A company is implementing Dynamics 365 Supply Chain Management.

Box 1: BOM line

You must set up and release a subcontractor item so that it can be included on the BOM and subcontractor charges are included in the BOM calculation.

To be considered in planning and cost calculation, the service must be added to the BOM. The BOM line must be of the Vendor type, and it must be allocated to the route operation that the service is allocated to. This route operation must have a costing resource and resource requirement that point to a resource of the Vendor type that connects the operation and the related service to the corresponding vendor account.

Box 2: Clear stocked product

Because the subcontractor is a step included in a BOM but not a tangible item, inventory for the item must not be tracked in the warehouse.

Subcontracting of route operations

To use subcontracting of route operations for production or batch orders, the service product that is used for the procurement of the service must be defined as a product of the Service type. Additionally, it must have an item model group that has the Stocked product option under Inventory policy set to Yes. This option defines whether a product is accounted as inventory on product receipt (Stocked product = Yes), or whether the product is expensed on a profit and loss account (Stocked product = No). Although this behavior might seem contradictory, it's based on the fact that only products that have this policy will create inventory transactions that can be used in cost control to calculate planned cost and determine the actual cost when a production order is ended.