The quick answer
Create the subcontractor's site as a location first, then edit the vendor. On the Preferences subtab, check Outsourced Vendor. On the Outsourced Manufacturing subtab, click the selector beside Manufacturing Locations, add the site in the popup, click Done and save the vendor. A location can belong to only one vendor, and the popup tells you when another vendor already has one.
The screenshots show sample data. Person and company names are fictional. Use your own vendor and locations when following the steps.
Before you start
In this example, Alex Morgan at Example Supply Co. sends machined crank arms to Brannock Heat Treating Co. in Tucson. Brannock heat treats them and charges for the work, and Example Supply Co. keeps some of its own stock at Brannock's site. NetSuite has to track that site as a place where inventory sits, which is why it needs its own location.
A few things have to be in place:
- The features. Outsourced Manufacturing, plus Purchase Orders, Advanced Receiving, Multi-Location Inventory, Assembly Items and Work Orders. Add Advanced Bill of Materials if your outsourced production uses BOMs and BOM revisions. They're under Setup > Company > Enable Features, and where they sit can vary by edition and release.
- The location. One location record for each subcontractor site, created before you link it to the vendor. A parent location such as Subcontractor Sites is a handy way to group them, but you don't need one.
- The vendor. The subcontractor already exists as a vendor. Here that's Brannock Heat Treating Co., with Linden Hollow US as its primary subsidiary. In a OneWorld account, check that the vendor, its location and the work orders you'll use later are valid for the same subsidiary. The exact checks depend on your subsidiary and location setup.
- A vendor form that shows the subtab. If you don't see Outsourced Manufacturing on the vendor, check that the feature is on, that your role can see it, and that your preferred vendor form shows Manufacturing Locations under Customization > Forms > Entry Forms.
The screens and labels here come from one account. The popup wording, the confirmation text and the way a location's name is displayed can differ with your release and vendor form.
Saving the vendor moves no stock and creates no transaction. Before the first outsourced order you still need:
- an outsourcing charge item, an Other Charge for Purchase or Service for Purchase item whose Cost Category is Outsourcing Charge, with a purchase price;
- an assembly whose bill of materials revision lists the components you supply and that charge item; and
- your components in stock at the vendor's location, received there or moved there with a transfer.
01. Make sure the site is a location
Go to Setup > Company > Locations. Brannock Heat Treating is already there, indented under its parent Subcontractor Sites, with City Tucson and State/Province AZ. Wexford Plating sits under the same parent and belongs to another subcontractor. If your subcontractor's site isn't listed, click New Location and create it first.
02. Open the vendor for editing
Go to Lists > Relationships > Vendors and click Edit beside Brannock Heat Treating Co. The vendor opens in edit mode with Save and Cancel at the top and the subtabs across the middle of the page.
03. Check Outsourced Vendor
Click the Preferences subtab. Under Send Transactions Via, Email, Print and Fax stay cleared. Check Outsourced Vendor. That marks Brannock as an outsourced vendor.
04. Look at the optional subtabs
Three other subtabs are worth a look. None of them needs a change for this setup.
Access is where people at the vendor get a login. Give Access is checked and the Roles sublist lists Subcontractor Portal, so Brannock's staff can already sign in. Vendor Access has to be enabled for this subtab to be useful, and what the role can do depends on its permissions. A role like this doesn't by itself let the vendor receive inventory or fulfill orders, and the fields you see depend on your account.
Vendor Certification is an empty list. New Vendor Certification and Attach are where you'd record a certificate the vendor holds, such as a quality or compliance document. Time Tracking holds the Time Approver and a list of time entered against the vendor, with New Time and New Weekly Time. You only need it if you record time for the vendor.
05. Choose the manufacturing location
Click the Outsourced Manufacturing subtab. Manufacturing Locations is empty. Click the selector beside it, the double chevron, to open the Choose Manufacturing Locations popup.
The popup lists every location. Wexford Plating is labeled Already assigned to: Wexford Metal Co., because a location can belong to only one vendor, so Brannock can't take it. A vendor can have several locations, though.
Click Brannock Heat Treating under Click Selection to Add. It moves to Current Selections. The x beside it removes it again if you pick the wrong one.
Click Done. Manufacturing Locations on the vendor now shows Brannock Heat Treating. The vendor hasn't stored it yet, so the next step is saving.
06. Save and check the result
Click Save. The vendor reopens in view mode with the confirmation Vendor successfully Saved.
Click the Preferences subtab. Outsourced Vendor is checked.
Click the Outsourced Manufacturing subtab. Manufacturing Locations shows Subcontractor Sites : Brannock Heat Treating, the location with its parent in front of it.
Check the result
- Brannock Heat Treating is listed under Subcontractor Sites in the Locations list.
- Outsourced Vendor is checked on Brannock Heat Treating Co.'s Preferences subtab.
- Manufacturing Locations on the Outsourced Manufacturing subtab shows Subcontractor Sites : Brannock Heat Treating.
- Wexford Plating stayed labeled as already assigned to its own vendor.
Common questions
How do I set up a vendor for outsourced manufacturing in NetSuite?
Create the subcontractor's site as a location, then edit the vendor. Check Outsourced Vendor on the Preferences subtab and add the location under Manufacturing Locations on the Outsourced Manufacturing subtab. Save the vendor.
What does the Outsourced Vendor checkbox do?
It marks the vendor as an outsourced vendor. It's a separate field from Manufacturing Locations, and whether the checkbox appears and what NetSuite does when only one of the two is set can depend on your release, vendor form and scripts. Set both, and test it in your account.
Why does the subcontractor's site need to be a location?
The vendor is the subcontractor. The location is the site where your stock is held and the production happens. NetSuite tracks inventory by location, so the stock you leave there has to sit somewhere you can see it. Linking the location to the vendor tells NetSuite which vendor operates it.
Can one location be assigned to more than one vendor?
No. A location can belong to only one vendor. In the Choose Manufacturing Locations popup, a location that another vendor already holds is labeled with that vendor's name. One vendor can have several locations.
Why is the Outsourced Manufacturing subtab missing from my vendor?
Check three things. The Outsourced Manufacturing feature and the inventory and manufacturing features it builds on need to be on. Your role needs to be able to see the subtab. And your preferred vendor form needs to show Manufacturing Locations under Customization > Forms > Entry Forms. A customization on the form can also hide it.
Do I need to give the subcontractor access to NetSuite?
No. Access, Vendor Certification and Time Tracking are optional for this setup. Give Access lets people at the vendor sign in under a role you choose and needs Vendor Access enabled. What that role can do is decided by its permissions.
Does saving the vendor create a purchase order or move stock?
No. It updates the vendor record and links it to its location. It doesn't create a purchase order, work order, item receipt, assembly build or transfer, and it moves no inventory. A script or workflow in your account could add side effects, so test it separately.
Does a work order automatically become outsourced?
It can. When a work order uses the vendor's location and the assembly, outsourcing charge item and bill of materials revision are set up, NetSuite can treat the work as outsourced and show the vendor on the work order's Outsourcing subtab. What fills in automatically depends on your form and configuration, so check it on a test work order.