How to Implement Subcontracting in Odoo 18 Manufacturing

In the fast-paced world of manufacturing, companies often look for smart ways to improve efficiency and reduce in-house load. One powerful method to do this is by outsourcing part of the production process — something we call subcontracting. And when it comes to ERP solutions, Odoo Subcontracting in version 18 has made this easier and more intuitive than ever before.

Let’s break down exactly how you can implement subcontracting in Odoo 18 Manufacturing step-by-step. Trust me, by the end of this article, you’ll be ready to set it up like a pro.

What is Subcontracting in Odoo?

Imagine you run a company that manufactures smartphones. You assemble the final product in-house, but the battery — a crucial component — is made by a specialized vendor. Instead of building batteries yourself, you send the raw materials to a subcontractor who assembles them for you. That’s subcontracting.

In Odoo, subcontracting means sending raw materials to an external partner (vendor), who then returns the finished or semi-finished product back to you. This flow can be fully managed in the system, making life much simpler for supply chain and production teams.

Benefits:

• Reduces internal workload
• Optimizes the production timeline
• Enables collaboration with expert third-party manufacturers
• Provides full traceability of materials and products

New Enhancements in Odoo 18 for Subcontracting

Odoo 18 brings several improvements over its predecessor that directly benefit subcontracting workflows:

• Better UI/UX for managing subcontractors
• Automated stock transfers and replenishments
• Enhanced tracking of raw material consumption
• Advanced reporting tools to monitor vendor performance

These updates are geared toward streamlining the manufacturing ecosystem and creating more automation-friendly environments.

Prerequisites to Enable Subcontracting in Odoo

Before diving into setup, here’s what you need:

1. Install These Modules:
   • Inventory
   • Manufacturing
   • Purchase
2. Enable Features:
   • Go to Manufacturing → Configuration → Settings and enable Subcontracting.
   • In Inventory → Settings, enable Multi-step routes for stock operations.

Step-by-Step Guide to Implement Subcontracting in Odoo 18

Step 1: Configure the Subcontractor as a Vendor

• Go to Purchase → Vendors → Create.
• Add basic details like name, contact info.
• Under the Inventory tab, mark them as a Subcontractor.

Step 2: Create a Bill of Materials (BoM) with Subcontracting

• Navigate to Manufacturing → BoMs → Create.
• Select the product to be assembled externally.
• In the BoM Type, choose Subcontracting.
• List the raw materials required for the assembly.
• Assign the vendor under the subcontractor field.

Step 3: Enable Subcontracting in Manufacturing Settings

• Confirm that the Subcontracting checkbox is enabled under Manufacturing settings.

Step 4: Create a Purchase Order

• Go to Purchase → Create a Purchase Order.
• Choose the subcontractor as the vendor.
• Select the final product to be assembled.
• Odoo will automatically detect that it’s a subcontracted product and will handle the rest.

Step 5: Register Receipt of Subcontracted Products

• Once the subcontractor sends the finished goods, go to Inventory → Receipts.
• Validate the receipt. Odoo will automatically consume raw materials (based on BoM) and log the stock movement.

Step 6: Monitor Production and Stock Movements

• The system creates a backend production order for internal tracking.
• Check consumption and availability of raw materials.
• View the full traceability from Inventory → Traceability → Lots/Serial Numbers.

Best Practices and Tips

• Use Automated Reordering Rules: Set min-max stock rules to ensure raw materials are always available for subcontracting.
• Track Everything: Use lot or serial tracking for raw materials and finished goods.
• Add Quality Checks: Create quality points for products received from subcontractors to ensure compliance.
• Create Smart Alerts: Use automated email/SMS alerts to notify vendors when their tasks are due.
  
• Use Reporting Tools: Odoo 18 offers powerful dashboards. Leverage them to analyze subcontractor performance.

Common Mistakes to Avoid

• Forgetting to mark the vendor as a subcontractor
• Not selecting the right BoM type (must be Subcontracting)
• Ignoring routing rules and raw material locations
• Missing stock routes can cause delivery errors
• Overlooking return logistics if products are rejected

Conclusion

There you have it — a complete, actionable guide to implementing Odoo Subcontracting in version 18. With a few configuration tweaks and smart setups, you can outsource parts of your manufacturing process with full control, visibility, and efficiency.

This powerful feature allows businesses to scale rapidly while still ensuring quality and traceability. So, don’t wait. Enable subcontracting in your Odoo instance and watch your manufacturing process transform.

Need help setting up subcontracting workflows in Odoo?

Our experts are just a Call away. Let’s simplify your manufacturing process together — Contact Us and get started today!

FAQs

1. Can I use multiple subcontractors for one product in Odoo?

Yes, Odoo supports assigning multiple vendors to a product. You can define different BoMs for each if needed.

2. Do I need to track raw materials manually?

Nope! Odoo automates raw material tracking once you configure the BoM and enable subcontracting properly.

3. What if my subcontractor sends partial quantities?

Odoo handles partial receipts too. You can validate partial deliveries and keep the order open until it’s complete.

4. Is it possible to automate notifications to subcontractors?

Absolutely! Use automated actions or Odoo Studio to set up email/SMS alerts when POs are confirmed or products are received.

5. Can subcontracting be used for service-based outsourcing too?

Yes, as long as the output is linked to inventory or manufacturing, you can tailor the process even for service-based subcontracting.