Revolutionizing Contract Manufacturing with NetSuite's Outsourced Manufacturing Solution

In today's competitive manufacturing landscape, efficiently managing third-party contract manufacturing organizations (CMOs) can make the difference between struggling with supply chain complexity and achieving streamlined operations. NetSuite's Outsourced Manufacturing solution, introduced in the 2020.1 release, offers a comprehensive approach to help manufacturers who rely on contract suppliers.

Business Value: Why Outsourced Manufacturing Matters

This powerful enhancement delivers tangible benefits for manufacturers working with CMOs:

• Increased Automation - Eliminate manual processes and reduce errors
• Reduced Overhead - Lower administrative costs through integrated workflows
• Enhanced Visibility - Gain real-time insights into your outsourced production
• Improved Accounting - Accurate financial reporting for outsourced manufacturing

Key Functionality That Transforms Manufacturing Operations

The Outsourced Manufacturing solution synchronizes procurement and production transactions directly on the NetSuite Cloud ERP platform. This integration allows you to:

• Seamlessly connect work orders and assembly builds with your vendors' processes
• Track all costs incurred by vendors in real-time
• Unify service items, vendor purchase orders, and item receipts with work orders and assembly transactions

Two Flexible Approaches to Outsourced Manufacturing

NetSuite provides two primary methods for outsourcing your manufacturing efforts:

1. Outsource from a Purchase Order

After receiving an outsourced item on a PO, NetSuite automatically builds the assembly for the outsourced work order. This ensures all manufacturing specifications—including expected completion time and anticipated waste—are clearly documented and accompany the PO to your subcontractor.

Within the PO, you can define critical outsourcing details:

• Assemblies
• Outsourcing location
• Production timeline (start and end dates)
• Bill of Materials and revisions

2. Outsource from a Work Order

Work order-based outsourcing provides additional flexibility for manufacturers with more complex production requirements.

Real-Time Cost Visibility Improves Pricing Strategy

Understanding your true cost of goods (COGS) is essential for establishing competitive yet profitable pricing. With Outsourced Manufacturing, you gain comprehensive visibility into all manufacturing costs in a single view:

• Components owned by your company
• Labor costs at the subcontractor
• Assembly location expenses
• Additional component costs for the build

Expert Guidance When You Need It

Whether you're new to NetSuite or an existing user looking to optimize your manufacturing operations, Our team of experienced consultants can help you implement and maximize the value of these powerful features. Our NetSuite experts, with over 20 years of business process optimization experience, are ready to provide personalized demonstrations and discuss solutions to your specific outsourcing challenges.