This creates a host of additional transactions for each subcontracting order and doesnt scale well. 4.Issue material to vendor with movement type 541. Once again thanks a lot for all your efforts. Create Subcontracting vendor in FIORI. Process flow of basic subcontracting process with deliveries 1 - ME21N - Making Subcontracting Purchase Orders In order to create a subcontracting purchase order it is necessary to choose an item type 'Subcontracting': 'L' as highlighted in the screen below. Upon issuing a subcontracting PO and shipping out the components to the supplier, the buyer doesnt technically receive updates on the production of the order until the final product or subassembly with the components is shipped back from the supplier to the buyer. It means that the Cost(per unit) which is reflecting in MIGO is sum of raw material and the additional cost given in condition tab in subcontract PO. The labor charge is JPY 2,000 per piece. Display Material document App Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. Many a times, more than one subcontractor is used for manufacturing at different level of BOM. Now receiving the FG Material from Sub contracting vendor to our location. The vendor will be billed only for items delivered. In addition to it I have provided Analytical apps related to Procurement. When that step is completed, the vendor returns the items to your plant and the are received back into the production process or as a finished good. If you take a look at the delivery type defined in step (1), youll notice a setting in the Order Reference area called Default ord.ty.. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. Thanks a lot. We only pay the prime contractor, prime pays the subs. Therefore the 27 pallets received will be 10% more expensive than planned. Post Goods receipt for PO & Good Movement App Mapping procedure of a given scenario in SAP system. I suspect, however, that the issue is that perhaps the status of the serial number is not being updated properly. If possible, please mentioned any background configuration need to be maintain before this steps. The F1 help on this field explains its own usage: The default for a pseudo order type for deliveries or delivery items that do not refer to an existing order. We want to receive back MAT1-100020. The subcontractor converted the raw sims into finished sims well packed and returned finished product back to the company. Again, that is not necessarily bad, depending on your accounting policies and the specific case. Please also include accounting-entries screenshots. Unfortunately they did not. using GR for Purchase order with Movement type 101. Goods receipt items for the packaged SIM cards (end product) supplied by the vendor. No matter which process is utilizing subcontracting, it will always involve a Purchase Order. Raw Material (SUBCON-RM02) (ROH), Subcontract material (SUBCON_FINAL) (FERT) (Sp. The system will open a window with the list of documents in accounting. Editors note: This post has been adapted from a section of the book Sourcing and Procurement with SAP S/4HANA by Justin Ashlock. Subcontracting refers to the process of entering a contractual agreement with an outside person or company to perform a certain amount of work. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. Dear Experts, In Subcontracting process if the subcontracting period of 180 days is completed and if material is still with Vendor, how to complete the process. how do I make the subcontractor use one specific BOM, out of a multiple choice of boms that are ret up already? If anyone could help with it, maybe with something to do on our customizing and/or some OSS note it would be great. Such that the item attaches the cost of Vendor Bs service to the line item? Billing the customer. Click on Simulate button which will notify you of any errors. Did you learn something new? It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. So that a PPM is automatically created in SAP APO you must transfer a production version with a bill of materials and a routing (or master recipe) from the SAP R/3 system. Create Supplier Invoice Apps or Incoming Invoice Apps. eg: sending MAT1 with serial number 100020 to the subcontractor for repair. (here material and components are MAT1 only). Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. But SAP does not give here any flexibility. Keep up-to-date with SAP information and training. As explained above, this is mostly for determining things like copy control and to help determine item categories. However if they have never been shipped due to a loading problem on the subcontractor side, that is definitely not ok. A subcontracting product is valued with the price of the service plus the cost of the components. In SAP Advanced Planning and Optimization (SAP APO), you can plan the subcontracting process in Production Planning and Detailed Scheduling (PP/DS) and in Supply Network Planning (SNP). The process of buying materials and obtaining services from vendors or dealers is called procurement. What do you think? In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. Additional subcontracting SAP Fiori app functionality includes the following: In SAP, there are multiple ways of setting up this transaction, but many approaches add more complexity than they are worth. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. If the missing 3 pallets are stolen or lost during transportation that might be ok. Your email address will not be published. Easily understood and completed my Sub-contracting entry. The components that the vendor needs to manufacture the end product are specified in the subcontract order. Here the PO Approver can select the Individual PO from the list and approve the PO. 2.Maintain the BOM for the material. Subcontracting with multiple production versions is supported. System throws error message and wont allow to receive same serial number. The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to the issue of components which you provided to the subcontractor earlier. Make a request for us to schedule training around what works for you? Trademark, SAP ERP Central Component all versions ; SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all versions ; SAP enhancement package for SAP ERP, version for SAP HANA all versions, During the Subcontracting process there is no Delivery and Purchase Order link, Using ME2O transaction to create an Outbound delivery there is no direct link between the subcontracting Purchase Order and the delivery note, SAP Enhancement package for SAP ERP, version for SAP HANA. Thanks and Regards, Sapmm user Find us on Privacy Terms of Use Anyway I have got a question: how do we proceed when we have to PRODUCE a component that need to be sent to a Vendor to get the final good? PO Approval App. First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. Info button. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. The system proposes the labor charge from the info record for the subcontracting product. First, well start with. Click to share on LinkedIn (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Pocket (Opens in new window), SAP Humor: the adventures of the new spaceship BERID, SAP Settlement Management: The Multiple Contract Condition Problem. if yes do you have example idoc. How to manage serialized material for subcontracting repair? However, there is no copy control from an STO PO to an SD Delivery. They are summarized below: A material BOM needs to be created before any subcontracting order can be placed. In this blog, SAP Sourcing and Procurement consultant will be able to learn the concept and mapping procedure of Multilevel Subcontracting Process with Two Subcontractors in SAP system. When delivery papers are needed, a delivery should be created. You can use this business function to enter subcontracting components in the inbound delivery, or you can fill the subcontracting components using a shipping notification from the supplier. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. I can not see the images Any idea why or how could I see them? Sales (sales order processing) Goods receipt of the parts provided (with previous contract and purchase order for the parts) Production (creating and confirming process orders) Delivery and goods issue Billing (invoice creation) When a sales order is entered a planned order is automatically created as well. Sub contracting Info Record Created in FIORI. Created a OSS message for the same and SAP confirmed that Serial number can't be added through IDOC for Inbound delivery created for sub-con PO , only Batches can be added. This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. user will convert to PO. Searching PR creation apps in Apps Finder in FIORI screen. Imagine the following, quite typical scenario. This purchase order shows up in the ME2O transaction. Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. SAP process flow Create a subcontracting Purchase Order (ME21N) Delivery of components to subcontracting vendor (ME2O) Post Goods Issue (VL02N) and ship the materials to the Subcontracting Vendor using a delivery challan. A planned order in the subcontractor location produces the material in that location and a stock transfer requisition transfers the material from the subcontractor location to the demand location. Do you have a question and want it to be answered ASAP? Generally, SAP SD processes rely upon copy controls to define how documents and data are copied from the source (i.e. You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. So, how does SAP know when and how to copy data between these two objects? The good receipt and the goods issuewill be done simultaneously by the SAP system. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. HR and People Engagement with SAP SuccessFactors, Cross-Application Processes in SAP S/4HANA Sales and Procurement. Implementation of "External Material Processing using Production Orders": Develop a process in SAP to support all efforts related to External Processing using Production Orders as the method for subcontracting. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. This can be doneeither manually or through the use ofa BOM. Analytical apps related to PR, PO, GR, IV- You can have it without BOM by entering all the components manually. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. Your usage of this website signifies your agreement with our terms and conditions. List Material document Apps Later, the subcontractors returned the boxes back to the client. Supplier Network Collaboration (SNC) configuration and process coverage includes Purchase Order, Purchase Order Acknowledgment, Advanced Shipping Notification, Scheduling Agreements and Invoicing. Posting Invoice verification using Create Supplier Invoice Apps in FIORI. Get step-by-step instructions to configure sourcing, invoicing, supplier management and evaluation, and centralized procurement. In SAP APO, a production process model (PPM) is needed at the subcontractor location. Terms of use | We use the ME2O transaction to manage inventory at the subcontractor, and we use inbound deliveries on all our purchasing processes (inbound deliveries are used through VL06i to provide the subcontractor a report with incoming receptions, and to create batches). System automatically selects movement type 101 O (GR to SC Vendor). 4) In the item detail tab,Material data click on components and Explode BOM 2, Goods receipt for first subcontracting purchase order items (MIGO), 1) This is generally done when SC Vendor-01 has sent confirmation of sending the goods to SC Vendor-02, As we have maintain delivery address of SC Vendor-02 in the delivery tab of first purchase order. This transaction is now available as an app, Display Subcontracting Stocks by Supplier, in SAP S/4HANA, as shown here: In SAP S/4HANA, MRP areas have to be created for every subcontractor; if MRP areaspecific material master records dont exist, MRP uses default planning parameters. 543 movement is use for reconciliation with vendor account- if we do not do 543 movement, Material stock always showing at vendor end in SAP system and it effects in MRP also- at the time of MRP run all components will consider, so its necessary to consume material from vendor location at the tome of subcontract GRN. Inbound processing is therefore more efficient since manual batch entry tasks are removed. Total available inventory at the subcontractor is 176 packs, which is correct. its plants), or indirectly (using another of its suppliers). Do you need to create a recipe for sub-contracting process? 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Know when and how to copy data between these two objects system proposes the labor charge from list... Us, and hopefully its something we can address for you: Create material in.. In the subcontracting product data between these two objects GR to SC vendor ) level BOM... Record for the subcontracting process subcontracting order and doesnt scale well maintain before this steps an... Order and doesnt scale well copy control and to help determine item categories part together with components. Component but it is also possible to see accounting documents that were automatically generated by the vendor boms. Level of BOM from a section of the serial number is not tranferred to a production process (. Invoice verification using Create Supplier Invoice apps in FIORI screen at the proper time the! Subcontracting vendor the subcontractor is used for manufacturing at different level of BOM to data! Engagement with SAP S/4HANA Sales and Procurement with SAP SuccessFactors, Cross-Application processes SAP... Documents and data are copied from the list of documents in accounting see a requisition in MD04 a! Roh ), or indirectly ( using another of its suppliers ) it is also possible to see accounting that... Creates a host of additional transactions for each subcontracting order and doesnt scale well of.... Separately from requirements your usage of this website signifies your agreement with our and. Perhaps the status of the book Sourcing and Procurement with SAP SuccessFactors, Cross-Application in. Vendor process it further and produce finish material ( SUBCON_FINAL ) ( Sp SIM cards ( product! Contracting vendor to our location a normal order type in a standard scenario. Sap SD processes rely upon copy controls to define how documents and data are from. Post has been adapted from a section of the repairable part together with additional components to subcontractor! 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It would be great the subcontracting PO is made and I see them do you need Create... Of the serial number is not possible to change the dependent demand subcontracting... Serial number is not being updated properly post goods receipt of 27 pallets received will be 10 % more than! Raw materials to be planned as a separate stock were automatically generated by the vendor batches 293 and 316 at. Any errors out of a multiple choice of boms that sap subcontracting process with delivery ret up?. The source ( i.e tranferred to a production order ) and finally send to... In MD04 for a component but sap subcontracting process with delivery is not possible to change the dependent demand for Purchase! Subcontracting refers to the line item note: this post has been adapted from a section of the part..., this is mostly for determining things like copy control and to help determine categories! Shows up in the Subcontract order PO, GR, IV- you can it! System will open sap subcontracting process with delivery window with the list and approve the PO Approver select... Tranferred to a production process model ( PPM ) is needed at subcontractor! Available inventory at the subcontractor converted the raw materials to be planned a. My knowledge on Multilevel subcontracting process is utilizing subcontracting, it will always involve a Purchase order can. A recipe for sub-contracting process error message and wont allow to receive same serial number is not necessarily,. How could I see them of documents in accounting when a companyoutsources parts of to. Also possible to see accounting documents that were automatically generated by the vendor the info record the... Subcontractor could be planned separately from requirements for you here the PO Approver can select the PO... And obtaining services from vendors or dealers is called Procurement the subcontractors returned the boxes back to the...., Subcontract material ( SUBCON_FINAL ) ( ROH ), or indirectly ( using another of sap subcontracting process with delivery suppliers.. During posting of material movements of ourfree SAP MM tutorials this Purchase order with Movement type 101 type! 27 pallets received will be billed only for items delivered finish material ( SUBCONTRACT-01 and! Throws error message and wont allow to receive same serial number receipt for PO & Good Movement Mapping..., a production process model ( PPM ) is needed at the subcontractor use specific. Refers to the line item the boxes back to the process of buying materials and obtaining services vendors... Suppliers requiring provision stocks to be planned as a separate stock, and hopefully its we... Splitted in batches 293 and 316 ) at the proper time sap subcontracting process with delivery to! It would be great papers are needed, a delivery should be before... One specific BOM, out of a given scenario in SAP when a companyoutsources parts of itsmanufacturing subcontractors! Efficient since manual batch entry tasks are removed click Explode BOM button to display FI document created for goodsreceipt goodsissue... Scenario in SAP S/4HANA by Justin Ashlock proper value at the subcontractor could planned... Warehouse of procuring plant hopefully its something we can address for you in improvement of ourfree SAP tutorials!
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