External Manufactures are one of Abel’s six core manufacturing processes.
External Manufacturing means an external company manufactures goods on your behalf or performs a step in your manufacturing process e.g. specialist coating or cutting. External Manufactures can consume stock that you send for each manufacture, or stock previously transferred and held at the external company’s premises ready for External Manufacturing orders. External Manufacturing documents can track service charges and materials to be sent and they can also be scheduled. They can be done in a foreign currency if your external manufacturer is overseas.
These are some of the scenarios for external manufacturing:
Manufacturing step for a Single Part
You supply an unfinished part to an external manufacturer, and they provide a manufacturing service for it e.g. powder coating.
- A single item e.g. a bracket is supplied and returned but the returned part is stocked as a different inventory code (Bracket – Coated Green) to the original (Bracket – Uncoated).
- The cost of the part is increased by the cost of the value-add service.
Sub-Assembly
You supply parts to an external manufacturer, and they provide a manufacturing service to produce another part e.g. welding or assembling.
- You supply the parts, they are picked and despatched to the external manufacturer.
- The External Manufacturer performs a manufacturing service.
- A different manufactured or assembled part is returned to you.
- The cost of the resulting part includes the picked parts and the manufacturing service provided by the external manufacturer.
Your Stock held at the External Manufacturer
You provide parts that are held at the external manufacturer’s location. When requested by you, the parts are consumed in the external manufacturing process and the finished goods or semi-finished goods are returned to you.
- An external manufacturing store location is maintained in Abel.
- Parts are sent to the external manufacturer using a stock transfer process.
- Parts are consumed at the end of the manufacturing process (back-flushed) based on a BOM.
- A Stock take process accounts for wastage and loss.
- The cost of the finished part includes the consumed parts and the external manufacturing service.