Working with subcontracting work centers

Many manufacturers rely on the subcontracting functionality in Dynamics 365 Business Central, which involves setting up a work center as a subcontracting work center. Generally, two primary use cases can be distinguished:

1. Subcontractor as a standard operation
Some manufacturers outsource specific production steps due to a lack of in-house machinery. In this scenario, the subcontractor is defined as a work center within the routing and represents a regular step in the production process.

2. Subcontractor as a way to handle bottlenecks
Other manufacturers typically carry out all operations internally. However, in cases of capacity overload, they may temporarily outsource a specific operation to a subcontractor. In this case, the standard routing remains on their own machines, but individual operations can be manually reassigned to subcontractors as needed.

How the VAPS supports subcontractors

Given the importance of subcontracting in manufacturing, the VAPS supports visualizing and managing subcontractors in the following ways:

• Subcontract work centers are treated as work centers with infinite capacity, since the actual capacity and availability of subcontractors are generally unknown.

• Subcontract work centers can be included in alternate routing sets, although the current VAPS scheduling logic primarily focuses on machine centers.

Assigning Operations to Subcontractor Work Centers

Once you have set up a subcontractor work center in Dynamics 365 Business Central, you can assign operations to it just as you would with any regular work center. However, please note that there is no Standby machine center for subcontractor work centers. Operations must be directly assigned to the subcontractor work center when needed.

You can define a default color for subcontractor work centers to distinguish them visually on the planning board. This can be configured in the Color Setup of the VAPS.

Handling Subcontractor Production Orders Linked to Purchase Orders

In many cases, a purchase order is used to represent the subcontracted part of a production order, essentially serving as the communication channel with the subcontractor or vendor.

When such a link exists, the due date of the subcontractor production order is used for EMAD (Earliest Material Availability Date) calculation. This is due to the following considerations:

• The linked purchase order often does not carry a quantity, which makes it unsuitable for EMAD-based calculations.

• There is no reservation or tracking relationship between the purchase order and the production order, so relying on the production order’s due date ensures consistent and reliable planning.

This approach helps maintain scheduling accuracy when working with subcontracted operations and ensures that planning decisions remain data-driven, even without full integration between production and purchasing data.