Dropship Subcontracting

Key points

• • Time Savings: No need to ship to warehouse then redeliver

• • Cost Reduction: Save on shipping and storage costs

• • Speed: Direct delivery from subcontractor to customer

• • Flexibility: Combine subcontracting and dropship

Key points

• • MRP Subcontracting (Outsourced Manufacturing)

• • Stock Dropshipping (Direct Delivery)

Steps

• 1. Go to Inventory → Configuration → Warehouses.

• 2. Select warehouse.

• 3. Warehouse Configuration tab: Check Resupply Subcontractor on Order.

• 4. System automatically creates: Dropship Subcontractor picking type, Dropship Subcontractor route, Stock rules.

Steps

• 1. Go to Contacts → Create/edit vendor.

• 2. Setup: Is a Subcontractor (check), Subcontracting Location (select location), Customer Delivery Address (delivery address if needed).

Steps

• 1. Go to Sales → Products.

• 2. Select product.

• 3. Inventory tab: Routes - select "Dropship Subcontractor on Order".

• 4. Purchase tab: Add vendor (subcontractor), enter price and lead time.

Steps

• 1. Go to Manufacturing → Bill of Materials.

• 2. Create BOM: BoM Type = Subcontracting, Subcontractor (select vendor), Components (add materials).

Key points

• • Customer places order (Sale Order) → Auto-create Purchase Order (to subcontractor) → Auto-create Manufacturing Order (at subcontractor) → Auto-create Resupply Picking (send materials) → Send materials to subcontractor → Subcontractor manufactures → Subcontractor delivers directly to customer → Update status and record costs

Roles

Documents

Steps

• 1. Go to Sales → Orders → Quotations.

• 2. Click Create.

• 3. Fill information: Customer, Delivery Address, Product (dropship subcontracting product), Quantity, Unit Price.

• 4. Click Save.

Steps

• 1. Open Sale Order.

• 2. Click Confirm.

• 3. System automatically: Creates Purchase Order to subcontractor (Destination = Customer address), Creates Manufacturing Order, Creates Resupply Picking for components.

Key points

• • Purchase: PO to subcontractor

• • Delivery: Delivery order (from subcontractor to customer)

• • Manufacturing: MO at subcontractor

Steps

• 1. From Sale Order, click Purchase smart button.

• 2. Or go to Purchase → Purchase Orders.

• 3. Filter by Dropship Subcontracting.

Key points

• • Destination Address: Customer address (not company warehouse)

• • Picking Type: Dropship Subcontractor

• • Warning: Alert that this is a PO for subcontracting

Steps

• 1. Open PO.

• 2. Check: Vendor (subcontractor), Destination (customer), Product and quantity.

• 3. Click Confirm Order.

• 4. Send PO to subcontractor.

Steps

• 1. From PO, click Resupply smart button.

• 2. Open resupply picking.

• 3. Click Check Availability.

• 4. Click Validate to send.

• 5. Print delivery slip.

Steps

• 1. From PO, click Manufacturing smart button.

• 2. View Manufacturing Order.

• 3. Status: Draft (not started), Confirmed (confirmed), In Progress (manufacturing), Done (completed).

Steps

• 1. Subcontractor updates status (via portal or email).

• 2. Company goes to Inventory → Deliveries.

• 3. Find delivery order (Supplier → Customer).

• 4. Click Validate to confirm delivery.

• 5. System records: Goods delivered to customer, Update Sale Order, Create invoice.

Steps

• 1. Go to Inventory → Reporting → Stock.

• 2. Filter by Location = Subcontracting location.

• 3. View: Components at subcontractor, Quantity, Value.

Key points

• • Tracks stock at subcontracting location

• • When new order arrives

• • Auto-creates resupply picking

• • Sends sufficient components for production

Steps

• 1. Go to Inventory → Operations → Inventory Adjustments.

• 2. Create new adjustment.

• 3. Location: Subcontracting location.

• 4. Enter actual quantity.

• 5. Validate to adjust.

Key points

• • Components Cost: Material costs sent

• • Subcontracting Service: Processing cost (from PO)

• • Shipping Cost: Shipping cost (if any)

Key points

• • System records: Deduct components from subcontracting location, Record finished goods delivered, Create journal entries

• • Does not go through company warehouse

• • Direct from subcontractor to customer

Key points

• • COGS recorded when delivering

• • Includes both components and service cost

• • Module handles dropship flow correctly

Steps

• 1. Go to Sales → Reporting → Sales.

• 2. Filter by: Route = Dropship Subcontractor, Date range.

• 3. View: Revenue, Number of orders, Margin.

Key points

• • Lead time: Time from order to delivery

• • On-time delivery: On-time delivery rate

• • Cost: Cost compared to regular sales

• • Customer satisfaction: Satisfaction level

Key points

• • Cause: Route not activated or product not configured

• • Solution: Check warehouse has Resupply Subcontractor enabled, Check product has route "Dropship Subcontractor on Order", Check vendor is subcontractor, Recreate Sale Order

Key points

• • Cause: PO does not receive correct customer address

• • Solution: Check Sale Order has correct Delivery Address, Check PO Destination Address, Manually correct if needed, Notify subcontractor

Key points

• • Cause: Resupply picking not created or insufficient stock

• • Solution: Check BOM has components, Check stock availability, Create PO to purchase components if missing, Validate resupply picking when sufficient

Key points

• • Effective Management: SLA with subcontractor, Tracking number, Quality check, Customer communication

• • Cost Optimization: Bulk shipping, Consignment stock, Negotiate rates, Compare costs

• • Risk Management: Backup subcontractor, Safety stock, Insurance, Contract terms

• • Customer Experience: Transparent communication, Branded packaging, Quality assurance, Return policy