System automatically selects movement type 101 O (GR to SC Vendor). Available quantity at the subcontractor is back to 76 packs, where the real information is 176 packs. 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. In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. Subsequently, the IDoc inbound scenario DESADV / DELVRY07 was enhanced to support subcontracting components in inbound deliveries communicated electronically the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1, The problem with the above solution is that subcontracting components quantities transferred with DESADV / DELVRY07 message get fixed in the inbound delivery. During the MRP run, the system explodes the BOM requirements and classifies dependent subcontracting elements as such. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. Does this sound familiar? 3.Create PO with item category as "L" . Creating a sales order for intercompany sales. Therefore no need to transfer the material through ME2O. Finally, you save the subcontracting purchase order. Ive been blogging about SAP and various other interests since 2013. if yes do you have example idoc. 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? 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). 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. Executing an intercompany sales process. BOM Explosion to determine the Raw material components provided to Subcontracting vendor. How to receive additional components left after making finished product. Partial delivery to subcontractor is possible. Thanks for visiting. Start it and selectDisplay against Material Documentwhile inputting thedocument number as shown below and click Enter. This is done when SC Vendor-02 sent finished product to our warehouse. 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. After saving this document system posts this material stock as stock provided to vendor. Below are the steps involved in this process. 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) Then, expertly run your system after go-live with predictive analysis and machine learning. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. Subsequent goods entry is booked automatically with these entries. Is this possible? This creates a host of additional transactions for each subcontracting order and doesnt scale well. As subcontracting Process everybody knows and it is not a new topic.. The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. You create a delivery for the lenses to be shipped to your vendor. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. 2. The components are then supplied to the vendor. he can add text note required if any notification sent to his next level approver. So it will automatically explode when we create purchase order. 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. Such that the item attaches the cost of Vendor Bs service to the line item? I'm a career-long IT specialist with a focus on SAP for over 18 years. ERProof SAP MM SAP MM Training Subcontracting Process in SAP. 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. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. 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. 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. (It is already delivered). Thanks for reading. However, with SAP S/4HANA, a subcontracting MRP area is the default option for subcontracting planning. See the future of sourcing and procurement! I suspect, however, that the issue is that perhaps the status of the serial number is not being updated properly. In subcontracting process, raw materials are provided to subcontracting vendor. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. Material document posted and stock is placed in our location. Here i have mentioned Subcontracting vendor creation, subcon info record and BOM creation with respect to FG material. 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. The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. In SAP APO, a production process model (PPM) is needed at the subcontractor location. Now, during unloading you realize that 3 pallets are missing. It means that the Cost(per unit) which is reflecting in MIGO is sum of raw material and the additional cost given in condition tab in subcontract PO. I found a solution for this as we have to select Subcontracting Type 1 at item level. 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. Abhijeet - Thanks for sharing this blog. Editors note: This post has been adapted from a section of the book Sourcing and Procurement with SAP S/4HANA by Justin Ashlock. Am I right or wrong? Proc 30) Display Material document App Get unlimited access to all SAP PRESS books! If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. using GR for Purchase order with Movement type 101. You order the end product using a subcontract order. 4) In the item detail tab,Material data click on components and Explode BOM 2, Goods receipt for first subcontracting purchase order items (MIGO), 1) This is generally done when SC Vendor-01 has sent confirmation of sending the goods to SC Vendor-02, As we have maintain delivery address of SC Vendor-02 in the delivery tab of first purchase order. Subcontracting materials are sent to vendors for processing finished products. 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. PR approval App 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. Thanks for your reply. Hi, Read on for more about the SAP Subcontracting PO Delivery Setup. (Movement TYpe 101). We would be happy to hear your feedback or questions. Now, lets display thedocument that we have just created. Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. Make a request for us to schedule training around what works for you? If you are running a vanilla SAP S/4 HANA system, chances are youll be looking at an LB delivery type (Delivery for Subcon.). The process of buying materials and obtaining services from vendors or dealers is called procurement. Create/Change/ Display material App After we post goods receipt through VL32n, inventory is shown into the ME2O tcode, and available quantity is back to 176 packs. 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). if they are ok with the PO then they can approve it else deny the PO. This provides improved integration of all the master data necessary for the process. The vendor will be billed only for items delivered. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Do Invoice Verification for second subcontracting purchase order (MIRO). Material Master setting for Subcontracting Materials (MM01), Subcontract material SUBCONTRACT-01(HALB) (Sp. SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all . You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. 5 * Rating. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. Subcontracting is a critical process for many organizations, and from an SD consultants perspective its quite unique. it again depends on the user decision. Lets take a closer look at the handoff from Purchasing to the SD Delivery. Easily understood and completed my Sub-contracting entry. 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. in the case of not providing components but still wanting to value the finished goods at std including inbound freight? Explore ABAP, FICO, SAP HANA, and more! 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! Later, the subcontractors returned the boxes back to the client. Thanks for the question, Kumar. Create Supplier Invoice Apps or Incoming Invoice Apps. Can I do transfer posting the material to vendor before rise the subcontracting Po. It brought: Subcontracting Components in Inbound Deliveries. As the worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you accelerate your SAP journey. 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. We are currently setting up the subcontracting process in our SAP system. How to Repackage a Transport Request (TR) in SAP? Invoices will be entered in the system against the purchase order. 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? Is the Info record mandatory in subcontracting ? You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. I am a husband and father. For a premium experience please use an alternative browser. Do you have a question and want it to be answered ASAP? It will open the screenshot shown below. 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 issue of components which we provided to the Subcontractor is triggered to 543 Movement type Can you please explain about accounting entries in subcontracting? The process is very similar to the generic subcontracting process (see Subcontracting ). The system will open a window with the list of documents in accounting. This enables you to assign information about the batches used and the component quantities in the inbound delivery. Procurement Info record created in FIORI using Create Procurement Info record FIORI Apps. The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. How I need to set up the process and BOM? Thanks a lot!!!! The invoice is posted. Finally, it is necessary to click Post button to save the document. 2.Maintain the BOM for the material. For example, one company that manufactured batteries needed specialized printing services which were outsourced to subcontractors. In SAP APO it is not possible to change the dependent demand for subcontracting purchase requisitions. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). Nice docs. In SAP HR after hiring Hi, There's no e-books or any course materials about the QM module. If anyone could help with it, maybe with something to do on our customizing and/or some OSS note it would be great. 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After saving this document system posts this material stock as stock provided to vendor before rise the subcontracting,... Vendor before rise the subcontracting process everybody knows and it is not possible to provide,... The list of documents in accounting to adjust consumption quantities FG material them the. The purchase order ( MIRO ) process for many organizations, and from an SD perspective. Package for SAP ERP all, quantity, Plant, and Storage location Sourcing and Procurement SAP! The subcontractor is back to the line item inbound freight number is not being updated properly provided to vendor! With a focus on SAP for over 18 years materials are sent to vendors for processing finished products background determination! When we create purchase order material master setting for subcontracting materials are provided to vendor before rise the subcontracting in! Enables you to assign information about the QM module rise the subcontracting process in SAP when companyoutsources. 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