After saving this document system posts this material stock as stock provided to vendor. Required fields are marked *. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Ive been blogging about SAP and various other interests since 2013. 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. This provides improved integration of all the master data necessary for the process. 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). This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. Participants will also learn about the associated customizing settings for the selected cross- application business processes. using Transfer posting Option and movement type 541. 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. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). Creating Bill of Material for Subcontracting in FIORI. Does this sound familiar? The good receipt and the goods issuewill be done simultaneously by the SAP system. As mentioned previously, the STO keys off of a Purchase Order. Sales Order) to the destination (i.e. 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) . Some supplier relationships require you as the purchasing organization to provide the supplier with the components used in their part of the value creation. Not the perfect solution but better than nothing. It would have been nice if SAP had provided a BAdI enhancement here. I've just check that serial numbers are visible in the IDoc structure on both levels: But I don't have ready made examples. Im not sure if theres actually much to look at in the setup of this Sales Document Type. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Serial number is in warehouse only. -SUBCONTRACT-01(HALB) (Sp. Many a times, more than one subcontractor is used for manufacturing at different level of BOM. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all . 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. Post it on our FORUM here --> SAP FORUM! Thanks for reading. Get an overview of our wide selection of books on every relevant SAP topic. The consumption of the components is posted. To do it, click on Doc. 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. However, you need to provide to the vendor at least one component because otherwise it wont be subcontracting but simply a regular purchase order. We would be happy to hear your feedback or questions. One of the workarounds was to decouple subcontracting goods receipt and components consumption with the modification from the note 654613 Batches and goods receipt for inbound delivery for provision of materials for subcontract order. 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. 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N) 2) Keep delivery address to plant as by default. They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. This tutorial will provide detailed guidance about working with subcontracting in SAP ERP system. The PPM consists of components and operations. So it will automatically explode when we create purchase order. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. The vendor charges for his or her service. Finally, you save the subcontracting purchase order. If the material is already available in the client own stock, it will be issued from the unrestricted use stock to the vendor. Raw Material (SUBCON-RM01) (ROH) A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. 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. PO Approval App. if they are ok with the PO then they can approve it else deny the PO. These two options are now combined into one driven by MRP areas, but it doesnt require material data on all components and can support full-lot sizing and sourcing functionality. 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. However even if the missing 3 pallets are stolen, you might want not to put this cost into COGS but offset that with insurance policy compensation for instance. There are relatively few logistics-related fields. demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. Now, during unloading you realize that 3 pallets are missing. The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to theissue of components which you provided to the subcontractor earlier. Thx. Goods issue items for the SIM cards (components). So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. 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. The process is very similar to the generic subcontracting process (see Subcontracting ). Create/Change/Display Bill of material (BOM) App The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. Here i have mentioned Subcontracting vendor creation, subcon info record and BOM creation with respect to FG material. 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. You can use this business function to enter subcontracting components in the inbound delivery, or you can fill the subcontracting components using a shipping notification from the supplier. Alerting is not available for unauthorized users, Right click and copy the link to share this comment. Thanks for the question, Kumar. Finally, it is necessary to click Post button to save the document. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. Analytical/ Report related Apps in FIORI. The objective is to eliminate the subcontracting practice currently used in the current process. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. Hi, 4.Issue material to vendor with movement type 541. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. 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. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. You need at least three confirmed participants to register and SAP will add it to your schedule. If the serial number is in warehouse, then it may not allow you to receive it. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. 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. Unplanned component which is directly consumed but not available in PO BOM list. Terms of use | Sir, What is S/4HANA? Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. 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! First, well start with. 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. Inbound processing is therefore more efficient since manual batch entry tasks are removed. Account Assignment and Item Category are usually blank in a subcontracting PO. Privacy | 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 PO Items relevant for Subcontracting will need an Item Category of L for Subcontracting. The system proposes the labor charge from the info record for the subcontracting product. Visit SAP Support Portal's SAP Notes and KBA Search. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. Did you learn something new? Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. I believe, It will be helpful and will provide sufficient information to the readers. 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. In subcontracting process, raw materials are provided to subcontracting vendor. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. For subcontracting with the Start it and selectDisplay against Material Documentwhile inputting thedocument number as shown below and click Enter. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Create Subcontracting vendor in FIORI. it is more useful apps. Create/Change/Display Procurement Info record App We would love to hear your feedback in the comments section below. Please note the movement types used: 101 for Goods Receipt and 543 for Issue of Components. Every organization acquires material or services to complete its business needs. Thanks a lot!!!! 6.MIRO to account for vendor's invoice for the service charge& material used by him. The ME2O tcode no longer shows the expected receipt to the subcontractor !

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