Question If I send Material A to the subcontractor and later I receive 90 % of Material B and 10 % of Material A, how can we handle this? SAP process flow 1. Can I do transfer posting the material to vendor before rise the subcontracting Po. At the time of invoice receipt a liability is created against the vendor. 2) Keep delivery address to plant as by default. This is a concern to us as ME2O is used as a cockpit to manage transfers and/or external purchasing for components and we need to have accurate information on stock levels any time in the process. The provision is a transfer posting from the unrestricted use stock to the stock of material provided to a vendor. Please elaborate little confuse about details. You need at least three confirmed participants to register and SAP will add it to your schedule. 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. Raw Material (SUBCON-RM01) (ROH) 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. 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. Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. 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: This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. Activating PR & PO Approval Notification. its plants), or indirectly (using another of its suppliers). In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. Sir, 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. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. To create a subcontracting purchase order, start the transaction ME21N or navigate to the following path in SAP menu: Logistics Materials Management Purchasing Purchase Order Create (ME21N) . Sub contracting Info Record Created in FIORI. a reverse of me2o ? Make a request for us to schedule training around what works for you? Sales Order) to the destination (i.e. if yes do you have example idoc. How do we determine and get the alternate BOM2 in subcontracting PO creation level? Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. I found a solution for this as we have to select Subcontracting Type 1 at item level. Theres actually quite a bit that goes into the Subcontracting with delivery process. First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor. Later, the subcontractors returned the boxes back to the client. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Mapping procedure of a given scenario in SAP system. Theme: Baskerville 2 by Anders Noren. Again, that is not necessarily bad, depending on your accounting policies and the specific case. In subcontracting process, raw materials are provided to subcontracting vendor. Alerting is not available for unauthorized users, Right click and copy the link to share this comment, 645119 Problems for subcontracting using delivery, 338119 Goods receipt in inbound delivery for SC order, 654613 Batches and goods receipt for inbound delivery for provision of materials for subcontract order, 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1, 1397948 - Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. The consumption of the components is posted. The system proposes the labor charge from the info record for the subcontracting product. Its being processed by subcontracting vendor, convert it to semi-finish material and deliver back. Serial number is in warehouse only. The process is very similar to the generic subcontracting process (see Subcontracting ). Get unlimited access to all SAP PRESS books! The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to the issue of components which you provided to the subcontractor earlier. 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. The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. 3.Create PO with item category as "L" . This purchase order shows up in the ME2O transaction. So, how does SAP know when and how to copy data between these two objects? It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. 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. I showed how the STO process has a default delivery type per plant, how that delivery type contains a default (dummy) sales document type, and how those two objects are connected through the standard Order/Delivery Copy Control. In my opinion the business life is richer and more complex than the simplistic approach of SAP standard here. 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. Every organization acquires material or services to complete its business needs. 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 The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. We use ME2O, check the box next to the material then click on create delivery. Have any questions or comments? This differs from classic SAP ERP for subcontracting, in which you could plan either with or without MRP areas. Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. Adding this value will open up the Components button located on the item Material Datatab. Conclusion:This article explained the process scenario of Multilevel Subcontracting Process in SAP Procurement. Not using Migo or MB1B and 542 movement type. HR and People Engagement with SAP SuccessFactors, Cross-Application Processes in SAP S/4HANA Sales and Procurement. Subcontracting in SAP APO is modeled with the help of two orders. Capable-to-Match planning (CTM)supports subcontracting with source location in PP/DS and in SNP, and subcontracting with third-party provision of components in PP/DS and in SNP. (ls_comp-fmeng = abap_true). The system will generate a purchase order number internally. Please contact in case of any queries and clarifications. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. Imagine the following, quite typical scenario. Therefore no need to transfer the material through ME2O. I am a husband and father. In this process, components are shared to vendor to get the final product. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. Analytical apps related to PR, PO, GR, IV- The process of buying materials and obtaining services from vendors or dealers is called procurement. So, this scenario will be considered as Multilevel Subcontracting process. Can we have subcontracting order without BOM/Components. Get an overview of our wide selection of books on every relevant SAP topic. Through Screen shots process is self explanatory. 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. Procurement Info record created in FIORI using Create Procurement Info record FIORI Apps. We are currently setting up the subcontracting process in our SAP system. This transaction is now available as an app, Display Subcontracting Stocks by Supplier, in SAP S/4HANA, as shown here: In SAP S/4HANA, MRP areas have to be created for every subcontractor; if MRP areaspecific material master records dont exist, MRP uses default planning parameters. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 Did you like this SAP MM tutorial? First, well start with. View all posts by Michael. It brought: Subcontracting Components in Inbound Deliveries. Another example of the subcontracting process in SAP is whena company provided raw sims and packaging materials to a subcontractor. What do you think? no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. Create/Change/Display Bill of material (BOM) App We use the ME2O transaction to manage inventory at the subcontractor, and we use inbound deliveries on all our purchasing processes (inbound deliveries are used through VL06i to provide the subcontractor a report with incoming receptions, and to create batches). 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. Start it and selectDisplay against Material Documentwhile inputting thedocument number as shown below and click Enter. However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03. 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. I believe, It will be helpful and will provide sufficient information to the readers. There are relatively few logistics-related fields. 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. The components are then supplied to the vendor. SAP MM - Procurement Process. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. Double click on Accounting Document. Thx. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. Im going to highlight the standard configuration as it exists within a standard S/4 HANA system. Does this sound familiar? 5.Receive the material against the PO with movement type 101. Finally, click on Post button to post the document. 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 the process is same as the ECC subcontracting Process. Invoices will be entered in the system against the purchase order. Required fields are marked *. Post it on our FORUM here --> SAP FORUM! Easily understood and completed my Sub-contracting entry. However, there is no copy control from an STO PO to an SD Delivery. Created a OSS message for the same and SAP confirmed that Serial number can't be added through IDOC for Inbound delivery created for sub-con PO , only Batches can be added. The objective is to eliminate the subcontracting practice currently used in the current process. (here material and components are MAT1 only). I am a husband and father. They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. So it will automatically explode when we create purchase order. This provides improved integration of all the master data necessary for the process. Create/ Change/Display Supplier App Material document posted and stock is placed in our location. Have you had to do much with your default SAP STO Delivery Setup configuration? The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. We want to receive back MAT1-100020. Below are the steps involved in this process. Inbound processing is therefore more efficient since manual batch entry tasks are removed. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). 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. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. 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). The vendor performs its service and delivers the ordered material (the end product). Get step-by-step instructions to configure sourcing, invoicing, supplier management and evaluation, and centralized procurement. Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). See the future of sourcing and procurement! 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. 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/Change/Display/manage/ My Purchase requisitions App It is likely to slip through tests and bite you only down the road. (It is already delivered). Configuring intercompany sales. Is the Info record mandatory in subcontracting ? Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? To illustrate with an example, your company manufactures lenses. You can return it partially or full using a Purchase Order or not. -SUBCONTRACT-01(HALB) (Sp. These components are usually associated with a BOM. Posting Transfer Posting stock from own stock to Sub contractor . Here i have mentioned Subcontracting vendor creation, subcon info record and BOM creation with respect to FG material. Proudly powered by WordPress Generally, SAP SD processes rely upon copy controls to define how documents and data are copied from the source (i.e. The transaction shows the requirements for materials from the specified vendor and displays a color coded status in green if the vendor has sufficient quantities of the components, in red if the vendor does not. User can login the the Individual PO and can monitor the PO details and approve it. This approach requires more manual effort and accounting acrobatics than is optimal. Lets take a closer look at the handoff from Purchasing to the SD Delivery. Thanks for your reply. Explore ABAP, FICO, SAP HANA, and more! 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. Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. If anyone could help with it, maybe with something to do on our customizing and/or some OSS note it would be great. They charged the company for their services rendered. 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. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. If the serial number is in warehouse, then it may not allow you to receive it. Delivery of components to subcontracting vendor (ME2O) 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. How to manage serialized material for subcontracting repair? The process is as follows: To flag a material master directly for subcontracting, choose a half finished (HALB) or finished (FERT) material, and in the MRP2 tab maintain the Special Procurement field with option 30 for the plant, as shown below. Terms of use | Display Material document App Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. List Material document Apps ERProof SAP MM SAP MM Training Subcontracting Process in SAP. The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). How to Repackage a Transport Request (TR) in SAP? Is this possible? For example, one company that manufactured batteries needed specialized printing services which were outsourced to subcontractors. Your email address will not be published. Standard Process Flow ME21N - Purchase order creation MIGO_TR - Send components to a subcontractor Next,provide Amount in the box to balance the amount of service provided. 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Type 1 at item level located on the item material Datatab returned the boxes back to material..., FICO, SAP HANA, and centralized Procurement of invoice receipt liability... Area maintained for the supplier PO/My purchase order the finished item in the system approach of standard. Without login to each and every Individual PO and can monitor the PO movement! With Enhancement Pack 03 subcontracting Info record and BOM creation with respect to FG material as subcontracting.