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. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. 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. if yes do you have example idoc. In MIGO, you need to choose Goods Receipt against Purchase Orderwith movement type 101 as shown below. Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. 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. 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. This enables you to assign information about the batches used and the component quantities in the inbound delivery. I'm looking forward for the next ones , Thanks for sharing. Conclusion:This article explained the process scenario of Multilevel Subcontracting Process in SAP Procurement. Material document posted and stock is placed in our location. Please keep posting the knowledge. how do I make the subcontractor use one specific BOM, out of a multiple choice of boms that are ret up already? ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Process Flow. You order the end product using a subcontract 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. 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. To create a subcontracting purchase order, start the transaction ME21N or navigate to thefollowingpath in SAP menu:Logistics Materials Management Purchasing Purchase Order Create (ME21N). Using MIGO > Transfer Posting is just one way to ship materials to a subcontractor. This purchase order shows up in the ME2O transaction. he can add text note required if any notification sent to his next level approver. Unplanned component which is directly consumed but not available in PO BOM list. Terms of use | They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. Adding this value will open up the Components button located on the item Material Datatab. You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. Imagine the following, quite typical scenario. 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. I believe the serial number records track whether the item is in warehouse or somewhere else. 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) 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. SAP Ariba Supply Chain Collaboration for Buyers provides an extra layer of visibility that has been sought in the subcontracting process, including component receipt and consumption notices from the supplier, as well as full business-to-business-level manufacturing visibility into the suppliers progress. The objective is to eliminate the subcontracting practice currently used in the current process. eg: sending MAT1 with serial number 100020 to the subcontractor for repair. However, you need to provide to the vendor at least one component because otherwise it wont be subcontracting but simply a regular purchase order. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. The good receipt and the goods issue will be done simultaneously by the SAP system. 3.Create PO with item category as "L" . Very easy to understand now. The process uses what you could call a Dummy Sales Document Type. So, how does SAP know when and how to copy data between these two objects? Billing the customer. Depending on the case it may be correct or not. Subcontracting is one of the procurement processes available in MM. Subcontracting is a critical process for many organizations, and from an SD consultants perspective its quite unique. (here material and components are MAT1 only). using Transfer posting Option and movement type 541. 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. SAP process flow 1. Start it and selectDisplay against Material Documentwhile inputting thedocument number as shown below and click Enter. Sub contracting Info Record Created in FIORI. Hi, Can we have subcontracting order without BOM/Components. Now, press to display the components provided to the subcontractor for the finished material as shown on the screenshots below. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. Get an overview of our wide selection of books on every relevant SAP topic. Therefore no need to transfer the material through ME2O. In ME21N transaction, you need to select a Document Type and provide a Vendor as shown on the below screenshot: In the Item Overview screen, you need to use Item Category L which is used for subcontracting documents. The liability created will only be of the amount charged by the vendor for processing and does not include the material component value. The labor charge is JPY 2,000 per piece. 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). it again depends on the user decision. Am I right or wrong? 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. When delivery papers are needed, a delivery should be created. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. How to manage serialized material for subcontracting repair? It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. For example, you can choose to create plants that are technically the suppliers locations and track your inventory as you move it to these locations for finishing. Posting Transfer Posting stock from own stock to Sub contractor . Proc 30) It's a very good blog - thank you! This is possible with or without creating a delivery. Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? System throws error message and wont allow to receive same serial number. 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. Subcontracting materials are sent to vendors for processing finished products. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. I can not see the images Any idea why or how could I see them? Please let me know in the comments. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. Did you learn something new? When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. PR approval App What is the process to create a RMA for a subcontract purchase 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. Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Configuring intercompany sales. Can you let me know what are the default settings for the Availability check for Subcontracting POs? The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. Once your PO is saved, you can use the Vendor Stock Monitoring transaction (ME2o) to manage this inventory. Thanks a lot!!!! I hope this blog post will be more useful to logistics consultants to understand how FIORI UI will look like for Subcontracting Process. We are currently setting up the subcontracting process in our SAP system. Many a times, more than one subcontractor is used for manufacturing at different level of BOM. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. (ls_comp-fmeng = abap_true). They charged the company for their services rendered. 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N) 2) Keep delivery address to plant as by default. In my opinion the business life is richer and more complex than the simplistic approach of SAP standard here. Alerting is not available for unauthorized users, Right click and copy the link to share this comment. 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. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. Can you please explain about accounting entries in subcontracting? 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. The components are posted to the stock of materials provided to the vendor. To receive material against the purchase order, SIM cards and packaging materials need to be issued to the subcontractor. As mentioned previously, the STO keys off of a Purchase Order. Plastic boxes were provided to subcontractorsand they did required printing on these boxes. demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. Thanks a lot. 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: You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. The PPM consists of components and operations. You create a subcontract order, following the standard procedure. using GR for Purchase order with Movement type 101. Hit enter to search. 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 to receive additional components left after making finished product. Hello is it possible to add a Service from vendor B (say inspection) to vendor As Material PO line item using the subcontractor process? I found a solution for this as we have to select Subcontracting Type 1 at item level. Using PO creation App in FIORI we are creating PO with reference to PR. This is done when SC Vendor-02 sent finished product to our warehouse. 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. Create Supplier Invoice Apps or Incoming Invoice Apps. Lets take a closer look at the handoff from Purchasing to the SD Delivery. 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. Not using Migo or MB1B and 542 movement type. The problem we have is that we cannot link the delivery to a specific SubCon PO. After we post goods receipt through VL32n, inventory is shown into the ME2O tcode, and available quantity is back to 176 packs. (It is already delivered). 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. Please elaborate little confuse about details. Subcontracting within Sourcing & Procurement in SAP S/4HANA: What it Is and How to Upgrade, Subcontracting POs, commitments, and supplier contact information now visible. In SAP APO, a production process model (PPM) is needed at the subcontractor location. user can view the list of the transactions he/she used recently in left side of the home page.using Edit option they can customize i mean arrange the FIORI apps tiles based on their requirement. Again, that is not necessarily bad, depending on your accounting policies and the specific case. Thanks for reading. 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. Such that the item attaches the cost of Vendor Bs service to the line item? Thats about it. Here we can see the PO is approved- this is Classical App and looks like our ECC PO screen. 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. Mapping procedure of a given scenario in SAP system. Your usage of this website signifies your agreement with our terms and conditions. Some supplier relationships require you as the purchasing organization to provide the supplier with the components used in their part of the value creation. However, with SAP S/4HANA, a subcontracting MRP area is the default option for subcontracting planning. The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. Next, click OK checkboxes as shown below. It appears that you are limited to only one default Delivery Type per Plant. Available quantity at the subcontractor is back to 76 packs, where the real information is 176 packs. 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. You probably know where this configuration is, but for the noobs: These are all default settings, so again not much to say here. Finally, it is necessary to click Post button to save the document. Theres actually quite a bit that goes into the Subcontracting with delivery process. Learn how to integrate SAP S/4HANA with SAP Ariba, SAP Fieldglass, and more. Activating PR & PO Approval Notification. This often is used as justification by finance and other stakeholders on the buyer side for setting up phantom plants to represent the supplier and then moving and tracking the materials in these plants. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. 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. If the material is already available in the client own stock, it will be issued from the unrestricted use stock to the vendor. Does this sound familiar? but here the difference we are using FIORI UI instead of GUI Interface. Thanks for your reply. it is more useful apps. 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. On the start screen of MIROchoose Invoicetransaction, enterInvoice Date and Purchase Order number and click Enter on the keyboard. Alerting is not available for unauthorized users, Right click and copy the link to share this comment, Approve purchase order (optional) Approval Process not, Transfer stock for subcontractor with delivery, Transfer stock for subcontractor without delivery, Goods receipt for subcontract order (without WM). We would be happy to hear your feedback or questions. Next, click OK checkboxes as shown below. Simple and in an easy language. its plants), or indirectly (using another of its suppliers). Vendor shall process the item / use the item provided & supply the final item. Creating Bill of Material for Subcontracting in FIORI. 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. Partial delivery to subcontractor is possible. The system proposes the labor charge from the info record for the subcontracting product. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. Any one help me to this query ASAP? Through Screen shots process is self explanatory.