How to Implement Subcontracting in Odoo for Component Manufacturing (2025 Guide)

In today’s fast-paced manufacturing sector, subcontracting plays a vital role in enabling companies to scale quickly and optimize production workflows. For manufacturers using Odoo 18, recent updates in 2025 have enhanced subcontracting capabilities—especially for component and part-based production. If you’re a business owner or operations decision-maker exploring how to improve efficiency and vendor collaboration, mastering Odoo subcontracting manufacturing is essential. 

In this blog, we walk you through how to implement and manage subcontracting in Odoo 18 effectively, with a focus on assigning vendors, tracking deliveries, and maintaining cost control.

Let’s dive in.

What is Subcontracting in Odoo?

Subcontracting in Odoo refers to the process of outsourcing specific manufacturing operations or the assembly of components to third-party vendors. Instead of producing all parts internally, you can assign certain bills of materials (BoMs) to subcontractors, send them raw materials, and receive finished goods.

This model is beneficial when:

• You want to increase production capacity without investing in new infrastructure.
• A vendor specializes in a process that is costlier for you to perform in-house.
• You want to reduce lead times for certain product components.

Odoo 18, released in 2025, brings more automation and transparency to subcontracting processes, making it easier to manage both logistics and profitability.

Step-by-Step: Setting Up Odoo Subcontracting Manufacturing

Let’s go through the essential steps to configure and manage subcontracting in Odoo 18 for component or part manufacturing.

1. Activate the Subcontracting Feature

To enable subcontracting:

• Go to the Manufacturing module.
• Navigate to Configuration → Settings.
• Under the “Operations” section, make sure Subcontracting is activated.
• Save your settings.

Once enabled, Odoo allows you to define subcontracted operations directly within the Bill of Materials and routing flows.

2. Create a Product with a Subcontracted BoM

When subcontracting a manufactured product, you need to create a Bill of Materials that outlines all raw materials or semi-finished components required for the subcontractor to complete the item.

• Go to Products > Create a new product (e.g., Metal Housing Unit).
• Set the product type to Manufactured.
• Under the Inventory tab, check the box “Resupply Subcontractor on Order.”
• Next, navigate to Bill of Materials → Create.
  • Select the product.
  • Choose Subcontracting as the BoM type.
  • Add required components the vendor will use.

This setup ensures that when a purchase order is generated for a subcontracted product, Odoo triggers a component delivery to the subcontractor.

3. Assign the Right Vendor

To complete the subcontracting setup:

• Navigate to the product’s Purchase tab.
• Add the subcontractor as a vendor.
• Set relevant procurement lead times and pricing.
• Under Routes, assign the route as “Buy” and ensure that “Subcontractor” is chosen.

Odoo links subcontracting orders directly to this vendor, automatically managing procurement and logistics.

4. Configuring Component Delivery to Subcontractors

In 2025, Odoo 18 introduced enhanced delivery tracking for subcontracting workflows. This feature helps manufacturers have full visibility over raw material movements between your warehouse and the vendor’s location.

Here’s how to manage it:

• Navigate to Inventory → Configuration → Locations.
• Create a location called “Subcontractor WH – [Vendor Name]”.
• Enable “Is a subcontractor location.” This is essential for stock movement tracking.

When a subcontracting order is confirmed, Odoo automatically generates an internal transfer of raw components from your stock to the subcontractor’s location. You can track:

• Items sent
• Items pending delivery
• Returns or excess components

This ensures transparency and precision across the supply chain.

Real-Time Cost Control with Analytical Accounting

One of the most critical aspects of Odoo subcontracting manufacturing is managing and tracking costs. Updates in Odoo 18 allow tighter integrations with analytical accounts to help you break down expenses per vendor, product, or subcontracting contract.

To use this feature:

• Enable Analytic Accounting from the Accounting module.
• Assign an Analytic Account to the subcontracting product or BoM.
• All procurement, delivery, and invoicing processes will compile on this account.

Benefits include:

• Full visibility into subcontractor pricing vs. internal production cost.
• Better forecasting and margin analysis.
• Clear data to negotiate better vendor rates.

Tracking Subcontract Orders and Inventory Levels

A critical task in managing subcontracted manufacturing is ensuring accurate inventory levels and monitoring incoming and outgoing quantities. 

In Odoo 18:

• Navigate to Manufacturing → Subcontract Orders to view all current outsourced operations.
• Use filters such as vendor name, product type, or delivery deadline to prioritize.
• As components are consumed by the vendor, Odoo automatically adjusts inventory levels in real-time.

If you enable a 3-way match (receipt, invoice, and purchase order), you can also prevent mismatched supplier invoices and tighten financial controls.

Best Practices for Successful Odoo Subcontracting Manufacturing

1. Standardize BoMs Across Subcontractors: Ensures uniformity in processes and easy scaling.

2. Use Lot and Serial Tracking: Especially for regulated industries—helps comply with traceability and quality audits.

3. Automate Alerts for Delays: Set up triggers for late deliveries or short stock at the vendor.

4. Keep Vendor Scorecards: Use Odoo’s Vendor Performance tools to track lead times, quality scores, and pricing trends.

5. Review Reports Regularly: Dashboards in Odoo 18 give visual overviews of subcontracting costs, order status, and supplier performance.

The 2025 Advantage: What’s New in Odoo 18 for Subcontracting?

Odoo 18, released in early 2025, introduces several improvements over previous versions:

• Enhanced multi-level BoM subcontracting: Handle nested subcontracting more efficiently.
• Real-time API integrations with vendors: For those using advanced supplier portals.
• Improved reporting with AI forecasting: Gain actionable insights on when to switch vendors or insource operations.
• Better UX for component delivery and receipt tracking.

These features make managing outsourced manufacturing smoother and more data-driven than ever.

Final Thoughts

Implementing Odoo subcontracting manufacturing gives component manufacturers the flexibility to scale, reduce overhead, and deliver faster without compromising quality. With Odoo 18’s powerful features in 2025—from precision logistics to real-time analytics—you’re equipped to build a subcontracting workflow that supports long-term growth.

If you’re looking for guidance on setting up or optimizing subcontracting in Odoo for your manufacturing business, our team is here to help. We specialize in Odoo implementation, customization, and training tailored for manufacturers like you.

Ready to streamline your subcontracting process in Odoo?  

Let’s talk. Contact us for a free consultation today.