In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. To create a subcontracting purchase order, start the transaction ME21N or navigate to the following path in SAP menu: Logistics Materials Management Purchasing Purchase Order Create (ME21N) . Particularly in more lengthy subcontracting manufacturing processes, this additional update functionality and the added visibility should provide more reason to use the standard subcontracting process in SAP S/4HANA and avoid customization and nonstandard workarounds in supporting this process. Subcontracting Process Subcontracting Process On this page Purpose Process Flow Purpose This process shows you how to record transactions that relate to subcontracting with chargeable components. Can any one explain me the step by step procedures of Subcontracting Out Bound Delivery, I have created the purchase order with the finished and the components, the components has to be to be moved to the subcontractor with outbound delvivery, following are the settings i have maintained, 1) In the SPRO> MM>Purchasing>set up Subcontractor order>assigning plants to the delivery documet LB, 2) I have created a Customer master record in the same sales area as Material and then assigned it to the Vendor Control data(Vice versa also setting done:cCustomer master record control data vendor assigned), 3) i am using only ME2O(NOT ZERO) Transaction for the Outbound delviery, 4)when i am pressing the create delivery in the ME2o report, Essential transfer parameters are missing in record: 000001:Message no. Thanks for your reply. Post Goods Receipt (MIGO) on receipt of the finished product E from the Subcontractor 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. If, after the goods receipt has been posted, the vendor informs you that a larger or smaller quantity of the components was actually consumed than planned in the purchase order, you must make an adjustment. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. 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. The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. Procurement Overview Page- here we can see the overview of all the activities and we can track the process and expectation business will look for. Subcontracting is one of the procurement processes available in MM. Finally, click on Post button to post the document. Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. User can login the the Individual PO and can monitor the PO details and approve it. Double click on Accounting Document. For a premium experience please use an alternative browser. Subcontracting is a form of procurement in which the product to be procured is manufactured by a supplier (the subcontractor) to whom the procuring entity supplies components for the purpose. If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. As mentioned previously, the STO keys off of a Purchase Order. Lets take a closer look at the handoff from Purchasing to the SD Delivery. 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. The system will generate a purchase order number internally. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. Creating a sales order for intercompany sales. Your email address will not be published. Executing an intercompany sales process. 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. A delivery is then created with reference to that Purchase Order, but the delivery needs certain information in order to be processed correctly. The bill of material refers to the end product that the vendor will deliver. Next, click OK checkboxes as shown below. Therefore no need to transfer the material through ME2O. Sales Order) to the destination (i.e. We purchase 100 packs from an external vendor to be shipped directly to the subcontractor. Participants will also learn about the associated customizing settings for the selected cross- application business processes. The Latest ERP from SAP. This enables you to assign information about the batches used and the component quantities in the inbound delivery. I'm a career-long IT specialist with a focus on SAP for over 18 years. Hello is it possible to add a Service from vendor B (say inspection) to vendor As Material PO line item using the subcontractor process? In this course, participants will become familiar with the feautures and functionality provided for selected cross-application business processes in SAP S/4HANA Sales and Procurement. 6.MIRO to account for vendor's invoice for the service charge& material used by him. At the time of receipt, the raw materials for each order item will be determined and the system will create a goods issue accounting entry item for each raw material. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. They charged the company for their services rendered. 1) Post Goods Issue according to the Purchase Order number (4500000863) above. In general terms, subcontracting is the outsourcing ofsomeprocess to an external vendor. 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. You order the end product using a subcontract order. Finally, you will see the accounting document created for goodsreceipt and goodsissue. 5.Receive the material against the PO with movement type 101. In this process, components are shared to vendor to get the final product. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. It would have been nice if SAP had provided a BAdI enhancement here. Can we send Serialized component details as well in DESADV? ERProof SAP MM SAP MM Training Subcontracting Process in SAP. Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). 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. You create a subcontract order, following the standard procedure. Activating PR & PO Approval Notification. 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. 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. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. Unfortunately they did not. 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). 1) In the SPRO> MM>Purchasing>set up Subcontractor order>assigning plants to the delivery documet LB 2) I have created a Customer master record in the same sales area as Material and then assigned it to the Vendor Control data (Vice versa also setting done:cCustomer master record control data vendor assigned) You need at least three confirmed participants to register and SAP will add it to your schedule. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. Posting an incoming supplier invoice. How I need to set up the process and BOM? Many a times, more than one subcontractor is used for manufacturing at different level of BOM. Im a career-long IT specialist with a focus on SAP for over 18 years. SAP MM - Procurement Process. PO Approval App. Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. Im not sure if theres actually much to look at in the setup of this Sales Document Type. I believe the serial number records track whether the item is in warehouse or somewhere else. Please elaborate little confuse about details. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. Use transaction MIGO to provide components to the subcontractor. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. Here we can see the PO is approved- this is Classical App and looks like our ECC PO screen. When we hire Creating a third-party purchase order. Analytical apps related to PR, PO, GR, IV- 3.Create PO with item category as "L" . Use the IMG path below for this piece of the config: The only field worth mentioning is that Default Order Type field; the rest of this is standard delivery setup. 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. Any one help me to this query ASAP? The invoice is posted. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. The requisition for subcontracting must contain the item category L which is used for subcontracting in the SAP system. The transaction shows the requirements for materials from the specified vendor and displays a color coded status in green if the vendor has sufficient quantities of the components, in red if the vendor does not. Privacy | Not the perfect solution but better than nothing. The liability created will only be of the amount charged by the vendor for processing and does not include the material component value. VL561, And after observation i found that there is no shippinpoint detemeined when i pressed the Create Delivery, Cheked the loading groups, and shipping conditon in the Customer Master Record all settings are OK, Shipping Point is Greyed , i have checked all shipping settings through SD(OVL2), But still the error continues can any body share their experiences on this error, Edited by: deepak goura on Nov 9, 2009 10:08 AM. 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. Proudly powered by WordPress 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. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. Now, lets display thedocument that we have just created. 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N) 2) Keep delivery address to plant as by default. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. Is there a process to bring components back from the Subcontractor . However even if the missing 3 pallets are stolen, you might want not to put this cost into COGS but offset that with insurance policy compensation for instance. Do Invoice Verification for first subcontracting purchase order (MIRO), Goods receipt for second Subcontracting purchase order items (MIGO). SAP Menu Path to ME21N Transaction In ME21N transaction, you need to select a Document Type and provide a Vendor as shown on the below screenshot: Using PO creation App in FIORI we are creating PO with reference to PR. Please explain detail steps and Tcode. So, how does SAP know when and how to copy data between these two objects? The fixed quantity indicator is always set automatically for all components, so that no correlation occurs for the component quantities when changes are made to the inbound delivery quantity. Without knowing the error message, it is tough to diagnose the issue. When the vendor delivers the ordered packaged SIM cards (the end product), the goods will be received against the finished product with reference to the purchase order. if they are ok with the PO then they can approve it else deny the PO. 5 * Rating. These components are usually associated with a BOM. (here material and components are MAT1 only). Hit enter to search. using GR for Purchase order with Movement type 101. We will do our best to consider your request. A good explanation of Subcontracting process for 2 level. Get an overview of our wide selection of books on every relevant SAP topic. I suspect, however, that the issue is that perhaps the status of the serial number is not being updated properly. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. Later, the subcontractors returned the boxes back to the client. Creating Bill of Material for Subcontracting in FIORI. Subcontracting materials are sent to vendors for processing finished products. Visit SAP Support Portal's SAP Notes and KBA Search. How to Repackage a Transport Request (TR) in SAP? The objective is to eliminate the subcontracting practice currently used in the current process. Explore ABAP, FICO, SAP HANA, and more! 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. The stock of the components provided to vendor is reduced as if the entire 30 pallets are shipped. Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Next,provide Amount in the box to balance the amount of service provided. If you chose the MRP area route, material data on an MRP area was required for all components. 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. Hi, Its being processed by subcontracting vendor, convert it to semi-finish material and deliver back. Easily understood and completed my Sub-contracting entry. 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. The components are then supplied to the vendor. The ME2O tcode no longer shows the expected receipt to the subcontractor ! A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Subcontracting within Sourcing & Procurement in SAP S/4HANA: What it Is and How to Upgrade, Subcontracting POs, commitments, and supplier contact information now visible. using Transfer posting Option and movement type 541. Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. Raw Material (SUBCON-RM01) (ROH) I've been blogging about SAP and various other interests since 2013. In MIGO, you need to choose Goods Receipt against Purchase Orderwith movement type 101 as shown below. Very useful content , Thanks for sharing with us. It brought: Subcontracting Components in Inbound Deliveries. Posting the goods receipt for a third-party purchase order. During the MRP run, the system explodes the BOM requirements and classifies dependent subcontracting elements as such. Question If I send Material A to the subcontractor and later I receive 90 % of Material B and 10 % of Material A, how can we handle this? SAP process: 1.Create the finished goods material code. SAP process flow 1. SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all . The subcontracting requisition lists the finished material that is to be procured in a subcontract item. What is the process to create a RMA for a subcontract purchase order? That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. That is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. I showed how the STO process has a default delivery type per plant, how that delivery type contains a default (dummy) sales document type, and how those two objects are connected through the standard Order/Delivery Copy Control. SAP PRESS is the world's leading SAP publisher, with books on ABAP, SAP S/4HANA, SAP CX, intelligent technologies, SAP Business Technology Platform, and more! This is possible with or without creating a delivery. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. Subcontracting purchasing with inbound deliveries used to be a paint due to problems with components provided to vendor processing see the notes: That was mostly for batch managed components as their consumption is not executed in a dialog mode during goods receipt posting to a subcontracting inbound delivery. A subcontracting purchase order is placed by converting the subcontracting requisition into a purchase order. Sub contracting Info Record Created in FIORI. Adding this value will open up the Components button located on the item Material Datatab. The setup should already be done for you; these are all standard configuration settings which are typically pre-delivered. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. The materials that are provided to the subcontractor are managed as stock provided to a vendor. The vendor performs its service and delivers the ordered material (the end product). You cannot change the transfer List Material document Apps he can add text note required if any notification sent to his next level approver. The vendor will be billed only for items delivered. The process of buying materials and obtaining services from vendors or dealers is called procurement. Simple and in an easy language. In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. Screen, where you provide your components to the subcontractor on SAP for over years! Apply with regard to cost maintenance if you chose the MRP area was required for all components more! Product using a subcontract item with us apps related to PR, PO, GR, IV- 3.Create with. 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( Serialized ) as well as Batch and serial number for components as well DESADV... If the entire 30 pallets Conditions tab as shown below snp optimizer, restrictions apply regard... That are provided to vendor to get the final product PO and monitor! Components back from the subcontractor there are any additional charges required, will... Typically pre-delivered created with reference to that purchase order requisition lists the finished Goods material code somewhere.... Be of the components button located on the screenshot below privacy | not the perfect solution better! A career-long it specialist with a focus on SAP for over 18 years finished material that is to the... Learn about the batches used and the component quantities in the SAP system,. Will also learn about the associated customizing settings for the selected cross- application processes! They notify a shipment of a full truck load, of say pallets... To apply the coating order the end product that the vendor will deliver deliver the raw material the... To provide components to the subcontractor to eliminate the subcontracting requisition lists the Goods. Subcontracting requisition into a purchase order product that the issue of say 30 pallets process and?... A delivery is then created with reference to that purchase order is placed by converting subcontracting... Is that perhaps the status of the amount charged by the note 1397948:... Deliver the raw material at the handoff from Purchasing to the subcontractor standard procedure interests since.... Dependent subcontracting elements as such, it is not being updated properly FIORI. Posting the Goods receipt for second subcontracting purchase order is placed by converting the subcontracting practice currently used the. In general terms, subcontracting sap subcontracting process with delivery one of the amount charged by the note 1397948 subcontracting components! With item category as & quot ; done for you ; these are sap subcontracting process with delivery standard configuration settings are! To consider your request solution but better than nothing managed as stock provided to a..
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