Even outsourcing companies sometimes need to outsource.  This can be a cost effective way to complete a job when they do not have the resources or capabilities in-house.  However, three main actions are needed in order for it to work:

1. Notify Purchasing - after MRP creates demand for the processed component, purchasing must be notified to not only order the raw material, but also the processing of the raw material into the finished component.
   
   
2. Notify Inventory - once the raw material is in house, it must be sent for processing.  If there is a delay from initial receipt to shipping to the outsource provider it may delay the entire order.  If the same outsource company always processes the raw material, then this can be setup under the raw component so inventory knows where to send it.  Otherwise, purchasing must have a way to indicate which supplier will process the raw material for the specific order.
   
   
3. Reflect Costs in Accounting - if the additional costs are not reflected in the final assembly, it will not be priced correctly and can make the entire job unprofitable.  Many companies forget this because the labor is not done in-house and the tracking is done outside of their system.  (There is some debate on how and where to record this additional expense.  Is it reflected in the labor or materials?  The preferred method, for most, is to record these costs as part of the material cost since it is purchased and not produced.  This is the same reason companies do not separate the labor costs to produce a capacitor under labor for the final assembly.  If desired, the labor required for tracking and managing the outsourcing may be recorded under labor costs for the top level.)
   

Many companies do not have an effective way of tracking these within their system and ensure that each step in the process is completed quickly and correctly. It is possible to manage this outside of any system, but doing so requires careful attention and an awareness of the potential pitfalls.