" Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increase productivity and job creation."
- Larry Elder
Subcontracting job work is an integral activity of manufacturing industry. An array of processes and operations are performed to manufacture a finished product. Of these, certain processes may be very specialized which may not be feasible for a manufacturing company to carry them out in-house or may be required occasionally. That is where subcontracting comes in picture. Sub contractors are those third parties who have expertise and infrastructure to carry out these special processes allowing the manufacturing company to focus on its own core expertise and customer service.
At the same time it becomes equally important to coordinate, track and check the quality of ongoing work with the sub contractors and also track material lying with the third-party. Subcontracting Module of IMMS manages all such third party transactions by maintaining Gate Passes while issuing material, raising indents with or without Work Orders and receiving processed material while taking care of required quality checks. It takes care of sub contracting for both, 'made for order' and 'made for stock' kind of items. In case of 'made for order', child items belonging to a Sales Job Order against an ongoing Work Order are sent from the shop floor for in-house processing and the processed items are received back in shop floor. Whereas in case of 'made for stock' items are sent out to the sub contractors from their respective warehouses to carry out certain operations. Processed material is received back in the warehouse.
For this purpose Sub-Contracting Module integrates tightly with Engineering, Purchase, Stores, Quality Control and Finance modules of IMMS.
Salient Features of Sub Contracting Module
- Making of Gate Pass for items to be sent out for sub contracting works
- Allows making two types of Gate Pass
- Details include expected Duration of processing, Time when the material leaves the warehouse and whether the gate pass is for excisable items or not. Also records other details such as sub-contractor's CST number and ST number, Mode of dispatch and Vehicle Number.
- Option to include items against Work Order. Child items required to make the parent item belonging to a particular Sales Job Order can be selected from a list of Work Orders in progress. Child items are processed by the sub contractor to make the finished item specified in the Work Order. Accepts the quantity of each item sent.
- Option to include items sans Work Order to sub-contract for 'made for stock' items.
- Short Closure of existing Gate Pass. Items belonging to the entered Gate Pass are displayed to be short closed. Short Closed quantity of the particular item is sent back to its respective warehouse.
- Cancellation of existing Gate Pass. Items belonging to the selected Gate Pass are returned back to their respective warehouses.
- Return of existing Gate Passes made for a particular sub-contractor. Returned quantity of particular item belonging to the Gate Pass is sent back to its respective warehouse.
- Option to raise Indent for items with or without Work Order. Accepts the quantity.
- In case of Indents without Work Order, accepts only 'Make Item' and 'Assembly Item' type of items. Picks up Operation to be performed on the item from the Process Sheet of the specified item made in Engineering Module. Also checks whether the specified item already has Product Structure defined and Process Sheet ready.
- Checks that Indent Quantity should not be more than the Work Order Quantity or available stock-in-hand.
- Picks up Drawing Number of the specified item from Engineering Module for reference.
- Accepts only those Vendors for which Labor Rate Contract has been made through Purchase Module.
- Authorization and hard copy of the Indent. Once an Indent is authorized, changes can not be made to it.
- Option to Cancel authorized Indent.
- Option to Short Close authorized Indent.
- Maintains material received from sub contractor into warehouses through Goods Receipt Note. GRN can be made against the following
- Product Structure base (without Work Order)
- Work Order base
- Rework - Product Structure base
- Rework - Work Order base
- Checks whether the Gate Pass is already made for the selected vendor.
- Existing authorized Indents made for the combination of Vendor and Warehouse available to enter the GRN quantity.
- Accepts the finally printed Labor Job Contract against which the material is received.
- Other details include Tax amount, Challan number, Invoice number and LR number.
- Authorization and hard copy of Goods Receipt Note.
- Allows Quality Checks on materials. GRNs, Purchase Orders and Labor Job Gate Pass made against the specified vendor can be selected to enter the following Quantities
- Quantity Rejected due to Third Party
- Quantity Rejected due to Raw Material
- Quantity for Rework
Reporting System of Sub Contracting Module
- Stock Lying at Third Party Sample
- LJGP Track Report Sample
- Rework Register
- Stock Lying at Third Party as on Date