Outsourced manufacturing items are goods and services we sell that are produced in collaboration with an outsourcing vendor. To support this process in NetSuite, we must define a charge item for use in purchasing transactions.
Step 1: Create the Outsourcing Charge Item
- Navigate to Lists > Accounting > Items > New.
- On the New Item page, select Other Charge for Purchase or Service for Purchase.
- Enter a unique Item Name/Number (e.g., Bike Production Charge).
- Complete the remaining fields on the item record as needed.
- Under the Purchasing subtab:
- Enter a Purchase Price.
- In the Cost Category field, select Outsourcing Charge.
- Note: Once we select Outsourcing Charge, the Can Be Fulfilled/Received option on the Preferences subtab is automatically enabled and cannot be modified.
- In the Vendors section:
- Select the appropriate Vendor.
- Check the Preferred box to set this vendor as the default.
- Under the Accounting subtab, select the appropriate Tax Schedule.
- Click Save.
Step 2: Set Up the Manufacturing Process
After creating the charge item, we must complete the following steps to configure the outsourced manufacturing setup:
1. Create a Bill of Materials (BOM)
- For example, name it Outsourced BOM.
2. Create a BOM Revision
- On the BOM Revision page:
- In the Item list, include the inventory components we’ll supply to the vendor (e.g., bike seats, bicycle wheels).
- Add the Outsourcing Charge item as one of the components.
- Specify the BOM Quantity per assembly (e.g., 1 seat, 2 wheels, 1 charge item).
- Click Save.
3. Create an Assembly Item
- Follow NetSuite’s process to create the assembly item record.
- On the Manufacturing subtab:
- Select the relevant Bill of Materials.
- Optionally, check the Master Default box to set this BOM as the default for the assembly.
- Click Save.