.  At the point of “Start” the production, will I see the inventory or materials to move out of my book? (reduce inventory).  How do I move the materials to the manufacturer A?  I don’t think I just simply write a journal entry; because I can’t track my item that way.  Can I?  Will the materials sit in my production when I don’t produce the product? 
When I hire a manufacturer A to make the product A, I would think I need to place a PO.  When I receive the finished product A from the manufacturer A, then I “Receipt” it.  At this point, I go to the production, and click on “Report as finished”, correct?  

Could someone please shed some lights to this process?  Thanks so much!

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Lisa Ng
Business Analyst
HOUSTON TX
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[Jonathan Anderson]

Lisa,

The version of AX that you’re on, along with whether you are using routes or not will have an impact on the answer to this question.  So can you please let me know what version you’re on and if you’re using routes?

Thanks,

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Jonathan Anderson
Managing Consultant
BKD Technologies
Denver CO
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[Lisa Ng]

Hi Jonathan,
Thank you for your response. 
The version is D365.  I would think I need a route.  A route contains the set of operations that are required to produce a product or an item.  Is there a situation that the route is not required in production?    
Thanks

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Lisa Ng
Business Analyst
HOUSTON TX
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[Jonathan Anderson]

Lisa,
Yes there are some production companies that use AX that don’t want to go through the process of maintaining routes, resources and calendars.  They utilize the inventory lead time on the item for master planning purposes and then apply an overhead cost through the costing sheet to account for the manufacturing costs of the parts.

Since you’re using route, what I would suggest you do is create the following parts:

1.  an Item for a material
2.  an item for Subtract A part
3.  an item for Subcontract A service
4.  an item for Subcontract B part
5.  an item for Subcontract B service

Subcontracting requires the material being used and the service provided in the BOM.  The service is tied to the vendor record and the subcontract route operation, and creates a purchase order for the service automatically when estimating the order.  Then when the service PO is received that route operation is completed by the system.  

The youtube video below (while short) goes through the process of subcontracting in AX.

Microsoft Dynamics AX 2012 Production – Sub Contractor Work Overview

Thanks,

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Jonathan Anderson
Managing Consultant
BKD Technologies
Denver CO
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