Eric Duchaine Typically I consider a subassembly an item that has had value add applied to it by my organization. If I purchase a component for an assembly, that comes in completed and ready for use, I classify that as a component raw material and it is used within the assembly operation. In my experience sub assemblies are used to capture value add, labor or material costs, that had to be applied to a product in advance of being used in a final assembly to capture all associated process costs. That is my experience. I hope it helps.

Somashekar BV It is as classified within your design documentation and has nothing to do with supplier or ordering.
We receive ordered material from supplier. This ordered material can be a part from origin (ex. A washer). This ordered material can be a full assembly from the supplier, but a part for you (ex. A pump assembly to be used in my BP monitor). You could send this part + some tubes and couplings to your sub-contractor and get from him an assembly (A sub-assembly for you)
Its how you define ~~~

Barnaby Keller It really just depends on the structure and hierarchy of your Bill of Materials and drawing package. Here at Keller Technology Corporation, as a CM to many medical device companies we encounter lots of different ways of structuring drawing packages. When providing engineering/design services we follow our customer's established format, numbering system and structure.

Eric Duchaine I would have to agree that the structure of the organization has much to do with it. We chose to handle subs the way we did largely in part due to our erp system. If there was a subassembly, even slitting a material from one size to a smaller size, it requires a full method of manufacturing and Bom independent from the final assembly Bom. If parts came to us, even as a multi level assembly and we did not do anything to it the part is handled as a material used in the final assembly. I would agree it all depends on how the company is structured.

Ee Bin Liew well, I have a question in turn.. what's the advantage of classifying a subassembly that is received at incoming from the supplier as a part?

Eric Duchaine In my business it's not a subassembly unless it gets value add at my facility. If we purchase a finished assembly from an outside contractor it is a purchased product just like a raw material. If I purchase and assembly then add an adhesive component before it goes into the finished assembly. That is a subassembly because I added the adhesive piece. I hope that helps.

Barnaby Keller Ee Bein Liew, I suppose how you classify it is dependent on what works best for your particular system. As in Eric's case it works for him only to consider it a sub assembly if they add value to it internally. The advantage of considering an incoming subassembly from a supplier a part is that is would presumably be simpler in the ERP system since it would not need to have all it's constituent components delineated. Eric could probably better speak to that as far as how this approach impacts his ERP system specifically.

Eric Duchaine There were a few reasons why we decided to take the direction we did. Utilizing subcontracted assemblies as a raw material allowed us to rely on the c of c from the supplier for acceptance (as long as they were doc to stock suppliers) reducing inspection requirements, it reduced our internal paperwork for the assembly also. If we had treated that as a subassembly, in our company, we would have needed a full m.o.m. Created and controlled by engineering. As a purchase product, engineering is able to provide input on the specification requirements and then it can be received as conforming without additional paperwork beyond a p.o. and purchase spec. In our business, if we create a subassy, it is subject to a much higher level of scrutiny. Our process for subassy's is used when we add value to a product before it is used in the final assy. This requires full quality inspection verifying that our value add is conforming to the customer specification prior to use in the final assembly. This adds much more time and cost to the product. By doing this we catch the purchased assy cost, our internal material costs and the labor costs for our value add work. That extended cost rolls into the final costing for the finished product.

One thing I would like to add is if you need to order any parts individually from that purchased sub-assembly, it would make sense to keep it as sub-assembly. However, if the cost of maintaining an item as sub-assembly is higher than buying sub-assembly once or twice a year to support field/cuter request you could make them purchased parts from the get go.

Ee Bin Liew there's indeed no one size fits all, and agree it's company dependent. There are several factors to consider.

* complexity of the master data in the ERP system - how products are grouped, and structured, also depends on the components being used across the product range. the greater the granularity, the greater the traceability and processing strain to the ERP system and its users.

* quality - this is more dependent on how critical the part/sub-assembly is rather than whether it's actually a part or a sub-assembly. we have various controls at incoming or conduct on-site supplier audits, for example, to mitigate the risks of a critical part/sub-assembly. so the impact to the decision part vs. subassembly is perhaps not as much.

* cost and finance - agree with all with regards to the impact to cost, due to the processing and value add (as Eric had described) on the constituent components, which impacts financial accounting and costing (labor, overheads etc.). However, If, for example, an entire coil (magnet) of an MRI comes through Incoming, to be further processed/assembled - with that level of complexity and value, would that coil be considered a part or a sub-assembly?

in the absence of a standardised definition, thus it's company defined, whichever works best based on the factors above.

Cheer,
Ee Bin

Wilbert van Deursen I think you can answer this question in many ways and it definitely depends on what your definition is of a subassembly. From a systems perspective, one is often limitted to the definition the system provides for it. As an example the material type Subassembly in SAP is actually a global perspective so if it is being produced in your company somewhere in the world, it needs to become a subassembly. Reason is in SAP one is not able to define a Raw material on the BOM header and create workorders for it. The material type in SAP is also very hard to change, so better have this on the safe side and use subassembly if in doubt.
From a regulatory perspective you could say anything we are responsible for in the building process, needs to be defined as a subassembly. Now even something that is outsourced from a manufacturing perspective is still a subassembly. Outsourcing is also driving the definition to easily push to a subassembly. Because what is outsourced now could be insourced tomorrow and vice versa. From a Finance perspective there could be reasons to have a different definition. Inventory in subassemblies is often referred to as WIP inventory (Work in Process). This means that if you do not like that but rather mark it as Raw Material inventory, you would need to adjust your definition. Etc.

Wilbert van Deursen I think you can answer this question in many ways and it definitely depends on what your definition is of a subassembly. From a systems perspective, one is often limitted to the definition the system provides for it. As an example the material type Subassembly in SAP is actually a global perspective so if it is being produced in your company somewhere in the world, it needs to become a subassembly. Reason is in SAP one is not able to define a Raw material on the BOM header and create workorders for it. The material type in SAP is also very hard to change, so better have this on the safe side and use subassembly if in doubt.
From a regulatory perspective you could say anything we are responsible for in the building process, needs to be defined as a subassembly. Now even something that is outsourced from a manufacturing perspective is still a subassembly. Outsourcing is also driving the definition to easily push to a subassembly. Because what is outsourced now could be insourced tomorrow and vice versa. From a Finance perspective there could be reasons to have a different definition. Inventory in subassemblies is often referred to as WIP inventory (Work in Process). This means that if you do not like that but rather mark it as Raw Material inventory, you would need to adjust your definition. Etc.

Wilbert van Deursen I think you can answer this question in many ways and it definitely depends on what your definition is of a subassembly. From a systems perspective, one is often limitted to the definition the system provides for it. As an example the material type Subassembly in SAP is actually a global perspective so if it is being produced in your company somewhere in the world, it needs to become a subassembly. Reason is in SAP one is not able to define a Raw material on the BOM header and create workorders for it. The material type in SAP is also very hard to change, so better have this on the safe side and use subassembly if in doubt.
From a regulatory perspective you could say anything we are responsible for in the building process, needs to be defined as a subassembly. Now even something that is outsourced from a manufacturing perspective is still a subassembly. Outsourcing is also driving the definition to easily push to a subassembly. Because what is outsourced now could be insourced tomorrow and vice versa. From a Finance perspective there could be reasons to have a different definition. Inventory in subassemblies is often referred to as WIP inventory (Work in Process). This means that if you do not like that but rather mark it as Raw Material inventory, you would need to adjust your definition. Etc.

Wilbert van Deursen I think you can answer this question in many ways and it definitely depends on what your definition is of a subassembly. From a systems perspective, one is often limitted to the definition the system provides for it. As an example the material type Subassembly in SAP is actually a global perspective so if it is being produced in your company somewhere in the world, it needs to become a subassembly. Reason is in SAP one is not able to define a Raw material on the BOM header and create workorders for it. The material type in SAP is also very hard to change, so better have this on the safe side and use subassembly if in doubt.
From a regulatory perspective you could say anything we are responsible for in the building process, needs to be defined as a subassembly. Now even something that is outsourced from a manufacturing perspective is still a subassembly. Outsourcing is also driving the definition to easily push to a subassembly. Because what is outsourced now could be insourced tomorrow and vice versa. From a Finance perspective there could be reasons to have a different definition. Inventory in subassemblies is often referred to as WIP inventory (Work in Process). This means that if you do not like that but rather mark it as Raw Material inventory, you would need to adjust your definition. Etc.

I would break out the supplier order to capture the deliverable, whether it be at a sub or final assembly stage. If it's expected that they deliver on the final, the drawings should indicate the order of operations in order to accomplish the order. If a sub-assembly is required at a stop point prior to the final assembly, it would be called out on the final assembly BOM. This is why I would always provide the supplier with a manufacturing BOM, Process Flow & PFMEA in the interest of total transparancy. This ensures communication in providing for an on-time delivery. As a Supply Chain or Manufacturing Engineer, I would typically route the order as if it were our own to process internally, regardless of where it might end up. So, if the order of operations suggest that at a certain point I would have to stop and close out the order of operations to include a sub-assembly in order to allow for the final, that would make for the determination.