Outside processing commonly refers to the use of external suppliers or subcontractors to perform specific manufacturing, special process, or finishing steps on parts, subassemblies, or assemblies instead of doing those steps in house.
In regulated manufacturing environments such as aerospace, pharmaceuticals, or medical devices, outside processing often includes activities like heat treatment, surface treatment, coating, nondestructive testing, precision machining, or cleaning performed by qualified vendors. The work is typically governed by purchase orders, technical specifications, quality requirements, and traceability expectations.
Operational meaning
In day-to-day operations, outside processing usually involves:
- Issuing material or semi-finished parts to an external supplier under a specific work or purchase order
- Providing controlled technical data, drawings, routings, or special process instructions
- Tracking quantities, serial or lot numbers, and shipping documentation to maintain traceability
- Recording completion, inspection results, and certifications (for example special process or test reports) when parts are returned
- Integrating outside processing steps into the production routing in ERP/MES so lead times, capacities, and costs reflect the external work
Outside processing is distinct from general procurement of standard materials or catalog parts because it applies to customer- or project-specific work performed on items that are part of an internal manufacturing order.
Use in aerospace supply chains
In aerospace supply chains, outside processing often covers special processes that require specific approvals, such as surface treatments, welding, or nondestructive inspections. These suppliers are typically subject to additional qualification, auditing, and documentation controls to support configuration management and end-to-end traceability.
Common confusion
- Outside processing vs. outsourcing production: Outside processing usually refers to discrete process steps in an otherwise internal build, while outsourcing production can mean having an external party build an entire component or assembly.
- Outside processing vs. purchasing standard parts: Buying standard catalog parts or raw materials is procurement, not outside processing, because no customer-specific processing is being performed on your own work-in-progress.