Setting up subcontract PO

Question

I am looking for guidance to be able to set up subcontract PO- Is there detailed documentation available in SAP?
Do I need to set up articles with BOM to be able to set up subcontract PO?
What config requirements do I need to consider?
Need help.
Thanks
Raj

Answer 1

Hi,
Refer following link;
Subcontracting Process
Subcontracting Process
Subcontracting without Payment of Duty
- Creation of Subcontracting PO (ME21N)
To create a subcontract order, proceed as follows:
   1. Enter the material you want to order and the item category for subcontracting (L) in the order item.
      Press Enter to display the screen for component processing.
   2. Enter the components that the vendor requires to manufacture the ordered material (end product). Note the following:
         1. You do not need to enter the date required for the components. This date is proposed by the system when you press Enter. It is calculated as follows:
                      o Delivery date of the item minus planned delivery time
         2. If you do not want the quantity of the components to be changed if the order quantity of the end product is altered, set the indicator Fixed quantity.
         3. If you want to assign a particular batch of the component to the vendor for the manufacture of the ordered material, enter the desired batch.
         4. You can determine whether the components are available on the date required by selecting Component List
            ® Component Availability. If you entered a bill of material as the material in the subcontract order, the components are created automatically.
   3. If you want to determine the components in the bill of material at a later date (for example, if the bill of material is subsequently changed), choose Item ® Goto ® Components ® New BOM explosion. The existing components are deleted and redetermined in the bill of material.
   4. Save the purchase order.
When you print the purchase order, the components are printed per order item.
- Transfer Posting of Components to Subcontractor (Mvmt Type - 541) (MB1B/ME2O/MIGO)
1. From the Inventory Management menu, choose Goods movement ® Transfer posting.
2. Enter the issuing plant and storage location. Choose Movement type ® Transfer posting ® Stck w. subcontract. ® From unrestricted. Enter the vendor and then choose Transfer posting ® Create with reference ® To purchase order.
A dialog box appears in which you can enter up to 4 purchase orders.
3. Choose Continue.
The collective entry screen appears. The vendor and the components contained in the purchase orders entered are automatically proposed by the system.
4. Edit and adopt (copy) the desired items.
5. Post the document.
- Creation of Subcontracting Challan w.r.t. Transfer Posting Doc (J1IF01)
- Goods Receipt w.r.t. Subcontracting PO and Refer Subcontracting Challan at the time of GR (MIGO) {GR with 101 and auto consumption of components with 543 movement}
When the vendor delivers the ordered material (the end product), you post a goods receipt for the subcontract order in the same way as for a standard purchase order. The system determines the components for each order item and creates a goods issue item for each component. As a result, the material document consists of the following items:
Goods receipt items for the materials supplied by the vendor
Goods issue items for the components
After you have copied an order item, you can change the quantities in the goods issue items.
Valuation: - The goods receipt is valuated at the subcontract price plus the value of the components consumed.
Note: - If by-products are planned in the purchase order as components with negative quantities, receipt of the by-products is automatically posted to the stock of material provided to vendor at goods receipt.
- Reconciliation of Subcontracting Challan (J1IFQ)
- Completion of Subcontracting Challan (J1IF13)
- Generation of Annexure IV (J1IFR)
- LIV for Subcontracting PO (MIRO)
Subcontracting under Full Payment of Duty
- Creation of Subcontracting PO (ME21N)
- Transfer Posting of Components to Subcontractor (MB1B/ME2O/MIGO)
- Creation of Excise Invoice w.r.t. Transfer Posting Document (J1IS)
- Capture Excise Invoice at the time of GR of Finished Goods w.r.t. Subcontracting PO (MIGO)
- Post Excise Invoice (J1IEX)
- LIV for Subcontracting PO (MIRO)
Master Data
- MM01- Material Masters for Components and FG
- XK01 - Vendor Master (Subcontractor)
- CS01 - BOM for FG
- ME11 - Purchase Inforecord for Subcontracting
Note: - Excise Transactions need to be performed only if it is applicable.