2.Maintain the BOM for the material. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. its plants), or indirectly (using another of its suppliers). ME2O after purchasing and before inbound delivery creation. Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. 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. For the MRP to pick up the subcontracting order correctly, you must maintain a subcontracting entry for the associated material in its MRP area assignment, an MRP-relevant source of supply/quota agreement with the subcontracting setting (again, source lists are not supported in SAP S/4HANA before version 1709 for MRP, so you would need to use a quota agreement as a workaround in these versions), and a BOM containing the components. Make sure to implement the note 1397948 - Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1 if you work with subcontracting components in DESADV IDocs. I've just check that serial numbers are visible in the IDoc structure on both levels: But I don't have ready made examples. For each transaction requiring subcontracting, you then have to issue a PO and create multiple goods movements and accounting entries internally to support the process. Create/Change/Display/manage/ My Purchase requisitions App Unplanned component which is directly consumed but not available in PO BOM list. Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). Its being processed by subcontracting vendor, convert it to semi-finish material and deliver back. Posting Invoice verification using Create Supplier Invoice Apps in FIORI. Your email address will not be published. Very easy to understand now. Vendor shall process the item / use the item provided & supply the final item. You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 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. in the case of not providing components but still wanting to value the finished goods at std including inbound freight? Executing an intercompany sales process. Read on for more about the SAP Subcontracting PO Delivery Setup. Subcontracting in SAP APO is modeled with the help of two orders. Great blog. How to Repackage a Transport Request (TR) in SAP? The vendor charges for his or her service. 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.. In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. Legal Disclosure | Subcontracting is one of the procurement processes available in MM. Some components also come from our warehouses. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. When we hire -SUBCONTRACT-01(HALB) (Sp. Here we can see the FG and related Raw Materials. You can return it partially or full using a Purchase Order or not. Visit SAP Support Portal's SAP Notes and KBA Search. We will do our best to consider your request. Create Subcontracting vendor in FIORI. Nice explanation, Can you please explain the scenario of Over and Underconsumption of the Materials in case of Subcontracting with relevant screenshots. In SAP, subcontracting is a sub-process within the MM Purchasing module and it almost always involves the delivery of goods from inventory to the vendor. 2. Eventually, that difference will reach the cost of goods sold and will hurt your profit margin. If you elected to plan without MRP areas, you werent able to use the full functionality around lot sizing and were only able to order full lot sizes. 1) Post Goods Issue according to the Purchase Order number (4500000863) above. SAP Steps: 1.Create the finished goods material code. Subsequently, the IDoc inbound scenario DESADV / DELVRY07 was enhanced to support subcontracting components in inbound deliveries communicated electronically the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1, The problem with the above solution is that subcontracting components quantities transferred with DESADV / DELVRY07 message get fixed in the inbound delivery. 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. Use transaction MIGO to provide components to the subcontractor. Im not sure if theres actually much to look at in the setup of this Sales Document Type. Partial delivery to subcontractor is possible. 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. could you please add by product and co product scenarios in subcontracting process, If subcontractor not consumed all the components/ who need more subcomponents against same order , then how to issue additional components Another example of the subcontracting process in SAP is whena company provided raw sims and packaging materials to a subcontractor. Help. Please keep posting the knowledge. 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. When the subcontractor receives the raw SIM cards at his premises, he will inform the client and a goods receipt will be posted with reference to the purchase order increasing the subcontractor stock in the system. Then, expertly run your system after go-live with predictive analysis and machine learning. Make a request for us to schedule training around what works for you? To upgrade MRP subcontracting processes in SAP ERP to SAP S/4HANA, you need to take stock of your existing subcontracting suppliers and processes and identify any gaps, execute a standard upgrade to SAP S/4HANA, and then at post-processing proceed as follows: The standard subcontracting process in SAP entails a leap of faith to a degree, which some MRP controllers and their ilk are unwilling to make. Our issue is that when creating an inbound delivery on the purchase order to be delivered to the subcontractor, quantity to be delivered "disappears" from the ME2O report. Display Material document App A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Standard Process Flow ME21N - Purchase order creation MIGO_TR - Send components to a subcontractor Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. On the start screen of MIROchoose Invoicetransaction, enterInvoice Date and Purchase Order number and click Enter on the keyboard. The system proposes the labor charge from the info record for the subcontracting product. Delivery). Once PR is approved by Purchasing department top level authority. Creating Bill of Material for Subcontracting in FIORI. 6.MIRO to account for vendor's invoice for the service charge& material used by him. 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. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. Thanks a lot. How to edit personnel no. Can we have subcontracting order without BOM/Components. To illustrate with an example, your company manufactures lenses. 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. This is a concern to us as ME2O is used as a cockpit to manage transfers and/or external purchasing for components and we need to have accurate information on stock levels any time in the process. PR creation through FIORI Apps- Create PR apps. Have you had to do much with your default SAP STO Delivery Setup configuration? But SAP does not give here any flexibility. However, with SAP S/4HANA, a subcontracting MRP area is the default option for subcontracting planning. Conclusion:This article explained the process scenario of Multilevel Subcontracting Process in SAP Procurement. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. My question is , already we issued raw materials to vendor with 541 Movement type, why again 543? You need at least three confirmed participants to register and SAP will add it to your schedule. Finally, it is necessary to click Post button to save the document. As subcontracting Process everybody knows and it is not a new topic.. It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. 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). if yes do you have example idoc. Proc 30). 5 * Rating. Material document posted and stock is placed in our location. In MIGO, you need to choose Goods Receipt against Purchase Orderwith movement type 101 as shown below. The shipments are made against the open qty through the SC requirements, unless someone knows of another method to ship that links the delivery to the SubCon PO. Next, click OK checkboxes as shown below. This approach requires more manual effort and accounting acrobatics than is optimal. Account Assignment and Item Category are usually blank in a subcontracting PO. If the material is managed with batches, a batch number will be shown as well. Can I do transfer posting the material to vendor before rise the subcontracting Po. if they are ok with the PO then they can approve it else deny the PO. Vendor Subcontracting Process, Accounting, and Demo on SAP S4HANA Abdullah Galal - SAP, CMA 46.5K subscribers Join Subscribe 510 Share Save 19K views 2 years ago PARIS What's the meaning of. This tutorial will provide detailed guidance about working with subcontracting in SAP ERP system. 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. I'm a career-long IT specialist with a focus on SAP for over 18 years. If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. System automatically selects movement type 101 O (GR to SC Vendor). For a premium experience please use an alternative browser. The components are posted to the stock of materials provided to the vendor. 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. If the missing 3 pallets are stolen or lost during transportation that might be ok. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. Adding this value will open up the Components button located on the item Material Datatab. How do we determine and get the alternate BOM2 in subcontracting PO creation level? The components are then supplied to the vendor. If possible, please mentioned any background configuration need to be maintain before this steps. Your email address will not be published. Total available inventory at the subcontractor is 176 packs, which is correct. 3.Create PO with item category as "L" . Thanks for reading. We are currently setting up the subcontracting process in our SAP system. If the components for the finished product are to be provided by another supplier, you can plan as follows: Subcontracting with Third-Party Provision of Components in PP/DS, Subcontracting with Third-Party Provision of Components in SNP. 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. no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. Analytical apps related to PR, PO, GR, IV- You create a delivery for the lenses to be shipped to your vendor. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. If you are newly implementing subcontracting with PP/DS or SNP heuristics in SAP SCM 410, we recommend using the production data structure instead of the production process model. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. 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