The liability created will only be of the amount charged by the vendor for processing and does not include the material component value. Delivery of components to subcontracting vendor (ME2O) eg: sending MAT1 with serial number 100020 to the subcontractor for repair. To receive material against the purchase order, SIM cards and packaging materials need to be issued to the subcontractor. Also, you need to provide Material, Quantity, Delivery Date, Plant, and Price. Your email address will not be published. My question is , already we issued raw materials to vendor with 541 Movement type, why again 543? Goods issue items for the SIM cards (components). Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. In this process, components are shared to vendor to get the final product. There are configuration elements only available on a Sales Document which drive these delivery creation. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. Thanks a lot!!!! Also in previous versions of SAP ERP, you could check subcontracting stocks by supplier by running reports from a specific IMG menu path. They charged the company for their services rendered. Finally, click on Postbutton to save the invoice receipt (IR). You can have it without BOM by entering all the components manually. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. 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. 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. Generally, SAP SD processes rely upon copy controls to define how documents and data are copied from the source (i.e. 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. The system proposes the labor charge from the info record for the subcontracting product. Double click on Accounting Document. Create/Change/Display Bill of material (BOM) App Create/Change/Display Procurement Info record App PR Created and purchase requisition sent to Approval. 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. 5 * Rating. 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). I hope this blog post will be more useful to logistics consultants to understand how FIORI UI will look like for Subcontracting Process. Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. Subcontracting with multiple production versions is supported. There are relatively few logistics-related fields. Use transaction MIGO to provide components to the subcontractor. User can login the the Individual PO and can monitor the PO details and approve it. Please contact in case of any queries and clarifications. Post it on our FORUM here --> SAP FORUM! Simple and in an easy language. Did you learn something new? I've been blogging about SAP and various other interests since 2013. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N) 2) Keep delivery address to plant as by default. Lets start with discussing the steps that are involved in the subcontracting process in SAP. 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 Its being processed by subcontracting vendor, convert it to semi-finish material and deliver back. Now, during unloading you realize that 3 pallets are missing. Subsequent goods entry is booked automatically with these entries. 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. What do you think? if they are ok with the PO then they can approve it else deny the PO. 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. 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. Really its very useful for content. Proudly powered by WordPress Very easy to understand now. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. Sound off in the comments. Very useful content , Thanks for sharing with us. Thank you, helped a lot. Creating Bill of Material for Subcontracting in FIORI. 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. Easily understood and completed my Sub-contracting entry. 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. 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. Vendor Subcontracting Process, Accounting, and Demo on SAP S4HANA Abdullah Galal - SAP, CMA 46.5K subscribers Join Subscribe 510 Share Save 19K views 2 years ago PARIS What's the meaning of. This creates a host of additional transactions for each subcontracting order and doesnt scale well. Is there a process to bring components back from the Subcontractor . Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. 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. 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. The components are posted to the stock of materials provided to the vendor. In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. 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. Please keep posting the knowledge. 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. I'm looking forward for the next ones , Thanks for sharing. If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. 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. If a purchase info record has been maintained, the service charges are defaulted into the purchase order. 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) Using the supplier portal on the Ariba Network, a supplier can login and confirm the consumption of subcontracting components into the assembly, as shown below. Theme: Baskerville 2 by Anders Noren. Thx. Proc 30). SAP Stock Transfer Order and Stock Transfer Process. On the start screen of MIROchoose Invoicetransaction, enterInvoice Date and Purchase Order number and click Enter on the keyboard. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. It would have been nice if SAP had provided a BAdI enhancement here. Searching PR creation apps in Apps Finder in FIORI screen. 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. 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. Legal Disclosure | Finally, it is necessary to click Post button to save the document. Executing an intercompany sales process. Thanks for visiting. Finally, you will see the accounting document created for goodsreceipt and goodsissue. 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. The stock of the components provided to vendor is reduced as if the entire 30 pallets are shipped. List Material document Apps Billing the customer. How to manage serialized material for subcontracting repair? 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. The list contains the object number of each component, together with the quantity and unit of measure. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. 3.Create PO with item category as "L" . Terms of use | Thanks. Did you like this SAP MM tutorial? Create Subcontracting vendor in FIORI. Without knowing the error message, it is tough to diagnose the issue. but here the difference we are using FIORI UI instead of GUI Interface. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. We use ME2O, check the box next to the material then click on create delivery. Can we have subcontracting order without BOM/Components. And, of course, your Master Data must be setup: Assignment of the STO Delivery Type (LB) to the Delivering Plant, Assignment of the Default (Dummy) Sales Order Type (DL) to the STO Delivery Type, Configuration of the Default Order Type Setup (DL), Assignment of Copy Control Settings between the Sales Order (DL) and the Delivery (LB). Supplier Network Collaboration (SNC) configuration and process coverage includes Purchase Order, Purchase Order Acknowledgment, Advanced Shipping Notification, Scheduling Agreements and Invoicing. Implementation of "External Material Processing using Production Orders": Develop a process in SAP to support all efforts related to External Processing using Production Orders as the method for subcontracting. Please elaborate little confuse about details. Here in the highlighted box you provide the number of your subcontractor. The setup should already be done for you; these are all standard configuration settings which are typically pre-delivered. Im going to highlight the standard configuration as it exists within a standard S/4 HANA system. Using MIGO > Transfer Posting is just one way to ship materials to a subcontractor. Next,click on Check button to check whether the document is OK. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. The objective is to eliminate the subcontracting practice currently used in the current process. Help. It brought: Subcontracting Components in Inbound Deliveries. How to Repackage a Transport Request (TR) in SAP? Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. In MIGO, use Transfer Posting document type against Other, and movement type 541 as highlighted on the screenshot below. the issue of components which we provided to the Subcontractor is triggered to 543 Movement type Hi, Now, lets display thedocument that we have just created. 2.Maintain the BOM for the material. The components that the vendor needs to manufacture the end product are specified in the subcontract order. 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. Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Im a career-long IT specialist with a focus on SAP for over 18 years. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. Then, expertly run your system after go-live with predictive analysis and machine learning. 6.MIRO to account for vendor's invoice for the service charge& material used by him. 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. Please explain detail steps and Tcode. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. Used in manufacturing, but can also be used in the current process subcontracting vendor ( ME2O eg. You ; these are all standard configuration settings which are typically pre-delivered running from! To account for vendor & # x27 ; s invoice for the service charges are defaulted into purchase! 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