Subcontract Alternate Part Questions

  • 28 October 2022
  • 1 reply

Userlevel 3

We have two assemblies - one assembled in-house as a regular manufactured part to be used in the final assembled system.  The other is the same part, assembled from the same sub-components, but obtained from a sub-contract supplier.  The subcontracted part is an alternate for the primary assembly part in cases where outside labor is needed.  These are currently set up as a manufactured part and a purchased part, respectively.  We see that PO suggestions does not suggest purchasing the subcontract version when stock is low for the primary or the alternate.

We are trying to re-think the nature of the two parts.  My hunch is that we should make the alternate assembly a straight purchased part and not as a subcontract operation on a job.  I do not believe they are sending the subcomponents out to the supplier to assemble but rather having them secure the components themselves and “sell” the finished alternative part.  This would allow PO Suggestions to deal with it.

Any thoughts on handling this alternative part scenario?

-Todd C.


1 reply

Not a scheduling expert, but the big question that comes to mind for me is how does MRP ‘know’ whether to build in-house or flip to the alternative supply option?  Where does its signal to determine this come from?  It seems like there needs to be an upstream ‘What-If’ step exploration by the Supply side staff first, based on new demand, available capacity and some logic considering lead times of internal vs external sourcing - resource utilization/capacity, subparts in inventory, delta on costs etc.

Just the question and thoughts that came to mind,