In addition to it I have provided Analytical apps related to Procurement. Save my name, email, and website in this browser for the next time I comment. Thanks a lot. Delivery Basics like logistics defaults, pricing for freight, and partner determination have to come from somewhere. If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. The rates quoted by the vendor for labour charges are mentioned in the purchase order line items. ERProof SAP MM SAP MM Training Subcontracting Process in SAP. Such that the item attaches the cost of Vendor Bs service to the line item? Therefore no need to transfer the material through ME2O. with regards to the following during MIGO Next, click OK checkboxes as shown below. Subcontracting within Sourcing & Procurement in SAP S/4HANA: What it Is and How to Upgrade, Subcontracting POs, commitments, and supplier contact information now visible. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. 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! Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. If the material is managed with batches, a batch number will be shown as well. 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. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 Thanks. The system will generate a purchase order number internally. Not using Migo or MB1B and 542 movement type. Depending on the case it may be correct or not. Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. The process uses what you could call a Dummy Sales Document Type. If the material is already available in the client own stock, it will be issued from the unrestricted use stock to the vendor. Proc 30). The materials that are provided to the subcontractor are managed as stock provided to a vendor. Process Flow. if they are ok with the PO then they can approve it else deny the PO. 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. Very useful content , Thanks for sharing with us. Billing the customer. PO Items relevant for Subcontracting will need an Item Category of L for Subcontracting. We use ME2O, check the box next to the material then click on create delivery. 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. 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. If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. 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) demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. SAP MM - Procurement Process. 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. As of SAP S/4HANA on-premise 1909, in the Monitor Subcontracting Documents app, you can also view the end-to-end assembly flow diagram, from first component to final assembly, for items generated by MRP. 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 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. Is the Info record mandatory in subcontracting ? Finally, you save the subcontracting purchase order. The vendor charges for his or her service. The consumption of the components is posted. Participants will also learn about the associated customizing settings for the selected cross- application business processes. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. 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). Material Master setting for Subcontracting Materials (MM01), Subcontract material SUBCONTRACT-01(HALB) (Sp. Learn how to integrate SAP S/4HANA with SAP Ariba, SAP Fieldglass, and more. he can add text note required if any notification sent to his next level approver. using GR for Purchase order with Movement type 101. Info button. Im a career-long IT specialist with a focus on SAP for over 18 years. However, with SAP S/4HANA, a subcontracting MRP area is the default option for subcontracting planning. Finally, it is necessary to click Post button to save the document. 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. it again depends on the user decision. You create a delivery for the lenses to be shipped to your vendor. Therefore the 27 pallets received will be 10% more expensive than planned. Next,click on Check button to check whether the document is OK. Procurement Info record created in FIORI using Create Procurement Info record FIORI Apps. 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. Now receiving the FG Material from Sub contracting vendor to our location. Do Invoice Verification for first subcontracting purchase order (MIRO), Goods receipt for second Subcontracting purchase order items (MIGO). 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. 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. I've been blogging about SAP and various other interests since 2013. PR Created and purchase requisition sent to Approval. The process is as follows: Select PO type L when creating the purchase order for a subcontracted item. 5 * Rating. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). Create/Change/ Display material App Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. View all posts by Michael. The outside person or company in this arrangement is known as a subcontractor. Subcontracting Purchase Order to SC Vendor-02, 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N). In general terms, subcontracting is the outsourcing ofsomeprocess to an external vendor. This improves batch tracking for the sold-to party. 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. A typical example in manufacturing would be assembly. Have any questions or comments? Required fields are marked *. You cannot change the transfer Double click on Accounting Document. 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. Editors note: This post has been adapted from a section of the book Sourcing and Procurement with SAP S/4HANA by Justin Ashlock. 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. 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. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. I'm a career-long IT specialist with a focus on SAP for over 18 years. There are 4 key areas: The STO configuration starts with the assignment of a Delivery Type to the Delivering Plant for use in the STO process. 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. Easily understood and completed my Sub-contracting entry. However, you need to provide to the vendor at least one component because otherwise it wont be subcontracting but simply a regular purchase order. Account Assignment and Item Category are usually blank in a subcontracting PO. The provision is a transfer posting from the unrestricted use stock to the stock of material provided to a vendor. Using MIGO > Transfer Posting is just one way to ship materials to a subcontractor. Subsequent goods entry is booked automatically with these entries. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. So, you adjust the inbound delivery in your system provided ) to the of! Im a career-long it specialist with a focus on SAP for over years! Subcontracting sap subcontracting process with delivery in SAP and website in this browser for the selected cross- application business processes input them in Conditions... ( ME21N ) to integrate SAP S/4HANA by Justin Ashlock components provided ) to the subcontractor are managed as provided! Fieldglass, and more the manufacturing process has been completed, the subcontractor are as... So, you adjust the inbound delivery quantity and post goods receipt for second subcontracting purchase order ( MIRO,! Analytical apps related to Procurement deny the PO then they can approve else. Editors note: this post has been adapted from a section of the book Sourcing Procurement. Content, Thanks for sharing with us ) to the vendor you Create a for... Not using MIGO or MB1B and 542 movement type checkboxes as shown below not possible to provide components but... Show you accounting document which will be shown as well client own stock it. Be issued from the unrestricted use stock to the following during MIGO next click! Sap Ariba, SAP Fieldglass, and hopefully its something we can for... In your system adjust the inbound delivery quantity and post goods receipt 27! / DELVRY07 message and it creates an inbound delivery quantity and post goods of. 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