How to manage outsourcing task with 2BizBox? Part One: 6 Situations

Many companies outsource various tasks to reduce cost or make up for technical deficiencies, so as to focus on their core business. Generally, outsourcing is divided into six situations:

1. The outsourcing factory takes raw materials and creates finished products.

2. The outsourcing factory takes raw materials and creates semi-finished products.

3. The outsourcing factory takes semi-finished products and creates finished products.

4. The outsourcing factory takes semi-finished products and creates semi-finished products.

5. The outsourcing factory prepares raw materials and creates semi-finished products.

6. The outsourcing factory prepares raw materials and creates finished products.

How many situations have your company come across? Do you always feel puzzled to manage these complicated situations? No extra functions, now 2BizBox provide you very simple solutions.

Obviously situation 6 can be treated as a normal purchasing progress. So we will see how to manage situation 1 to 5 one by one in 2BizBox.

Tips:

Before you start, make sure you understand two things in 2BizBox.

1. What does NA mean?

2. Do you understand relationships between “Reference Documents”?

If not, we recommend you to read following articles first.

Ingenious Use of “NA” in 2BizBox?

Reference Document and ItsApplication in 2BizBox

Situation One: The outsourcing factory takes raw materials and creates finished products.

Just consider this situation as: we make work orders, we issue raw materials to outsourcing factories and we receive finished products into warehouse. The only thing different from a normal work order is: instead of the manufacturing process, we have to pay the outsourcing fee. In order to show the fee in this work order, we should relate a purchase order with item NA as the processing fee, and receive NA to the work order. In this way, the processing fee will be automatically calculated in the cost of this work order.

Here is the work flow chart:

Please find detail steps in 2BizBox at: 

How to manage outsourcing task with 2BizBox? Part Two

Situation Two: The outsourcing factory takes raw materials and creates semi-finished products.

Similar to Situation One, outsourcing semi-finished products need to create WO and PO with NA as outsourcing fee. However, after the outsourcing factory finishes their job, we should receive the PO only, because these semi-finished products are still in the work sequence. Warehouse will receive the WO till all sequences finished.

Flow chart as follow:

Situation Three: The outsourcing factory takes semi-finished products and creates finished products.

Regarding the outsourcing task as one working process in the work order, we create a normal work order for the target product and set up manufacturing. When the semi-finished product is completed, create a purchase order with item NA as outsourcing fee and relate it with WO. Prepare a “transfer processing order” and send the semi-finished product to the outsourcing factory. After the outsourcing factory returns the finished-product and passes quality examination, receive the NA purchase order first and then receive the work order.

Flow chart as follow:

Situation Four: The outsourcing factory takes semi-finished products and creates semi-finished products.

If you have the patience to read, you might have found that solutions are very similar to each other as long as you understand NA and reference documents very well. Still, we create a normal work order for the target product and set up manufacturing. When the semi-finished product is completed, create a purchase order with item NA as outsourcing fee and relate it with WO. Send the semi-finished product to the outsourcing factory. After the outsourcing factory returns the finished-product and passes quality examination, receive the NA purchase order first and then transfer the semi-finished product to the next working process. Warehouse will receive the WO till all the working processes are finished.

Situation Five: The outsourcing factory prepares raw materials and creates semi-finished products.

Create a work order and approve it as we usually do, but remember that do not set up manufacturing. Then create the purchase order, relate it to WO and receive the semi-finished product (NA) from outsourcing factory to WO. After that, set up the work order and transfer the semi-finished product to the next working process. Finally let the warehouse receive the work order.

Flow chart as follow: