Sub contracting CIN scenario

Scenario 1
I have 2 plants.One manufacturing plant & another is import & local sales plant.No manufacturing activity in 2nd plant.I am
creating 2nd plant as vendor & supplying subcontracting materials to the plant from plant 1 with a PO.I am generating 57f challan
also for the material issued.A 3rd party vendor is doing repair in the plant 2 (vendor) & the material is is received in plant 1 again &
challan is reconciled.Then it is sold to customer.Is this cycle correct?
Scenario 2-The only change in this is, i create a PO as free goods & generate 57f & all other are same.But when i reconcile
the 57F the system prompts to reverse challan or do not reverse?Why is the difference is this of Free goods PO.
Which cycle has to be followed in scenario the first or second?

Hi,
First scenario will be the right procedure as of my knowledge. You may test the scenario and validate the excise postings.
Regards,
AKPT

Similar Messages

Sub Contracting - CIN

Hi All,
This is regarding scrap in SC Process with CIN.
I have created a Sub Contracting PO. BoM has two components and also scrap material is entered with negative quantity.
I have transfer posted and created SC Challan.
Next, I have done GR wrt PO referring SC Challan.All things are properly updated, scrap qty is shown with 545+ movement type.
During Reconciliation of SC Challan, scrap item is shown as separate line item, but Scrap generated field is shown as ZERO only. And also system is not saving challan to reconcile, but it is asking assign quantities to scrap item (.i.e it is assuming scrap quantity also has components to be assigned).
Request you to resolve this issue.
Best Reagrds
Madhu

Hi All,
Since no response from long time. I am closing this issue
Regards
Madhu

Delivery order for sub-contract processing scenario

Hi experts,
We got a requirement from our users to sub-contract certain production processing steps (or called external processing per SAP). Same part number would be used for the goods issue and goods receipt. But would like to make the delivery for the goods issuing as the delivery for normal sales parts. (Purchase order -> Delivery order -> Shipping and Packing)
Sub-contract processing will generate purchase order like service order which only contains service fee item, and we found that no outbound delivery order can be created with reference to purchase order in standard SAP.
Have you experienced such scenario before and could share to us please?
Regards

When moving subcontracting part to your subcontractor you can do it via:
1. simple goods movement
2. delivery
1 Simple goods movement (transfer posting)
- /w reference to PO (MB1B + 541)
- w/o reference to PO (MB1B / MIGO + 541)
2 Delivery
Using the before mentioned ME2O you can create the delivery w/o reference to PO
Please note that even if you use the MB1B541PO reference solution, system just suggests the component qunantity on the PO w/o making a real link between PO and goods movement. You can example do the MB1B541PO reference "as many times" as you want...
So, as per my best knowledge there's no solution for your requirement.
I guess one reason of system's behaviour might be that provision of compoenents doesn't depend on one single PO - if you want to reduce your shipment cost you will send out lots of components at once, more than the amount needed for one call-off.
Regards,
Csaba

Sub contracting CIN process.

Hi SAPERS,
Please any body provide me the subcontracting scenarios, If CIN is implemented in any organization in india.
i.e. Is there any time we need to pay CENVAT, VAT to governament, If it is what are the registers to be updated? For which type of Material/Procurement it will happen?
Thanks in advance,
Prasad

Hi Janardhanan,
Thanks for quick answer, I have cleared the most of the part in my problem.
If the components supplied to the sub-contractor is imported items which having Customs duties, Excise, then we will pay the what ever the duties to the government, till this point i am clear.
The components provided to the subcontractor is raw/semi finished material, in that some % of the material scarp is generated. the scarp cost is 5% of the original component. Then the component cost is reduced to 95% onlythe charges of the subcontractorfright charges+miss. charges is become to Finished product cost.
In this case the scenario what is the tax to be paid for the subdontracting process?
Thanks in advance,
Prasad

Sub contracting scenarios

Hi gurus,
I have a question on Sub contracting.
My present scenario is---
-I have CD which have some content in that.when I go for printing of that content,I will give that CD to the vendor and i will ask him to print 100 books.In this case the CD has to be tracked when ever this is given to the vendor for printing.
-In sub contracting we give raw materials to the vendor.the vendor converts the raw material in to finished good.
Here in my scenario if I treat the CD as raw material then at the time of goods reciept i will recieve the fininshed goods as printed books and what will happen about the CD.My requirement is to get back the CD aswell and the value of that cd has to be updated in the GL A/C.
Can any body suggest me which scenario it will work and tell me the process stepts.
Sri devi.

step1 goto tcode cs01 and create a BOM material will be cd only as parent as well child one.
step2 create info record for sub contracting category in me11
step3 create Po with 2 line item 1 for cd item category L
and 2nd for the service you are incurring.
for accounting u need to test it your self . if you feel that 2nd line item is not required then u can skip this one.
step4 issue cd to vendor
step 5 do GR against this PO
please run and test scenerio to get an insight
well i am also learning sap..............

Sub Contracting scenario - Material Lost

Hi Experts,
Material is issued to the vendor against the sub-contracting purchase order. The material is lost in the vendor premises.
How to deal with this scenario
Thanks
Tanvi Sunil

Hi,
I think you should negotiate with the vendor who covers the loss - if your vendor pays they can issue a credit memo.
As for stock adjustment you should consider:
- MB1A / MIGO + 551O
- physical inventory
- take components back to your site by MB1B + 542 and scrap it (MB1A + 551) or adjust stock level via physical inventory project
Regards,
Csaba

Trading with Sub-Contracting Scenario

Dear All,
I have one requirement of Traded Material Scenario, where the material is delivered by Sub-Contractor directly to Customer.
The details are -
Sub-Contractor delivers material A to customer.
The material A has BOM maintained, where component B is maintained in the BOM.
My company purchases B from another Vendor & which is again directly supplied to Sub-Contractor. Sub-Contractor processes the component B to manufacture material A & delivers the same to my Customer.
The following issues need to be addressed -
1) Item category is L in Sub-Contracting, where as it is S in Third Party scenario. How can I have two item categories in same line item of Order.
2) Excise paid by Vendor (supplier of component B) can be availed by Sub-Contractor as set-off & I have to debit the same to Sub-Contractor, as payment to Vendor for component B is done by me.
3) Excise paid by Sub-Contractor is to be inventorized at my end (as it is cost to me) & can be availed for set-off by the customer.
Can anybody has any input for this?
Regards,
Prashant

I think this process was earlier called as 52 A operations.
This is what we had done 52A did not have requirement of jobwork challan)
1: Create the Subcontractor' Location as a "non excisable-Plant " in SAP.( The subcontract vendor was supposed to maintain his own excise records)
2.PO for raw material /Component will be raised from Subcon Plant .
3.The Excise in the PO will have to be configured as a Condition similar to VAT Deductible(so that during MIRO it is sent to another GL account for tracking and further FI-debit note to recover from jobworker )
4. The Production of the Main FG can be shown by Subcontracting PO .
5. There has to be another Virtual Plant ( A RG23D registerd depot normally) which will depict your companys local office near the Subcontractors Location , as the Final SALES Invoice should be from your companys Name.
6. Goods will first be sent by a STO to this Virtual Plant , here in This STO you can also add the Excise Duty condition types for Inventorization purpose.
7. Create Sales Invoice (and if RD23D then Depot invoice) from your Virtual Plant .( Excise invoice will be created by the subcontracting vendor , against which your customer can claim Modvat)
I have mentioned the Process above , for config settings of each process you can check many threads here in SDN.

Interplant sub-contracting scenario

hi,
how to set-up inter-plant sub-contracting.
from plant-1 materials will be sent to plant 2.
In plant -2 processing will be done and send back the finished goods along with scrap if any to plant-1.
pl explain the scenario in detail - step by step (with T,codes) if u know the solution.
thanks
mohan

In plant A for material M1 (finish) define with special procurement key (stock transfer from plant B) in MRP2 view from plant B. (If it is MRP relevant)
I am sure you know the config of Stock transfer
Create the sub contracting PO as like out side vendor for plant B (make sure you have created the Plant B as vendor also and plant A is customer also and all config has been done for STO.) with second line item for the scrap if you are systematically do otherwise just receive with 501 movement
Then follow the same process as regular sub contracting process

Internal Sub-Contracting Scenario

Hai Friends,
Please explain me the scenario of internal sub-contracting process.
What is the settings required in SAP ?

Hi Parachuri,
    The Subcontracting process is used for the processing of the material components issued to s Subcontracting vendor, inorder to manufacture a product.
Process cycle:
1. PO creation
Use item category--> L
Taxcode --> zero taxcode
Enter the components of the material manually, if the product material doesn't have the BOM created.
2. Transfer posting to issue the material to the subcontracting vendor. Tcode--> MB1B
USE MVT. TYPE --> 541
POST THE DOCUMENT
3. FOR EXCISEBLE MATERIAL,CREATE A SUBCONTRACTING CHALLAN USING TCODE --> J1IS AND W/ REF TO THE TRANSFER POSTED DOC. NUMBER.
4. GOODS RECEIPT
NORMAL GR WITH REF. TO PO AND MVT. TYPE 101, ENTER THE RELEVANT CHALLAN # IN THE POPUP WINDOW.
5. TCODE--> J1IFQ
   RECONCILE THE QTY.
6. TCODE--> J1IF13
   COMPLETE THE CONFIRMATION PROCESS OF THE RECONCILED QTY.
7. TCODE--> MIRO
   INVOICE PAYMENT FOR THE VENDOR
Thanks & Regards,
Amjad

Regarding Sub-contracting Scenario

Hi Experts,
I had scenario in Sub-contracting, Im purchasing the raw material from X vendor and send the same material to the sub-contracting vendor- Y for drilling the material. After receiving the Main Component (material) from the sub-contracting vendor- Y, we are doing the quality check. Now the material is in damaged, I want to send the damaged material to the X vendor (ie. To the purchasing vendor). How to do that?
Regards,
Sudhakar

Hi Sudhakar,
What's your opinion about this:
1.
You received materialB from vendor 'Y'. It is damaged > you can send back the goods via MVT 122 (component materialA that is purchased from vendor 'X' will go back by MVT 544 to vendor 'Y').
2.
Then you can book materialA in MB1B from vendor'Y' to your plant and then from your site you can make a return delivery (MVT 122 refering to the original PO / or MVT 161 w/o PO ref.) and send the goods to your vendor.
3.
Then you can get materialA of good quality from vendor 'X' and send it to vendor 'Y' and get materialB of good quality from vendor 'Y'
This process is when the damage is due to vendor 'X'. If the damage was made by vendor 'Y' you can apply process 1 and scrap materialA from the special stock of vendor 'Y' and ask them to pay for the damaged goods (you have to negotiate how to handle this issue).
What is the real physical process? We should know it to be able to give a good hint.
BR
Csaba

Job Work (Reverse Scenario of Sub Contracting)

Hi Everybody,
Here is one scenario, I am sure, it will be mapped in Standard SAP, the scenario is like i am a job worker, I take the raw materials from the customer and create production order and use those raw materials supplied by the customers and charge the labour in the sales order, some times i even use some components from my stock for that also i will charge to the customer in the sales order, this is just opposite to sub contracting where i m purcahsing the labour and sending the raw materials out, this is the reverse i m taking the raw material and selling my labour, so i m basically the sub contract vendor
I want to take these material in my stock without value, at the same time i cannot create this materials as non valuated type as these material are used as valuated in other plants
If any one have any suggestion how to do in standard sap please let me know
i have one idea of vendor consignment, (Stock type K) but i m not sure how to map from sales order to production order, than take the raw materials from customer and use in the production.
If have any doubts about the scenario let me know
Thanks in advance
Edited by: Husain Husain on Feb 24, 2009 7:31 PM

Hi Everybody,
Here i have one scenario, I am sure it will be mapped in Standard SAP, the scenario is like my company does job work( Reverse subcon) for others, we take the raw materials from the customer and create production and use those raw materials supplied by the customers and charge for the processing in the sales order, some times we even add some components(Products) from my stock for that also i will charge to the customer in the sales order.
We are only billing for additional components and processing & Packing charges.
Please tell me, how can i map the scenario whether i have to create to separate sales document for selling product and processing charges. Selling product case even store issue components to products therefore no delivery.
If any one have any suggestion on how to do in standard sap please let me know.
If any doubts about the scenario please let me know.
Thanks in advance
Prashant

Sub-contracting scenario

Dear Gurus,
We have two manufacturing units,one is an EOU(Export oriented Unit) and the other NON EOU unit.
We get an export order (subcontracting order) for the EOU from a client in country X. Some of the processing is done in the EOU, and then sent to the Non-EOU.
How can I map the material movement between the two units?
Note: The material is maintained as a non-valuated material in both the plants. Since it is maintained as non-valuated, we cannot create a sub-contracting PO when sending the material from EOU to Non-EOU plant.
Regards
Ram

Hi,
I think you are speaking about two subconracting POs:
- one subcontracting PO was issued by your client to your company
- second subcontracting PO is becasue your company manages the production between the business units --> I think you are asking about this
Do the business units belong to the same company code (intra-company process)? If yes, there's no point in speaking about subcontracting.
Re: plant to plant subcontract
Even if it is inter-company (cross-company) process you shoul be able to send non valuated material (component) to special stock (OSS note 80267) via subcontracting PO or you can use STO (as in case of intra-company).
Please specify your question if my answer is not relevant.
Regards,
Csaba

Reconcilation problem in sub-contracting scenario

Hai,
In sub-contracting process
after receiving GR, i have gone for challana reconcilation, where i am getting one error "challana material number is different from material document.
please help me out

hi
plz check ur fiscal year
what ur using
ask ur fi consultant
regards
kunal

Out and Out Sub Contracting scenario

the process is :
1) Create Standard PO for component material on Vendor A (in delivery address tab, entering Sub con vendor with tick)
2) Now doing GRN for the above PO, the material is received directly at vendor location.
3) Sub Con PO is created on the subcon vendor.
4) As the component material is already with sub contractor no transfer posting (541) is done .
5) Now we have to create sub contracting challan (J1IF01) which will go to subcontractor from the plant.
6) Now the issue is with what reference shall i create subcon challan in J1IF01.
System allows J1IF01 with ref to transfer posting doc only.
Please suggest.

As material is directly going to subcontractor from vendor, you don't need to create 57F4 challan for the same.
Challan needs to be generated if material is going from your premises.
If you want to provide the challan to your subcontractor, then you have to take the raw material into your premises first(MIGO), then MB1b-541 & then J1IF01.
Regards,
Piyush

Sub-contracting with chargeable component.

Hi All,
I am doing following scenario
Scenario: Sub-contracting with chargeable component.
Activity: Clearing (Consumption-Based)
T Code - /n/SAPNEA/JSCR19
Amount: 23,100,000
While action posting, we are getting following error message
Error Message: E The difference is too large for processing
Kindly suggest where to do necessary changes in the system.
Rahul

Hi,
This procedure provides the way of manual payment for Subcontract expense.
I want to clear Accrued revenue by deduction AP using T code /n/SAPNEA/JSCR19
While posting, I am getting error message Amount too large to clear", maybe the system set the limit for the tolerance value for clear document. Please suggest me, where to change the settings.
Rahul

Sub contracting CIN scenario

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