Subcontracting in sap

can anybody give a brief introduction of suncontracting

hai!
Will u raise any bill for ths. i mean ur child cmpny to parent cmpny.?
1. Receive the items to your child cmpny through GRPO or GR
2. Use Production Order cycle to do FG.
3. Define BOM or use Special Production
4. Transfer to the Sub- contarct warehouse through Inv.Transfer.
5. once after processing over, book inv.Transfer to you good down.
6. Use Goods Return or GR to issue the item out to parent company.
hope it gvs u a starting..

Similar Messages

What is Standerd Process of Subcontracting in SAP B1?

Hi experts,
I want to know standard process of Subcontracting in SAP B1?
as i know only the scenario that i have production of chair and i want that chair to give for subcontracting to vendor and again receive that chair and sale it
so how this process is done in SAP B1.
please help me

Hi,
Try this way:
1. Create item master for chair
2. Create item master chair-sub-con without selecting inventory and sales item
3. Create PO for chair-sub-con item to send to vendor for processing and receive item through GRPO.
4. You should have work instruction to follow sequence of operation ( You need some add-on for this)
Thanks & Regards,
Nagarajan

How to handle sub subcontracting in SAP B1 ?

Dear all,
How to handle sub subcontracting in SAP B1 ?
Let me explain in detail,
My client doing sub contracting work for parent company,raw material is actually received from parent company
thru 57F4 challan,raw material sent for further processes in my client company and later converted material
is sent to a sub contractor for finishing thru 57F4 challan,after finishing material is recieved by client company,
send it once again to parent company.In this process raw material is received as X and send it to parent company as Y.
My question is, How to handle sub sub contracting items stock ?
Expecting u all valuable ideas / suggestions.
Jeyakanthan

hai!
Will u raise any bill for ths. i mean ur child cmpny to parent cmpny.?
1. Receive the items to your child cmpny through GRPO or GR
2. Use Production Order cycle to do FG.
3. Define BOM or use Special Production
4. Transfer to the Sub- contarct warehouse through Inv.Transfer.
5. once after processing over, book inv.Transfer to you good down.
6. Use Goods Return or GR to issue the item out to parent company.
hope it gvs u a starting..

SUBCONTRACT SCENARIO, SAP MM

I have requirement from client -
my company issue raw material to subcontractor for processing. 1] Vendor1 processes oper. 01 it and directly sends it to another subcontractor for next 2 operations.
This process is done to reduce extra cost.
After completion process 2, Vendor NO 2 delivers semi finish material to my company.
Can we configure it in SAP? please explain in detail, that how it will work in SAP MM?
Thanks in Advance !

Hi,
It can be done in SAP. You need to perform the following steps,
1. Create Po for subcontracting Vendor 1 and in delivery address tab , you can find a vendor tab and SC vend where make the tick and give the subcontracting vendor 2 and save the PO. And do goods issue to Vendor through ME2O transaction.
2. Once the operation 01 is complete the vendor will directly deliver the goods to Sub-con vendor 2 and where they will perform the remaining operations.
3. Do GR against the PO and complete the first cycle.
4. Create an another PO to sub-con vendor 2 and do goods issue through ME2O.
5. Do GR against the second PO and complete the whole cycle.
Regards,
abi

Subcontracting in SAP IS-RETAIL

Could anyone guide me for process setup and to do config. in sap is-retail in hardware business for sub-contracting.
my scenario:
we will be sending tiles( larger size) to vendor and he is cutting into number of pieces(smaller size) and giving back to us.
we want to show GOODS ISSUE to larger size tiles to vendor and getting back with smaller size vendor thru' GOODS RECEIPT. our solution architect provided solution that sub-contracting is the best way to go ahead for this scenario.
How we can handle this?
Could you pls provide process and config in detail.
Thanks in advance.

Though I do not have direct exposure to IS-Retail, but the processes do not vary much depending upon which IS is it. Processes vary depending upon the customer's end needs. i.e., Mostly on reports you want periodically.
As far as Materials integration is concerned, this might not be required if you want only cost and no other integration requirements are there. I'm hinting at an alternative method of counting the spares cost using Measuring Points as Counters (Count Backwards tick) etc. For cost computations of your reports, you'll be taking the MvgAvgPrc from MARA table. Why I'm saying this is because, your Asset database does not seem to be big.
Rest as I hinted usual process of
1. Notifications (for BDn recording or Preventive jobs Scheduling)
2. Catalogs and Coding (for Defects, Causes Activitiy recording during BDns)
3. Measuring points (Health records of your Assets)
would be there.
(You can use even Catalogs & Codes for spare parts consumption records if the spares database is not much).
Jogeswara Rao K

IST OPERATION SUBCONTRACTED WITH REFERENCE TO ORDER

Hello SAP Experts,
i am doing operation subcontractiing. My first operation is subcontracted. So, I have assigned PP02 control key to first operation and maintained external processing data for opration in routing. When i saved the order, for that operation PR gets generated.
Now, I converted PR into PO and assigned raw material that has to be send to vendor. By 541 mvt. type material is issued to vendor. When i do goods receipt in MIGO, system is not showing storage location field. I dont find material in stock anywhere.
But i can see quantity received in external processing tab of first operation in routing overveiw in order.HERE P.O is generated with reference to order.& it is in cost center.while confirming the second operation system will ask for storage location of material received from vendor.it ie not seen in mmbe.iam creating new code and it is assigned to second operation .
Then how can i issue the material from storage for second operation if it is not in stock?
How can i get stock of subcontracted material by MIGO?
Please help me.
regards,
RAHUL

Hi!,
When you say operation subcontracting, in SAP it is considered as a service you are recieving and hence there is no material movement involved in that because you are sending a WIP material and recieving a WIP material back. But as per indian requirements whenever a material is sent out side the factory premises, you need to send a challan alongwith that. To print a challan you need to have a material movement. This movement (541) happens in normal material subcontracting but not in operation subcontracting. To generate a material doc, you can send the raw material with 541 movement but on GR of the processed material just reverse that movement so that raw material will again come in the stock. Then issue that raw material on order with 261 movement.
I hope this will help in resolving your problem.
Regards,
Uday

Types of subcontracting

dear gurus,
            what are all the types of subcontracting in sap?how it has been mapped in standard sap system?
           what is mean by internal and external subcontarcting/
     in which subontracting we will be using special procurement key 30 for subcontarcting
                                                                   -gideon

Many Organizations will outsource few of its Manufacturing, Finishing, Packaging operations to external vendors. These vendors are called as Sub contractors. These Subcontractors are charged for the services they have provided through their operations. There are different kind of Business Scenarios that are operational with respect to Subcontracting. The choice and applicability of a particular scenario depends on different parameters. Some of these Parameters are:
Does the company manufactures the Raw Materials required for manufacturing the finished products at its own facilities or procures them from external vendors
Inventory of Raw materials at own facilities
Lead times at sub contractor location
Procurement Lead times from the external Vendor
Logistics (Distance, cost, etc) planning wrt to Sub contracting Vendor
The Raw materials provided to Vendor are normally termed as "Material Provided to Vendor". This stock is physically located at Vendor location but is owned by the company itself. This stock is treated as consumption only when the finished products are received into the Plant.
You use the special procurement key as 30 in the MRP 2 view of MM of the material which is subcontracted.You can specify the plant from which this material is procured in customizing.You can also create your own special procurement type.

Posting Subcontracting PO with BAPI_GOODSMVT_CREATE

Hi Guru's,
I'm using the BAPI "BAPI_GOODSMVT_CREATE" to do the GR using Purchase Order.
For Sub Contracting PO also we are using the same BAPI and we are doing it successfully, but my requirement is when we do the posting for subcontracting, the SAP system automatically creating the 2nd line item and doing the movement with the same amout of the quantity of the first item.
In Standard SAP, we have an option to enter the 2nd line item quantity, is there any option like that is available in this BAPI??
Or is there any enhancement option / BADI option to change the quantity of the 2nd line item when we posting the document???
Thanks,
Adi.

Hi,
Thanks for your link, but i know how to use that BAPI (Passing Parameters),
i want to know the Exit/Enhancement point where can we change the 2nd line item quantity while doing MIGO with the BAPI
BAPI_GOODSMVT_CREATE.
The system is automatically calculating the Quantity for the 2nd line item and doing the 543 movement.
I want to change the quantity in 2nd Line of PO.
Thanks,
Adi.

Customer's Subcontracting Stock

Hi friends,
I need to take the Customer's subcontracting mateial in my SAP system, howcan I take the goods in system and what will be the further process uptill delivery to customer.
Please suggest the solution.
KRaheja.

Dear,
In subcontracting, vendor receives the components used to manufacture a finished product. Your company then orders the finished product in a purchase order. The components required by, and subsequently provided to, the subcontractor to manufacture the ordered product are listed in the purchase order. A bill of materials is used to determine the required components.
In simple, subcontracting is the process in which a material or product consisting of certain components is procured from a vendor, where by these components are provided by the ordering enterprise, either directly or through a third party (another vendor).
The material subcontractor is to manufacture can be requested in a purchase requisition and ordered via a purchase order or scheduling agreement item category L (Subcontracting). Item category L enables you to create sub items covering the components to be provided to the subcontractor. The components can be entered manually or through a BOM if already exists for the ordered material.
The goods receipt for the requested material posted with reference to the subcontracting item. At the same time, consumption of components also posted.
Check stocks of material provided to subcontractor:
LOGISTICS u2013 MM u2013 PURCHASING u2013 PURCHASE ORDER u2013 REPORTING u2013 SC STOCKS PER VENDOR
You can store conditions and enter vendor dependant purchasing data in subcontracting info record or in outline purchase agreement (contract or scheduling agreement).
For an outline agreement with item category L, the fact is that you do not enter the components until you create a contract release order. Similarly in case of scheduling agreement, the components are pulled at the time the delivery schedule lines are created. In both cases the BOM is advisable. In quota arrangements you have to enter special procurement type L.
If you change the PO or scheduling agreement quantity, the quantities of components also changed proportionally u2013 provided that fixed quantity indicator has not been set.
If you change the delivery date, only the date on which the components are required are recalculated.
The item category L has the following effects:
The PO item can be created with or without a material master record. If a PO item created with material number, specification of an account assignment category is optional.
The indicators for goods receipt and invoice receipt are set on the basis of the Purchase order item Linked indicator.
The GR indicator cannot be changed. This means that a goods receipt must be posted against the purchase order. However the IR indicator can be unset.
The indicator for non-valuated goods receipt is not proposed; neither can it be set manually.
http://help.sap.com/saphelp_dimp50/helpdata/EN/bc/5bba42a75fc611e10000000a1550b0/content.htm
http://www.sap-basis-abap.com/pp/subcontracting-in-sap.htm
http://www.sap-img.com/materials/sub-contracting-cycle.htm
http://www.sap-basis-abap.com/sapmo005.htm
Regards,
Syed Hussain.

Subcontracting between intracompany plants

Hi All
Can anybody tells me the configuration required for subcontracting between plants belogs to same company.
Suppose A Plant sents material for job work to B Plant which, belongs to same company. We have created a vendor code for plant B and send the material thru subcontracting cycle. Now problem coming with Plant B. How Plant B prepares the invoice and stock reduces from Plant B.
Needs Config setting.
Thanks
Asim

Hi
there is no standard scenario for Plant to Plant subcontracting in SAP
we have faced the same problem and now doing the same STO for Plant to Plant Subcontracting
what SAP suggest Do STO (Intraplant)
there is no other solution
all configuration is same for This scenario
Thanks

Subcontracting procedure material wise

HELLO SAP GURU
Today i have implement SAP on TEXTILE industry.& has M-T-O (20)strategy &has 22 plant.
my problem is abt.subcontracting.
this has 4 production line.1 warping 2.sizing 3.weaving 4.QI
In 3rd prd.line has get subcontracting procedure.
But it has 21 vendor (21plant) has same type of machine only different has very speed(RPM)
For my sales order point of view. I use one day 2 machine, next day 5m/c.on next day 10machine
But every machine has different OWNER.ie.different vendor
so how to calculate efficiency of different machine
main problem is
HOW TO DEFINE SUBCONTRACTING PROCEDURE?
Give me detail abt supplying plant & receiving plant.
yogesh
sap pp

hi yogesh
check following line may you use it
step1:-
Subcontracting In SAP
Bel ow are the steps of subcontracting:
1. For a production material (1001), one raw material (2001) is assigned.
2. Production process of 1001 is having four operations 10, 20, 30 and 40.
3. In this 10, 30, and 40 are internal operations and 20 is external operation (sub-contracting).
4. To address this, we created a dummy material (non-valuated) and named as 1001-20 (Finished product number + Operation to be performed).
5. This 1001-20 should form part of the component in BOM of 1001. That is BOM of 1001 will have components as raw material 2001 and this dummy material 1001-20. In routing, assign this dummy material 1001-20 to operation 20.
6. During BOM creation, you should remove costing relevancy for the item 1001-20.
7. In routing, operation 20 is created with a work center (which is external operation work center) with external operation control key.
8. In operation details, for external processing, assign the info record of external processing.
9. Info record of external processing has to be created for vendor with relevance to the operation to be performed externally with vendor. (We are using material group field in the external processing in routing operation).
10. When create production order with above set up, system will create Purcha Req for external operation. This has to be converted to purchase order.
11. Now, this dummy material should be kept as 5000 or 6000 in stock using 561. When Purchase order is raised, required quantity has to be moved to vendor using 541. When we do goods receipt the stock with vendor shall come down. With this, we can monitor the material (with dummy material number) stock with vendor (please note we can see only quantity and not value) .
12. When we do GR for external purch order, we receive only the operation performed. (So, coversion cost to vendor shall be paid).
13. After ensuring GR is done, order confirmatin of operation 0020 has to be done. (here we capture the quanttiy and also the valuation of material in production order).
step_2
1. Define all the materials in your plant (subcontracting and packaging etc).
2. In the material master MRP 4 view there is one field in which you can mention that this material is not relevant to MRP planning, use this field for subcontracting material so that it will not be planned in MRP runs ( generally use this field for re-order point planning).
3. In the BOM for the subcontracting material put the special procurement key as Subcontracting and do not keep relevance for costing.
4. If you're using packaging material of your company and want to capture the cost of these materials in the subcontracting production order then put relevance for cost.
5. Define alternate BOMs for each customer.
6. Generally the routing will be the same but materials will change, define different prodcution versions for each alternate BOM and assign to the routing.
7. Define the activite types for packing and mixing in the work center and assign them to the cost center, use these for your routing.
8. Whenever you recive a sub-contracting order, use the relevant production version depending on the customer.
In my place all the palnts belong to the same client in sap and they want to use the same material code in both plants, so I think my subcontracting scenario might be different from yours but it give you some ideas to go about it.

JOB WORK CHALLAN - CONFIGURATION related issue with client .

HI FRIENDS ,
CLIENT PROCESS
STAGE 1: CLIENT SENDING THE SEMI-FINISHED MATERIAL UNDER JOB WORK CHALLAN ( 57-F ) TO JOB-WORKER.
LET SAY 1000
STAGE 2: ONCE JOB-WORKER RENDERING (AFTER POLISHING-CLIENT REQ ) THE MATERIAL ,THEY WILL INTIMATE TO THE CLIENT BY MAIL OR PHONE.
LET SAY 500 ON 1.1.2012 , 500 ON 2.1.2012
STAGE 3: CLIENT RAISE THE INVOICE AGAINST CUSTOMER DEPENDS ON MATERIAL QUANTITY . AND SEND IT THROUGH MAIL TO JOB-WORKER.
STAGE 4 : JOB-WORKER DELIVERS THE MATERIAL TO CUSTOMER DIRECTLY( NOT TO CLIENT PLACE) ALONG WITH CLIENT INVOICE COPY.
STAGE 5 : JOB-WORKER UPDATE THE CHALLAN & RAISE THE INVOICE AGAINST THE SERVICE TO THE CLIENT .
REQUIREMENT :
1. HOW TO MAP THIS PROCESS IN SAP IN DETAIL?
2. HOW TO SHOW THE INVENTORY IN CLIENT'S PLANT?
3. DOES IT COMES UNDER RG1 REGISTRY(WHAT ARE THE DOCUMENTS NEED TO UPDATE )?

This is very sorted out topic.
You can find lot of link, which you can search with search term "JOB WORK".
Have look on some of the links, which I can suggest:
- SDN Article on [Direct Subcontracting Process (SAP SD & MM)|http://www.sdn.sap.com/irj/scn/index?rid=/library/uuid/d0dbde93-6fa4-2c10-edb9-e477fa85b232]
- subcontracting
- Job work in SD subcontracting.
- SD - Subcontracting
Follow following path in IMG for Subcontraction Configuration:
SPRO - Logistics General - Tax on Goods Movements - India - Business Transactions - Subcontracting - Subcontracting Attributes
There Excise TT to follow is 57FC.
Regards
JP

Subcontractin by process order: ME2O

Hello everybody,
Im implementing subcontracting by process order.
I feel very unsuitable with the transaction ME2O that we use to post GI to the vendor.
The problem is that we need insert the code of every components that we send.
As an alternative, we can insert just the vendor, but in this case we get a lot of material in output.
The problem is overall that, if we send material managed to batch, we need insert the batch number.
All this is very bad because add a lot of steps to the operator job.
Is there the way to get in ME2O with the process order number or simplify any step?
Best regards,

Dear,
There are two ways of subcontracting in SAP...opration subcontarcting and material sub contract
Operation sub contract in process order - Tick the sub-contracting box in Routing. This will not create Subcontracting PR during MRP run. This will create PR during Production order release or that particular operation is released.
- In the above case, after the first operation if you are sending it to contractor then there will be any entry in Inventory management as it is not material subcontracting it is only SERVICE subcontracting i.e. this particular operation is subcontracted. This procedure is followed when contactor is working with in your company premises.
Material sub contract - The procedure you are talking about the material subcontract...the procedure is as below
Let us say you have a final product C.
C needs B
B need s A
A needs raw material X and Y
In the above case
C and B is having routing
In A material master MRP2 view....enter special procurement key as subcontacting(in STD sap the key is 30), procurement key = F
A has a BOM having items X and Y.No routing for A
When youn run MRP
System will create Pl order for C and B, SUBCONTACTING PR to A and PR to x and Y
After you procure X and Y, You can convert PR of A to PO.
Then you will send the material i.e. issue the material to subcontractor through 541 and special stock O.
This stock you case see in MMBE with special stock O.
Once you receive the material A, when you do GR, the materials are issued to A and A will be inventarised with mov type 101.
The cost of serve and the cost of raw material is booked to cost center entered in subcontracting PO.
The cost of this will be settled to production order later.
I hope it is clear.

Raw material consumption - subcontrat process

I got a PO to investigate why raw material consumption is not posted in subcontracting scenario
When i investigated i realized that user might have unticked 543 movement line in MIGO while posting Goods receipt of finished product ..
Invoice is already paid for this PO vendor
All postings ok except consumption of raw material.
Only Consumption of raw material cant be posted manually isnt it
How we correct these instances ?
I can think of below, suggest if any better
1. Credit memo
2. reverse GR for finished product
3. post GR again correctly checking 101 and 543
4. Invoice

Dear
Below link will help you
http://wiki.sdn.sap.com/wiki/display/SCM/Subcontracting+Process
http://www.sap-img.com/materials/sub-contracting-cycle.htm
http://www.sap-basis-abap.com/pp/subcontracting-in-sap.htm
http://www.sap-basis-abap.com/sapmo005.htm
http://sap.ittoolbox.com/groups/technical-functional/sap-log-mm/subcontracting-process-in-mm-2179995
Regards
Aamir

Regarding maintenance and quality

Dear all,
can any tell me is it possible to handle activities like quality control, plant maintenance, machine down time and subcontracting in SAP Business One with help of any addons which will work for Indian manufacturing companies
regards
swapnil

Hi Swapnil,
There are addons available for this...you need to check out thru the net extensively.
1. Preactor.
2. Fast.
3. Microshop
Nagesh

Subcontracting in sap

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