As soon as a part leaves the shop for a surface treatment, a heat treatment or a machining operation handed to an outside firm, most systems stop seeing it. It reappears at receipt, sometimes weeks later. In between, value is tied up without being tracked, and the schedule works blind.
Two kinds of subcontracting, two treatments
Confusing the two explains a good share of failed configurations.
- Capacity subcontracting: the partner performs an operation you know how to do, because your machines are saturated. The operation already exists in your routing; it simply changes resource. Managing it stays a load problem.
- Specialist subcontracting: the partner performs an operation you cannot do — anodising, heat treatment, non-destructive testing. It is a permanent step in the routing, with its own lead time and negotiated unit cost.
Work in progress at the partner is stock
This is the point systems handle worst. Five hundred parts sent for heat treatment are neither in your store, nor consumed, nor delivered: they are stock held by a third party, which you still own. They must appear in a dedicated location — a “subcontractor store” per partner — and stay valued on the balance sheet. Without that, two consequences: your accounting stock is understated, and no one can say what is sitting where.
The practical corollary is useful: a stock report by subcontractor, printed each week, almost always reveals lots forgotten for months at a partner who never chased them.
Check the return, not just the quantity
A subcontracting return is received like a purchase, but with two checks that a standard purchase ignores. First the quantity: out of five hundred parts sent, how many come back conforming, how many are scrapped, and who bears the loss? The answer must be in the contract, and the system must be able to record scrap chargeable to the partner. Then conformity: a surface treatment is checked by sample, and the associated certificate must join the batch file — it is what an auditor will ask for three years later.
The partner's lead time belongs to your schedule
A subcontracted operation has a lead time, just as an internal operation has a cycle time. If that lead time is not declared in the routing, scheduling plans the next operation as if the return were instant, and the date promised to the customer is wrong from the outset. Declare a contractual lead time per operation–partner pair, and measure the real gap: it is the only data that lets you renegotiate usefully, or change supplier on a verifiable argument.
What you must be able to answer
A properly configured system answers four questions in seconds: which parts are currently at a subcontractor, and for how long? What value does that represent? Which partner keeps to its stated lead times? And for this part delivered last year, who did the surface treatment, with which certificate? If any of these answers requires opening a binder or calling someone, subcontracting is not being managed — it is being endured.