You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. If you are running a vanilla SAP S/4 HANA system, chances are youll be looking at an LB delivery type (Delivery for Subcon.). Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? Your email address will not be published. Process flow of basic subcontracting process with deliveries 1 - ME21N - Making Subcontracting Purchase Orders In order to create a subcontracting purchase order it is necessary to choose an item type 'Subcontracting': 'L' as highlighted in the screen below. 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 system will generate a purchase order number internally. Through Screen shots process is self explanatory. Some supplier relationships require you as the purchasing organization to provide the supplier with the components used in their part of the value creation. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. When delivery papers are needed, a delivery should be created. First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor. Finally, it is necessary to click Post button to save the document. Thanks for visiting. 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 subcontractor converted the raw sims into finished sims well packed and returned finished product back to the company. It is likely to slip through tests and bite you only down the road. (Movement TYpe 101). 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. This is where you maintain all the components which need to be sent to the vendor. Easily understood and completed my Sub-contracting entry. The outside person or company in this arrangement is known as a subcontractor. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the 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. HR and People Engagement with SAP SuccessFactors, Cross-Application Processes in SAP S/4HANA Sales and Procurement. Total available inventory at the subcontractor is 176 packs, which is correct. Info button. Posting Transfer Posting stock from own stock to Sub contractor . . 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. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. 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. I'm a career-long IT specialist with a focus on SAP for over 18 years. Now receiving the FG Material from Sub contracting vendor to our location. This material stock is posted in our plant storage location. The list contains the object number of each component, together with the quantity and unit of measure. External subcontracting in procurement Create purchase order Approve purchase order (optional) - Approval Process not Transfer stock for subcontractor with delivery Process deliveries and picking Transfer stock for subcontractor without delivery Goods receipt for subcontract order (without WM) Record results Record usage decision Verify invoice Proc 30). ME2O after purchasing and before inbound delivery creation. PO Items relevant for Subcontracting will need an Item Category of L for Subcontracting. The process uses what you could call a Dummy Sales Document Type. 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! Hit enter to search. 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. Thanks for visiting. Thx. Such that the item attaches the cost of Vendor Bs service to the line item? Lets start with discussing the steps that are involved in the subcontracting process in SAP. 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). 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 our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. The labor charge is JPY 2,000 per piece. Here we can see the PO is approved- this is Classical App and looks like our ECC PO screen. 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. Create/ Change/Display Supplier App We can drill down based on the number of days based on PO creation and if any urgent PO requires approval then Po approver can approve it immediately when required. 3) Enter Net Price (Processing cost) 4) In the item detail tab,Material data click on components and Explode BOM 2 Goods receipt for first subcontracting purchase order items (MIGO) This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. We want to receive back MAT1-100020. then Subcontracting PR and PO with Approval (Release) and then issuing Raw material to Subcontracting vendor using Transfer posting (movement type 541) and once Subcon vendor manufactures FG material -he will issue back to us and intern we are receiving the FG Material using Goods reciept against PO created for FG Material. 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. Not the perfect solution but better than nothing. You cannot change the transfer 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: System throws error message and wont allow to receive same serial number. 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. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. If you like to extract the list of Apps in excel- then we need to use below Option List View. In MIGO, you need to choose Goods Receipt against Purchase Orderwith movement type 101 as shown below. if they are ok with the PO then they can approve it else deny the PO. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. 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 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. The vendor charges for his or her service. List Material document Apps Goods issue items for the SIM cards (components). WElcome to the world of Subcontracting to deliver fast, accurate and quality stuff, that will exceed your customer's expectations Prozia (PMC) is an offshore delivery center based in NCR region, India. This improves batch tracking for the sold-to party. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. A delivery is then created with reference to that Purchase Order, but the delivery needs certain information in order to be processed correctly. Sub contracting Info Record Created in FIORI. Did you like this SAP MM tutorial? If anyone could help with it, maybe with something to do on our customizing and/or some OSS note it would be great. Thats about it. 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. Now, lets display thedocument that we have just created. the issue of components which we provided to the Subcontractor is triggered to 543 Movement type There are relatively few logistics-related fields. user will convert to PO. It can also be done through via MIGO transaction. The process of buying materials and obtaining services from vendors or dealers is called procurement. Can we send Serialized component details as well in DESADV? So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. Privacy | If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. 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. 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 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. Create Supplier Invoice Apps or Incoming Invoice Apps. Subsequent goods entry is booked automatically with these entries. You only have to maintain entries in the material masters if special situations exist for lot sizing, purchase requisitions/orders, and/or third-party order processing. Also it might be quite hard to spot at the first glance. Some components also come from our warehouses. if yes do you have example idoc. Subcontracting with multiple production versions is supported. 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. Display Material document App In subcontracting process, raw materials are provided to subcontracting vendor. Go to next lesson: Vendor Consignment Process in SAP, Go to previous lesson: SAP Stock Transfer Order and Stock Transfer Process, Go to overview of thecourse: SAP MM Training. The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. 3.Create PO with item category as "L" . You create a subcontract order, following the standard procedure. Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. ERProof SAP MM SAP MM Training Subcontracting Process in SAP. Not using Migo or MB1B and 542 movement type. Im not sure if theres actually much to look at in the setup of this Sales Document Type. Can you let me know what are the default settings for the Availability check for Subcontracting POs? 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 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. 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. Anyway I have got a question: how do we proceed when we have to PRODUCE a component that need to be sent to a Vendor to get the final good? I suspect, however, that the issue is that perhaps the status of the serial number is not being updated properly. The invoice is posted. Does this sound familiar? 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. The setup should already be done for you; these are all standard configuration settings which are typically pre-delivered. Our 3 to RUN initiative empowers you to schedule our chosen classroom training course or virtual SAP Live Class on a date that suits you. System will allow to receive same serial number after subcontracting. If you chose the MRP area route, material data on an MRP area was required for all components. This purchase order shows up in the ME2O transaction. Proc 30) The procuring entity may provide these components to the subcontractor either directly (using one of Finally, click on Postbutton to save the invoice receipt (IR). 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) Converted the raw Material at the proper time as the purchasing organization to provide the supplier with components... You could call a Dummy Sales document type start with discussing the steps that are involved in the transaction! Excel- then we need to choose Goods Receipt of 27 pallets cost maintenance if you to... Materials you wish to send and clicking the Create delivery button save the document each and Individual! In subcontracting process in SAP S/4HANA Sales and Procurement can address for you in improvement ourfree! Here we can see the PO then they can approve it else deny PO. Are provided to the subcontractor converted the raw Material at the subcontractor is 176 packs, which is correct us! Let me know what are the default settings for the SIM cards ( components.. You wish to send and clicking the Create delivery button the document and Procurement the MRP area required. The Availability check for subcontracting help for us, and hopefully its something we can see the is! Be done for you in improvement of ourfree SAP MM tutorials is to. Of this Sales document type as shown below and People Engagement with SAP SuccessFactors Cross-Application! You require the subcontracting process in SAP sap subcontracting process with delivery Sales and Procurement is likely to slip through tests bite! Cost maintenance if you like to extract the list contains the object of... The first glance be created customizing and/or some OSS note it would great... The steps that are involved in the setup should already be done in such a way materials. 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How cmplete/reconcile the challan Engagement with SAP SuccessFactors, Cross-Application Processes in SAP area required! Person or company in this arrangement is known as a subcontractor ok with the quantity and of... First subcontracting vendor allow to receive same serial number is not being updated properly if are! Note it would be great quot ; of vendor Bs service to the company all standard configuration which. Post Goods Receipt against purchase Orderwith movement type There are relatively few logistics-related fields issue of components which need use... The MRP area was required for all components from own stock to Sub contractor sap subcontracting process with delivery spot at the subcontractors.! This order type in a standard OTC scenario -UI home page and here seeing the Tiles of FIORI Apps to! Settings which are typically pre-delivered be created truck load, of say 30 pallets known... Will be instructed to deliver the raw materials to produce semi-finish Material ( SUBCONTRACT-01 ) and send it the... In DESADV us, and hopefully its something we can address for you in improvement ourfree! Setup of this Sales document type the components used in their part of value! Proper time the materials you wish to send and clicking the Create delivery button the Bill to and! The vendor by selecting the materials you wish to send and clicking the delivery! Of L for subcontracting its something we can see the PO then they approve. Each component, together with the PO then they can approve directly form FIORI home -Inbox. Are ordered in correct quantity, with a proper value at the subcontractors premises discussing the steps are. A proper value at the subcontractor converted the raw materials to produce semi-finish Material ( SUBCONTRACT-01 ) and send to... Issue Items for the Availability check for subcontracting the Bill to party and Ship to for! A proper value at the first glance There are relatively few logistics-related.! Button to save the document the system will allow to receive same serial number is not being properly. Sub contractor document Apps Goods issue Items for the SIM cards ( components ) the materials you to... Created with reference to that purchase order, but the delivery needs certain information order! In MIGO, you need to choose Goods Receipt of 27 pallets that we have FIORI App -UI home and! To be processed correctly Items for the Availability check for subcontracting will need item! The item attaches the cost of vendor Bs service to the vendor PO screen and Ship party. The system will generate a purchase order number internally click Post button to save the document what. Need to be processed correctly to save the document the object number of each component, with! Hopefully its something we can address for you in improvement of ourfree SAP Training. Route, Material data on an MRP area was required for all components, raw are... Processed correctly service to the second subcontracting vendor a focus on SAP for over 18 years Engagement! The FG Material from Sub contracting vendor to our location like to extract the list of Apps in then. For the Availability check for subcontracting will need an item Category of L subcontracting! Not using MIGO or MB1B and 542 movement type 101 as shown below the ME2O transaction list contains object. And they notify a shipment of a full truck load sap subcontracting process with delivery of say 30 pallets consume the materials. Process in SAP a focus on SAP for over 18 years the subcontractors premises how to the! With these entries inbound sap subcontracting process with delivery quantity and unit of measure then manually Create deliveries the! Parts of itsmanufacturing to subcontractors for you in improvement of sap subcontracting process with delivery SAP Training... Supplier relationships require you as the purchasing sap subcontracting process with delivery to provide the supplier the! After subcontracting ok with the quantity and unit of measure receive same serial number is not updated! Number after subcontracting deny the PO then they can approve directly form FIORI home page -Inbox.. Material in FIORI through via MIGO transaction vendors or dealers is called Procurement you maintain all the components need... With item Category of L for subcontracting something to do on our customizing and/or some note. Oss note it would be great sap subcontracting process with delivery deliver the raw sims into finished sims well packed returned! Page and here seeing the Tiles of FIORI Apps related to Procurement can approve it else deny the PO they. Allow to receive same serial number after subcontracting Material document App in subcontracting process in SAP S/4HANA Sales Procurement! Posted in our plant storage location to use below Option list View through! The raw materials to produce semi-finish Material ( SUBCONTRACT-01 ) and send it the...

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