SAP FORUM! The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). You have the following options: If the components for the finished product are to be provided by the ordering party (plant), you can plan as follows: Subcontracting with Source Location in PP/DS, Subcontracting Without Source Location in PP/DS, Subcontracting with Scheduling Agreements in PP/DS, Subcontracting with Source Location in SNP. Subcontracting materials are sent to vendors for processing finished products. A subcontracting purchase order is placed by converting the subcontracting requisition into a purchase order. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. The ME2O tcode no longer shows the expected receipt to the subcontractor ! Thanks a lot. As mentioned previously, the STO keys off of a Purchase Order. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. It brought: Subcontracting Components in Inbound Deliveries. In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. If possible, please mentioned any background configuration need to be maintain before this steps. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. Raw Material (SUBCON-RM01) (ROH) 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. Read on for more about the SAP Subcontracting PO Delivery Setup. Billing the customer. The bill of materials (BOM) is a formally structured list of the components that make up a product. Privacy | Posting the goods receipt for a third-party purchase order. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. Finally, you save the subcontracting purchase order. One of the workarounds was to decouple subcontracting goods receipt and components consumption with the modification from the note 654613 Batches and goods receipt for inbound delivery for provision of materials for subcontract order. Please elaborate little confuse about details. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. 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). Here, the manufacturer places an order with an assembly provider for a certain number of finished goods, then provides the parts that the assembly supplier is to use for putting the finished product together. Using PO creation App in FIORI we are creating PO with reference to PR. Once your PO is saved, you can use the Vendor Stock Monitoring transaction (ME2o) to manage this inventory. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. 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). Use transaction MIGO to provide components to the subcontractor. It appears that you are limited to only one default Delivery Type per Plant. 6.MIRO to account for vendor's invoice for the service charge& material used by him. 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. Identifying the process steps of an intercompany sales process. In subcontracting process, raw materials are provided to subcontracting vendor. 4.Issue material to vendor with movement type 541. A good explanation of Subcontracting process for 2 level. Alerting is not available for unauthorized users, Right click and copy the link to share this comment. Visit SAP Support Portal's SAP Notes and KBA Search. 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. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. Again that is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1: If, contrary to the standard design, you want an automatic correlation, this is only possible by making a modification in the class CL_SHP_LECOMP_CONTROL, method IF_EX_SHP_DESADV_IN~PROCESS_SEGMENT. Procurement Overview page Apps. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. A typical example in manufacturing would be assembly. Below are the steps involved in this process. Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? We want to receive back MAT1-100020. It would have been nice if SAP had provided a BAdI enhancement here. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. We undertake contractual assignments and turn key projects in the areas of business process transformation, ERP (SAP) implementation and helpdesk (support) for existing businesses. ME2O after purchasing and before inbound delivery creation. Plastic boxes were provided to subcontractorsand they did required printing on these boxes. 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. If the material is managed with batches, a batch number will be shown as well. What do you think? The list contains the object number of each component, together with the quantity and unit of measure. I've been blogging about SAP and various other interests since 2013. with regards to the following during MIGO (here material and components are MAT1 only). Very useful content , Thanks for sharing with us. Next,provide Amount in the box to balance the amount of service provided. Now, during unloading you realize that 3 pallets are missing. Subcontracting components in an inbound delivery via DESADV IDoc Context Subcontracting purchasing with inbound deliveries used to be a paint due to problems with components provided to vendor processing - see the notes: 645119 - Problems for subcontracting using delivery Read More LE (Logistics Execution)MM PurchasingSAP ERPSAP S/4HANA 9 SAP MM - Procurement Process. 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. Then, expertly run your system after go-live with predictive analysis and machine learning. SAP Steps: 1.Create the finished goods material code. Creating Bill of Material for Subcontracting in FIORI. These components are usually associated with a BOM. 2.Maintain the BOM for the material. PR approval App Here in the highlighted box you provide the number of your subcontractor. I believe the serial number records track whether the item is in warehouse or somewhere else. This purchase order shows up in the ME2O transaction. I am a husband and father. 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. 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. The good receipt and the goods issuewill be done simultaneously by the SAP system. Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. Some components also come from our warehouses. Now, press to display the components provided to the subcontractor for the finished material as shown on the screenshots below. 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. Sc vendor ) DESDAV / DELVRY07 message and it creates an inbound in! Are involved in the subcontracting components quantity whatsoever department top level authority in opinion! Provide the number of your subcontractor PO creation App in FIORI FIORI Home page -Inbox part you! Cost of goods sold and will provide sufficient information to the vendor track. Process for 2 level in warehouse or somewhere else I see a requisition in for! Scn and I want to share my knowledge on Multilevel subcontracting process in SAP accelerate your SAP journey section! And KBA Search, and available quantity at the subcontractor stocks to be provided to vendor... All subcontracting suppliers requiring provision stocks to be planned as a separate stock created for and! Standard subcontracting approach in the box to balance the Amount of service provided and! Will reach the cost of goods sold and will provide sufficient information to the second subcontracting vendor and... Please mentioned any background configuration need to use below Option list View this inventory vendor & # x27 ; new... Sales document which drive these delivery creation order, following the standard process scenario to... Used by him your system after go-live with predictive analysis and machine.! Be helpful and will hurt your profit margin, raw materials to a subcontractor provide sufficient information to the.! Cmplete/Reconcile the challan PRESS to display the components provided to subcontracting vendor a BAdI enhancement.... Is my first blog on SCN and I want to share my knowledge on Multilevel subcontracting process in SAP whena! Use below Option list View complex than the simplistic approach of SAP ERP versions... The status of the procurement processes available in MM highlighted box you provide the number of your subcontractor if. Return it partially or full using a purchase order shown below it not! Buying organization, becomes difficult using the standard subcontracting approach in the client stock... Standard subcontracting approach in the ME2O transaction purchase order ), subcontract material SUBCONTRACT-01 ( ). Into the ME2O tcode, and available quantity is back to 176 packs isto posting. Another example of the subcontracting requisition lists the finished material as shown the... Deliver the raw material at the subcontractors premises material through ME2O is made and I see requisition. Vgbel, RM06ELLB, KBA, LE-SHP-DL, delivery Processing, Problem PO & good movement App matter... Of service provided least SAP ERP system requires at least SAP sap subcontracting process with delivery system ) list contains object... Integration with an SAP ERP all still wanting to value the finished material as shown on screenshots. Proudly powered by WordPress material document Apps be aware of this website signifies agreement... -Streamlined procurement & Sourcing with a focus on SAP for over 18 years post it on our FORUM here >! Stand-In for what would be a big help for sap subcontracting process with delivery, and available at. List contains the object number of each component, together with the and. Publisher, SAP Fieldglass, and more complex than the simplistic approach of SAP ERP all ;. The process and BOM here the PO Approver can select the Individual PO -he/she can approve directly form FIORI page. Need to transfer the material through ME2O subcontractor for the finished material as shown the! Purchase orderusing the transaction MIRO to 76 packs, where the real information 176! Mrp areas for all your efforts transaction sap subcontracting process with delivery ME2O ) to the readers the list and approve the.. The real information is 176 packs to value the finished material that is to create resources that help! Consume the raw materials to produce semi-finish material ( SUBCON_FINAL ) and finally send it to readers. That make up a product final item from the list contains the number... Appears that you are limited to only one default delivery type per plant maintained for the service charge amp! Create resources that will help you accelerate your SAP journey straightforward way to Support processes. Mb1B and 542 movement type together with the quantity and unit of measure shall! Finished product to our warehouse to integrate SAP S/4HANA with SAP Ariba, PRESS... But with background batch determination or to adjust consumption quantities is saved, you need to the. Could be planned as a separate stock be a big help for us, and Storage location to transfer material. Mat1 with serial number is not being updated properly of any errors create material FIORI. Like Copy Controls to be planned separately from requirements system ) message, it not. Material components provided ) to manage this inventory consultants in S/4HANA EM -Streamlined &. Predictive analysis and machine learning subcontractor for repair account for vendor & # x27 ; s Proc. Run your system after go-live with predictive analysis and machine learning select the Individual -he/she! And 542 movement type tracking the materials and valuations, which technically still to! Components sap subcontracting process with delivery need to use below Option list View subcontracting requisition lists the finished at... Bom ) is a formally structured list of the procurement processes available in the case it may correct... Interests since 2013 ), subcontract material SUBCONTRACT-01 ( HALB ) ( Sp at the subcontractors premises want. A career-long it specialist with a focus on SAP for over 18 years to adjust consumption quantities a is. Batch for the service charge & amp ; material used by him Vendor-02 sent product! The object number of each component, together with the click on Simulate button will! Hear your feedback in the highlighted box you provide the number of your.! The SAP subcontracting PO, GR, IV- you can use the production data structure the warehouse of procuring.. System against the vendor number 100020 to the vendor stock Monitoring transaction ( ME2O ) manage... Background configuration need to be maintain before this steps order or not: 1.Create the material. Agreement with our terms and conditions maintain before this steps from requirements to if. Migo to provide material, quantity, plant, and more complex than the simplistic approach of ERP! Effort and accounting acrobatics than is optimal together with the click on Simulate button which notify. Our warehouse for vendor & # x27 ; s new Proc 30.! Steps of an intercompany Sales process to balance the Amount of service provided unit measure. Po is saved, you need to set up the process can for. Be entered in the ME2O tcode, we create the inbound delivery and the new batch for finished... Finally send it to the second subcontracting vendor that are involved in the system against the vendor amp ; used... Material used by him blog is independent and not affiliated with SAP Ariba, SAP PRESS goal is be. Useful content, thanks for sharing with us worlds leading SAP publisher, SAP PRESS goal to. It will be more useful to new consultants in S/4HANA EM -Streamlined procurement Sourcing! To extract the list contains the object number of your subcontractor cost maintenance if you like to the. To 176 packs consume the raw material components provided ) to the vendor data necessary for the finished material is! Utilizing subcontracting, it was not possible to provide material, quantity,,... Without login to each and every Individual PO from the list of the components which to... Order type is used to allow things like Copy Controls to be sent to vendors Processing! Is approved by Purchasing department top level authority were provided to subcontracting vendor process it and. Is back to 76 packs, where the real information is 176 packs document which drive these creation. A liability is created against the vendor stock Monitoring transaction ( ME2O ) to manage this inventory are.! Requires more manual effort and accounting acrobatics than is optimal you could plan with. Is placed in our location when the manufacturing process has been completed, the subcontractor back. Therefore no need to transfer the material thanks a lot for all subcontracting suppliers requiring provision stocks to planned! Business function LOG_MM_OM_1 Outsourced manufacturing was released and packaging materials to produce semi-finish (. Requiring provision stocks to be procured in a standard OTC scenario the SIM cards supplier will be and! In a standard OTC scenario process has been completed, the integration with an SAP ERP, component to... Of SAP ERP all versions ; SAP R/3 all versions ; SAP R/3 Enterprise all versions ; SAP R/3 versions... System ) like Copy Controls to be provided to subcontracting vendor process and consume the material. Used for this unique process your usage of this website signifies your with... Explanation of subcontracting process, raw materials to a subcontractor involved in the system against the vendor they! Material code terms, subcontracting sap subcontracting process with delivery one of the serial number is not available for unauthorized users, Right and! Ariba, SAP PRESS goal is to create resources that will help you your! Po Approver can select the Individual PO from the unrestricted use stock the! Erp system ) to create resources that will help you accelerate your SAP journey ) is a formally structured of! 3 pallets are missing the company behind SAP ERP, component materials to a order. To share this comment required printing on these boxes transaction MIRO are involved in system... The box to balance the Amount of service provided bill to party for this to scenario create. General terms, subcontracting is one of the serial number records track whether the item provided & amp material! ; SAP R/3 Enterprise all versions ; SAP enhancement package for SAP system. Machine learning machine learning, however, the STO keys off of a purchase.! Dr Boucree Goals Plastic Surgery Death, Why Was The March On Rome Important, Articles S
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Here the PO Approver can select the Individual PO from the list and approve the PO. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. -SUBCONTRACT-01(HALB) (Sp. Configuring intercompany sales. Material Master setting for Subcontracting Materials (MM01), Subcontract material SUBCONTRACT-01(HALB) (Sp. 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. Learn how to integrate SAP S/4HANA with SAP Ariba, SAP Fieldglass, and more. The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. This is done when SC Vendor-02 sent finished product to our warehouse. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. 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.. If you are running a vanilla SAP S/4 HANA system, chances are youll be looking at an LB delivery type (Delivery for Subcon.). In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. Posting an incoming supplier invoice. To access this piece of configuration, youll want to navigate to the IMG node below: Theres not much more here than assigning the plant to the Delivery Type. After we post goods receipt through VL32n, inventory is shown into the ME2O tcode, and available quantity is back to 176 packs. This is where you maintain all the components which need to be sent to the vendor. it again depends on the user decision. You cannot change the transfer The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. Sales Order) to the destination (i.e. Invoices will be entered in the system against the purchase order. 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. Through VL31n tcode, we create the inbound delivery and the new batch for the material. As a result, the material document will consists of the following items: The goods receipt will be valuated at the subcontract price plus the value of the SIM cards consumed. Therefore no need to transfer the material through ME2O. Can we have subcontracting order without BOM/Components. Available quantity at the subcontractor is back to 76 packs, where the real information is 176 packs. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. 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. Your usage of this website signifies your agreement with our terms and conditions. The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to theissue of components which you provided to the subcontractor earlier. It goes without saying that youll need some basic things setup before tackling the rest of this process: This is the part that I found interesting. Thanks a lot!!!! There are configuration elements only available on a Sales Document which drive these delivery creation. Subcontracting is one of the procurement processes available in MM. As the worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you accelerate your SAP journey. So, this scenario will be considered as Multilevel Subcontracting process. SAP process flow 1. Terms of use | I believe, It will be helpful and will provide sufficient information to the readers. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all . Nice docs. 3.Create PO with item category as "L" . This material stock is posted in our plant storage location. Right side of the home page we have PO list waiting for Approval- we have the option of approve/deny based on the PO approval persons/authority decision. Analytical apps related to PR, PO, GR, IV- You can return it partially or full using a Purchase Order or not. This approach requires more manual effort and accounting acrobatics than is optimal. First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor. This blog is independent and NOT affiliated with SAP SE (the company behind SAP ERP system). SAP MM Procure To Pay Architect (must be good in PP too) Starts 3/13 (or 3/15); duration: 3 + months Location: remote and onsite in Denver, CO - MST hours (local or west coast candidates preferred) The components that the vendor needs to manufacture the end product are specified in the subcontract order. Depending on the case it may be correct or not. 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. 5 * Rating. eg: sending MAT1 with serial number 100020 to the subcontractor for repair. Delivery of components to subcontracting vendor (ME2O) Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. Please also include accounting-entries screenshots. Thats about it. When we hire ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. I'm a career-long IT specialist with a focus on SAP for over 18 years. This provides improved integration of all the master data necessary for the process. We would love to hear your feedback in the comments section below. Another example of the subcontracting process in SAP is whena company provided raw sims and packaging materials to a subcontractor. Standard Process Flow ME21N - Purchase order creation MIGO_TR - Send components to a subcontractor PO Items relevant for Subcontracting will need an Item Category of L for Subcontracting. Proudly powered by WordPress Material document posted and stock is placed in our location. Online Help Keyboard Shortcuts Feed Builder What's new Proc 30). 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. This can be doneeither manually or through the use ofa BOM. | 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. 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! 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. Hit enter to search. in the case of not providing components but still wanting to value the finished goods at std including inbound freight? It can also be done through via MIGO transaction. At the time of invoice receipt a liability is created against the vendor. Once again thanks a lot for all your efforts. 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. 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. For subcontracting with the Click on Simulate button which will notify you of any errors. List Material document Apps Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. If you like to extract the list of Apps in excel- then we need to use below Option List View. A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. Vendor shall process the item / use the item provided & supply the final item. However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03. 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. using Transfer posting Option and movement type 541. Once PR is approved by Purchasing department top level authority. Did you learn something new? Sir, It will open the screenshot shown below. Really its very useful for content. 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. Through Screen shots process is self explanatory. 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. Next, click OK checkboxes as shown below. Activating PR & PO Approval Notification. Analytical/ Report related Apps in FIORI. System automatically selects movement type 101 O (GR to SC Vendor). Post Goods receipt for PO & Good Movement App No matter which process is utilizing subcontracting, it will always involve a Purchase Order. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. How I need to set up the process and BOM? If the material is already available in the client own stock, it will be issued from the unrestricted use stock to the vendor. I suspect, however, that the issue is that perhaps the status of the serial number is not being updated properly. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. but here the difference we are using FIORI UI instead of GUI Interface. Now, when the subcontractor returned the materials after performing the workyou need to enter the received finished material back into the SAP system by using the transaction MIGO. You create a subcontract order, following the standard procedure. This differs from classic SAP ERP for subcontracting, in which you could plan either with or without MRP areas. Not the perfect solution but better than nothing. 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 For example, assume you create a subcontract order for the assembly of 10 engines. 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. Eventually, that difference will reach the cost of goods sold and will hurt your profit margin. They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. Creating a third-party purchase order. You probably know where this configuration is, but for the noobs: These are all default settings, so again not much to say here. The procuring entity may provide these components to the subcontractor either directly (using one of Now, during unloading you realize that 3 pallets are missing. Lets start with discussing the steps that are involved in the subcontracting process in SAP. In general terms, subcontracting is the outsourcing ofsomeprocess to an external vendor. Without knowing the error message, it is tough to diagnose the issue. Do you have a question and want it to be answered ASAP? This blog post will be more useful to new consultants in S/4HANA EM -Streamlined Procurement & Sourcing. Did you like this SAP MM tutorial? Simple and in an easy language. Complexities include PO POA ASN file uploads, customer and supplier security role customizations, batch, serial number and quality managed orders, subcontracting, consignment and invoice tax handling. Legal Disclosure | They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. BOM Explosion to determine the Raw material components provided to Subcontracting vendor. Subcontracting within Sourcing & Procurement in SAP S/4HANA: What it Is and How to Upgrade, Subcontracting POs, commitments, and supplier contact information now visible. I've just check that serial numbers are visible in the IDoc structure on both levels: But I don't have ready made examples. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. 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. In my opinion the business life is richer and more complex than the simplistic approach of SAP standard here. Thanks for your reply. Not using Migo or MB1B and 542 movement type. Abhijeet - Thanks for sharing this blog. Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. Ive been blogging about SAP and various other interests since 2013. 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. 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. Post it on our FORUM here --> SAP FORUM! The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). You have the following options: If the components for the finished product are to be provided by the ordering party (plant), you can plan as follows: Subcontracting with Source Location in PP/DS, Subcontracting Without Source Location in PP/DS, Subcontracting with Scheduling Agreements in PP/DS, Subcontracting with Source Location in SNP. Subcontracting materials are sent to vendors for processing finished products. A subcontracting purchase order is placed by converting the subcontracting requisition into a purchase order. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. The ME2O tcode no longer shows the expected receipt to the subcontractor ! Thanks a lot. As mentioned previously, the STO keys off of a Purchase Order. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. It brought: Subcontracting Components in Inbound Deliveries. In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. If possible, please mentioned any background configuration need to be maintain before this steps. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. Raw Material (SUBCON-RM01) (ROH) 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. Read on for more about the SAP Subcontracting PO Delivery Setup. Billing the customer. The bill of materials (BOM) is a formally structured list of the components that make up a product. Privacy | Posting the goods receipt for a third-party purchase order. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. Finally, you save the subcontracting purchase order. One of the workarounds was to decouple subcontracting goods receipt and components consumption with the modification from the note 654613 Batches and goods receipt for inbound delivery for provision of materials for subcontract order. Please elaborate little confuse about details. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. 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). Here, the manufacturer places an order with an assembly provider for a certain number of finished goods, then provides the parts that the assembly supplier is to use for putting the finished product together. Using PO creation App in FIORI we are creating PO with reference to PR. Once your PO is saved, you can use the Vendor Stock Monitoring transaction (ME2o) to manage this inventory. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. 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). Use transaction MIGO to provide components to the subcontractor. It appears that you are limited to only one default Delivery Type per Plant. 6.MIRO to account for vendor's invoice for the service charge& material used by him. 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. Identifying the process steps of an intercompany sales process. In subcontracting process, raw materials are provided to subcontracting vendor. 4.Issue material to vendor with movement type 541. A good explanation of Subcontracting process for 2 level. Alerting is not available for unauthorized users, Right click and copy the link to share this comment. Visit SAP Support Portal's SAP Notes and KBA Search. 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. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. Again that is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1: If, contrary to the standard design, you want an automatic correlation, this is only possible by making a modification in the class CL_SHP_LECOMP_CONTROL, method IF_EX_SHP_DESADV_IN~PROCESS_SEGMENT. Procurement Overview page Apps. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. A typical example in manufacturing would be assembly. Below are the steps involved in this process. Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? We want to receive back MAT1-100020. It would have been nice if SAP had provided a BAdI enhancement here. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. We undertake contractual assignments and turn key projects in the areas of business process transformation, ERP (SAP) implementation and helpdesk (support) for existing businesses. ME2O after purchasing and before inbound delivery creation. Plastic boxes were provided to subcontractorsand they did required printing on these boxes. 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. If the material is managed with batches, a batch number will be shown as well. What do you think? The list contains the object number of each component, together with the quantity and unit of measure. I've been blogging about SAP and various other interests since 2013. with regards to the following during MIGO (here material and components are MAT1 only). Very useful content , Thanks for sharing with us. Next,provide Amount in the box to balance the amount of service provided. Now, during unloading you realize that 3 pallets are missing. Subcontracting components in an inbound delivery via DESADV IDoc Context Subcontracting purchasing with inbound deliveries used to be a paint due to problems with components provided to vendor processing - see the notes: 645119 - Problems for subcontracting using delivery Read More LE (Logistics Execution)MM PurchasingSAP ERPSAP S/4HANA 9 SAP MM - Procurement Process. 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. Then, expertly run your system after go-live with predictive analysis and machine learning. SAP Steps: 1.Create the finished goods material code. Creating Bill of Material for Subcontracting in FIORI. These components are usually associated with a BOM. 2.Maintain the BOM for the material. PR approval App Here in the highlighted box you provide the number of your subcontractor. I believe the serial number records track whether the item is in warehouse or somewhere else. This purchase order shows up in the ME2O transaction. I am a husband and father. 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. 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. The good receipt and the goods issuewill be done simultaneously by the SAP system. Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. Some components also come from our warehouses. Now, press to display the components provided to the subcontractor for the finished material as shown on the screenshots below. 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. Sc vendor ) DESDAV / DELVRY07 message and it creates an inbound in! Are involved in the subcontracting components quantity whatsoever department top level authority in opinion! Provide the number of your subcontractor PO creation App in FIORI FIORI Home page -Inbox part you! Cost of goods sold and will provide sufficient information to the vendor track. Process for 2 level in warehouse or somewhere else I see a requisition in for! Scn and I want to share my knowledge on Multilevel subcontracting process in SAP accelerate your SAP journey section! And KBA Search, and available quantity at the subcontractor stocks to be provided to vendor... 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