MAN13E-Configure Activity-Based Subcontracting and Production Flow Costing


The basic principle of a production flow does not change when activities are subcontracted using Finance and Operations; material still flows between locations, process activities convert material to products, and transfer activities move material or products from one location to another.

In Dynamics 365 for Finance and Operations, there are two approaches for subcontracting: production orders and Lean manufacturing.

The first approach models the subcontracting work as a service that is related to an activity of a production flow. A cost group type, direct outsourcing, is required to be configured, so that the subcontracting services are not as part of a BOM.

The cost accounting of subcontracted work is completely integrated in the new costing for manufacturing in Microsoft Dynamics 365 for Finance and Operations.


  • Introduction
  • Configure activity-based subcontracting
  • Understand production flow costing
  • Practice labs
  • Module summary

Configure activity-based subcontracting

  • Configure production scheduling and subcontracting
  • Designate vendors as subcontractors
  • Configure production flow costing

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