Subcontracting in SD scenario

Dear Gurus
We are in need to know if there is a standar scenario for subcontrating in SD. That is, we recieve materials that after a production process we sold to the client.
Thanks in advance,
jose

Hi,
Of course, if you want to do it, you should have the following master data in your system:
1. New material type of component provided by customer or use the standard material type UNBW, which only has the stock without value in the system;
2. Maintain the BoM with the subcontracting components which only have the stock quantity, no value.
Then use the free GR (movement type 511) to receive the components from customers, then do the normal production process, and sales process is normal operation as well.
Cheers
Tao

Similar Messages

Subcontracting in MTO scenario.

Hi,
We have an MTO sales order against which we are raising a subcontracting PO. At the time of goods receipt, movement type 101 'E' and 543 'O' has triggered. 3 controlling entries have taken place:-
1. Cost for Goods issue to subcontractor is debited to PSG. (543 'O')
2. Credit for goods receipt from subcontractor is credited to SDI. (101 'E')
3. Service charge for subcontractor is debited to SDI.
The above entry has happened only once and is leading to excess credit on the sales order.
When we replicated the case in test environment, we found that all the costs have gone to PSG (as per OKB9). The movement types are the same as before.
We replicated a case where we triggered 543 'E' instead of 'O' and the costs are still going to PSG for all the entries. This was done by changing the 'individual/collective' indicator in material master. I believe this is the recommended SAP setting for subcontracting in MTO scenario as per following link.
Subcontracting for Sales Order Stock and Project Stock - Managing Special Stocks (MM-IM) - SAP Library
Can anyone explain when does system overrule OKB9 and take sales order as cost object?
What can be the probable reason that system is behaving differently for only one occassion?
Is there any other indicator in material master that I should look for?
Can I look at OMJJ for possible causes?
I know this has been asked several times on the forums before but I have not been able to explain above situation. So thanks in advance.

OKB9 is only functional in the case where a "cost object" has not been assigned to a P&L transactions. That's why it is called "Default Account assignment". In the Case of your MTO, the sales order is really considered as the cost object and hence would take precedence over other default...once a cost object is determined, any further assignment of a cost collecting object becomes statistical depending on the type of cost objects. Basically cost objects have precedencies: I believe Sales order, internal orders, Cost center, etc in that order. Meaning, when 2 are assigned, the one in the lower order become statistical. In any of these cases, OKB9 takes a back seat. OKB9 only comes to play when the internally generated accounting entries will result in no cost object assignment, then SAP looks to see if you have a reference maintained in OKB9.
Basically, for your MTO, the sales order (an maybe the cost center, etc assigned the to sales order) becomes the cost holder. OKB9 will not feature.
OMJJ will help you simulate the goods movement and see how the accounts are derived/cost assigned. If OKB9 features, you will also see it referenced. But I don't think it will, unless your goods movement results in an accounting entries that internally does not reference the sales order, then OKB9 kicks in.

Subcontracting and PPV Scenario

HI Gurus,
I have a scenario where I cant find a feasible solution.
- Assembly A consist of Engine E and Component C
- We buy the Engine E from Vendor A in and get shipped to Vendor B in for Assembly so we get the invoice for it and we pay them
- Vendor B uses some components c AND Assembles and ships it as Assembly A and he send the invoice for Assembly and components
- In our system Assembly A has a std cost of 100 and Engine E cost 50 dollars and Component C cost 35 dollars
Sol -1
I can create 3 different purchase orders separately so everything will be resolved.
sol -2
One PO for Engine for Vendor A and other PO for Assembly and have the po price as assembly price 35 dollars from vendor b because thats what the vendor sends the invoice for but this one hits the PPV and i dont want the PPV.
Is there any other solution that could possible be easier to run this process down/
Any help would be appreciated.
thanks

I presume that your PO with vendor B is subcontract PO where-in consumption of Engine is working fine, but the component C is not working fine hence this issue.
Does your BOM includes Component C, if so how the related inventory is handled. Provided inventory of Component C is not handled by your company then this is typical tolling process solution for which SAP doesn't have standard solution. So you have to go either pick Sol-1 or create a user exit solution to get your account postings correct.

PO number and material issued against this PO for subcontracting

How to know the link in between the PO number and material issued against this PO for subcontracting.
I have checked that PO history is not getting updated.
Thanks,

Hi,
We have 2 different scenarios where you can post a goods issue to Subcontract Venodrs.
Scenarios 1: You can post the goods issue against a subcontrac vendor with out referencing the Subcon PO from ME2O, at this stage we will be knowing what is the stock at subcontract vendor but we will not be knowing the issues against which and how much Quantities are posted.
So when we are post goods receipt, then we will come to know the consuption quantities.
Scenario: 2, If we use the delivery concept then we can track the goods issues against the subcon POs.
If you really keen to track the material issued to Subcon vendor against a PO so better use with delivery.
Thansk,
Satya.

Process Industry subcontracting

Dear All,
I am having one scenario where we are having 2 plants in different company codes.
One Plant X is raising subcontarcting PO for another plant Y.
Now X has sent child components to plant Y thro 57F4 challan.
Now the issue is how the plant Y will take child component into their stock. so that they can process and sell it thro SD.
Is there any standard procedure in SAP for this scenario, please let me know.
Thanks in advance.
Regards,
Umesh

hi
make code for ur finished major product as B and other products as C D ur raw mat will be A (car )
create bom of B here pur A as main component and C and D with -ve quantity (byproduct)
like B 1 no
      A 1 no
      C -1 no
      D -1 no
then u will get C and D as by product with +ve quantity at time of final ge (101)
process will be as follows
Process Flow
This scenario consists of the following steps on goods delivery:
Purchase order creation based on a scheduled purchase requisition created by last MRP run
Optional: manual purchase order creation
Purchase order approval (if required)
Components of the Material sent to the subcontractor through a Transfer Posting
Creation of Subcontracting Challan
This scenario consists of the following steps on goods receipt:
Goods receipt for purchase order delivered by subcontractor
Component reservations and consumption of component quantities as provision of material
Reconciliation of Challan
Completion of Challan
Invoice receipt by line item
Invoice verification and validation of tax expenses
Outgoing payment
hope it clears
regards
kunal

Subcontracting Quantity reconciliation

Hi, this is Sujith
Please help me with the subcontracting reconciliation. Scenario is
We order steel pipes to the vendor which they directly reaches the jobworker.
We raise the subcontracting order to the jobworker to make catridges.
For every 10mts of steel we know 13 catridges can be made and 0.25 mts is scrap.
This scrap will remain with jobworker since we dont have use with it, But we bill the jobworker for 25 RS/mtr of scrap.
My problem is:
I create a BOM
100 nos of catridges : 76.92 mts of steel (+ve) and 1.92 mts of steel (-ve).
In PO to vendor i give delivery address as the jobworker. So GRN of this PO result in the stock to the subcontractot (101 O)
When i do the GRN for the jobworker PO, the catridge will be in the stock, consuming the actual qty i give in the BOM (here 75 mts).
Rest (1.92 mts) is with the jobworker. How to handle the stock with subcontractor reconciliation per jobwork order.??
sapmmlearner
Edited by: sapmmlearner on Apr 28, 2011 2:15 PM

Hi dear,
while doing subcontracting PO make sure the component for that material will be consumed as per BOM defined in the system or actual consumption is to be booked.
1-If BOM has to be exploded then it should balance the base qty i. e if my final product is ordered for 100kg then my components should be balanced to 100kg...c1=60kg,c2=45kg,c3=-5kg(scrap).
2-If u need to adopt as per actual consumption then click on "Component" button in Subcontracting Order and put the corresponding requirement with balancing.
After this u need to transfer those components to the subcontractor through 541 movt. w.r.t the Subcontracting PO.now chk in MMBE,it will show stock provided to vendor.
Now make challan through J1IF01.
After getting the final product from subcontractor make GR so that for that 100 kg of final product the components will be automatically balanced.
Remember if the scrap generated at sucontractor is saleable then it should be made GR along with the final product.For that u need to add that salable scrap code in the next line item of Sub.PO with its corresponding Components.
After making GR then go for qty reconcillation thru J1ifq.
And at last when full qty is made GR then complete the challan.....remember for 180 days excise is not liable...
I hope u understand the Scenario.If not then Pls let me know
Thanks & regards,
Bijay Pradhan
SAP-MM Consultant

Delivery for subcontracting

Hi,
Could anyone tell me when the delivery has to be done for subcontracting and when the goods movement 541 should be used. The transaction ME20 doesnt exist when i tried to create delivery for the subcontracting PO.
Thanks in advance
Aparna

hi
the code is ME2O and not ME20
Process Flow
This scenario consists of the following steps on goods delivery:
Purchase order creation based on a scheduled purchase requisition created by last MRP run
Optional: manual purchase order creation
Purchase order approval (if required)
Components of the Material sent to the subcontractor through a Transfer Posting
Creation of Subcontracting Challan
This scenario consists of the following steps on goods receipt:
Goods receipt for purchase order delivered by subcontractor
Component reservations and consumption of component quantities as provision of material
Reconciliation of Challan
Completion of Challan
Invoice receipt by line item
Invoice verification and validation of tax expenses
Outgoing payment
Key Points
BoM explosion triggers follow-on functions such as delivery to subcontractor
Automatic posting of value flow
Automatic posting of stocks into corresponding stock types
Subcontracting info record shows added value
regards
kunal
Edited by: kunal ingale on Aug 14, 2008 7:53 AM

Multiple BOMs in subcontracting

Dear Expert,
We have one requirement,our client wants multiple BOMs in subcontracting PO.the scenario one finished product have many component raw materials.we can produce the finished product with raw materials.when doing subcontracting PO,when we explode BOM,we have choice of selecting of BOM,which we require.please sugest me.
Thanks in advance,
Varun

Hi,
Please check how to handle alternative BOMs in subcontracting:
Re: Bom for production order and subcontracting
Re: Alternative bom
You can have only one purchasing info record for one vendor/material/purch.org. combination that's why you can assign only one production version to it.
Based on this I think you cannot solve your requirement in standard system (selection of alternative BOM in subcontracting PO).
Regards,
Csaba

Issue in mapping Operation subcontracting scenario

Hi all,
I will explain my scenario of subcontracting, i am getting issue when mapping the scenario in SAP.
Scenario: For manufasturing 1 SF my client require 4 operations. All the raw materials required will be issued in the first operation. After first operation he will send the product manufactured to outside vendor and again he receives it after some value additiion. He continues the next two steps and finally manufactures SF which inturn will be used to manufacture his FG.
Configuration: I have assigned a purchase info record in the operation detail. I have not given any WC to that operation because the cost should be captured only from the purchase order during the GR from vendor. After the confirmation of the first operation i am getting a purchase requisition for operation without a material.
Issue: I am not able to show the material which he is sending to the vendor as my purchase requisition doesnot contain any materials.
Please suggest me any possible solution to outcome this scenario.
Thanx in advance
Regards,
Krishna Chandra

Hi all,
i got my the answer for my scenario by this link
http://forums.sdn.sap.com/thread.jspa?threadID=1805266
Regards,
Krishna Chandra

A subcontracting Scenario

Hi ,
In subcontarcting PO scenario please explain me the following.
I am sending x kg of material A to SC Vendor .
I am expecting y kg of Material B from SC vendor.
By product in the procedure is C.
I have maintained BOM as A material to be send A, finished assebly is B and byproducts C in cs01.
Steps Involved are
1. I sent x KG to SC Vendor . ( Explain how to issue goods to SC vendor with Movement type involved.)
2. Found that actual consumption was less than expected in BOM, So i want reverse those extra parts i sent to SC vendor.( How to reverse them and using which Movement type)
3. After completion of process i want to do GR for the Finished product XX.(How to do GR and Movement type envolved)
4.In last stage i want to recieve the by-products from the vendor.( Movement type)
5 Scrap generated in process to be recieved in companies own stock( Movement type)
5. What are various excise document which are involved if vendor sends me the finished product within subcontracting period.( 180 days)
6. What is the " Reconcillation the SC challan ? Meaning of reconcillation?
Edited by: Shreya Sinha on Dec 29, 2007 12:30 PM

HI All,
Can anybody help me regarding subcontracting. Any help would be much appreciated.
Talking about subcontracting, right now we are facing some issues.We have right now what we call dismantle subcontracting,
Scenario 1:
Normally we send material A,B,C to vendor 1 for subcontract and receive material D.now on vice versa, we want to send material A, to Vendor 1 to receive material B,C and D.
while Material B,C,D will remain in vendor site after dismantle process is done.
I know, i can input one of the subcomponent say : A in PO as a parent component then put rest of others as a subcomponent with addition negative quantity for material D.
but the problem is , a lot of subcomponent for dismantle is involved and the customer is minded if they have to put a lot of subcomponent every time they create PO(while this PO subcontract may vary every time).Any other way for resolved this objection.
thank you,
Regards,
Daniel Tan

Subcontracting Scenario -urgent

Hi all
our clients requires different scenario how would we map these into the SAP
1-We send the material to Sub contracting Vendor for Machining operation suppose 100 piece. but Vendor make the some pieces faulty (Rejection) like 10 piece.
2- by default vendor send some pieces without doing any machining operation.like 5 piece out of 100
3- Some times we issues material defect pieces to subcontracting vendor by default
4- Component we have already received but some of them are get reject on production line but component can be rectify and for rectification we send the component back to Vendor for precessing without paying anything to vendor for this rectification
How would we map these four scenario in SAP
These are the scenario please gives your valuable suggestion to map into SAP
Thanks
Edited by: JAM SAP on Feb 10, 2008 4:23 PM

Dear Jam as far as my knowledge is concerned you can refer the Subcontract Scenario mentioned below :
1) 100 Pcs sent for subcontracting ,GRN of Sucontracting PO takes Place and in Quality 10 Pcs gets rejected 90 is accepted
In this scenario -if you are having quality check then material will be in blocked stock in quality rejection,and the material can be sent to scrap(or Rejection) stores but if you dont have quality check in that case when GRN of subcontracting PO is done for that you can do 542 movement of the raw material on which processing is done ,transaction code is MB1B and you can select the scrap(or rejection) stores during that movement.
2)100 Pcs sent for subcontracting ,GRN of Sucontracting PO takes Place and vendor sends 90 with processed and 10 pcs without processing
In this scenario-you can simply do 542 movement of the raw material on which processing is done ,transaction code is MB1B and you can select the Rawmaterial (which was sent to vendor for processing) stores during that movement.
3)100 Pcs sent for subcontracting ,out of which 10 pcs of RM which was sent for processing is defective GRN of Sucontracting PO takes Place and vendor sends 90 with processed and 10 pcs without processing which are defective from our side back.
In this scenario-you can do 542 movement of the raw material-defective pcs which was sent to vendor ,transaction code is MB1B and you can select the scrap(or rejection) stores during that movement.
4)100 Pcs sent for subcontracting ,GRN of Sucontracting PO takes Place and 100 pcs is accepted but during processing it is found that the component which is in WIP which was received from subcontractor 10 pcs are not machined properly so it has to be reworked and to be sent back to subcontracting vendor for
reprocessing and this processing should be w/o charges.
Well in this case the WIP component which is found that it is not m/ced properly can be taken back into stock with 502 movement -T code-MB1C or it material to material transfer can be done ...i.e from WIP stock i am doing RM stock with 309 movement ,T Code-MB1A so that my original RM can be in stock and i can send this RM or WIP item to the vendor for reworking.
For this you will have to make a subcontracting PO of the 10 Pcs which has to be reworked with Free Item to be ticked in PO(Because you dont want the charge of processing to be given to vendor). You will be doing the 541 movement so that in system it will show that stocks are lying with vendor , Create Challan ,
T Code -J1if01 and after processing vendor will send it back .so you will do GRN of this subcontract PO and now the same can be utilised for further production purpose.
WELL DEAR FRIEND HERE IN ALL THE SCENARIO I HAVE NOT MENTIONED ABT SUBCONTACTING CHALLAN RECONCILATION (J1iFq),You will have to take care of that in each of these scenarion mentioned above.
Hope this information will be of some use to you
Regds
Shailesh

Subcontracting scenario - We are subcontractor.

Dear Friends,
The scenario is as follows:
If our company is doing sucontracting for other companies.
Our Company is using SAP.
In this case how to enter material came from customer and how to remove value added material from our premises.
As per knowledge, Incoming matl is raw material and outgoing material is finished material. We have to create BOM for this.
for all this process any body guide me step by step procedure.
Please respond to this issue. Its very urgent.
I had to run this scenario in front of client.
Regards,
Mahesh

We use subcontracting and here is that we do:
For the raw material we send to the supplier, we need to check the following:
Before of all check that exist a PO or Schedule agreement setup as subcontracting
1.- Material Master Basic Data 1:
Gross Weight & Net Weight must be maintained.
2.- Material master
Sales: Sales Org. Data 1
Delivering plant: XXXX
Tax classification code: 1 (Full tax)
Sales: Sales Org. Data 2
Matl statistics grp: 1 (Material VIS active)
Acct assignment grp: 02 (Parts, Materials etc)
Item Category Group: NORM
Sales: General/Plant
Trans. Grp: 0001 (Standard)
LoadingGrp: XXXX
MRP2
Special procurement = L1
3.-In XK03, for Vendor select Control data.
In account control field, there must be a partner number as u201876u2019 + Vendor Number.
In VD03, enter u201876u2019 + vendor number as Customer.
Sales Organization 7699
Distribution Channel 99
Division 00
Vendor number must be in Control data/Vendor
4.- We send the raw material to the subcontractor via ME2O
5.- Once the delivery is created we use the LT03 to create the transfer order and complete the stock to vendor.
6.- We create a BOM for the material that we are going to receive as "dad" and the raw that we sent to the subcontracting as "child".
7.- We create a subcontracting info record
8.- Create in out case a Subcontracting schedule agreement (Item Category = L)
9.- Once the subcontracting vendor back the finish good.. use MIGO and that will post the 101 for the finish good and discount the raw material for the stock to vendor.
Hope this can helps you.

Subcontracting Critical scenario

I have scenario like this
I doing subcontracting with subcontractor
For that we have give him 5 Machines of worth 10 laces
Against that, we reduce processing rate but
I want to know that how to map this in SAP
HOW TO send him machines in SAP &
How to keep record of this
Please suggest me its Urgent

I have scenario like this
I doing subcontracting with subcontractor
For that we have give him 5 Machines of worth 10 laces
Against that, we reduce processing rate but
I want to know that how to map this in SAP
Create your machine in SAP as asset and then create same as dummy material and send to the subcontractor so that way you can keep the track of material as well as you can take depreciation also (as per accounting prospevt)
HOW TO send him machines in SAP &
Dummy material - issue to subcontractor (Machine)
How to keep record of this
this is regular tracking of material report
Please suggest me its Urgent

Subcontracting Scenarios (Urgent)

Hi
I want to map following scenario in subcontracting (viz different from normal case) and need ur suggestions..Please reply on bold points...Matter urgent
1) MRP will be run based on data from DM & S.O. MRP result will generate purchase req for raw materials..*I want to have an good overview over the demand so as to judge the exact purchasing quantities...How to do this?*
2) Based on PO; GR will be done for the raw materials in storage locations. I want that raw materials which are for subcontractor should only go to subcontractor stock......(Currently we dont have QM view in MM)
3) Quality control must be done for each goods recieved based on inspection sets
4) Now when raw materials will be forwarded to subcontractor; +i need shipping documents (delivery note + customer invoice) and transport order which can be sent+
5) Lastly when i recieve finished goods; they should undergo quality check like incoming materials
Please give ur comments
Rgds
Edited by: Vicky Khabrani on Feb 7, 2008 1:45 PM

Hi
When creating the Material Master, add the QM view also. As told in the above views, create an Inspection Type 01, tick check box Active, tick the check box Post to Insp Stock, 100% inspection, and remove any other ticks in the check boxes.
When doing GR, goods will be directly posted into the Quality stock. An Inspection Lot will be created. you have to give a UD for this Inspection Lot in t.code QA11. Take the Inspection Lot no. from the GR document. or in QE52, you will get the inspection lots displayed.
Pick up the required one, give the UD as accepted or Rejected. If accepted, put this into the unrestricted usage in the next tab of the same UD t.code.
I hope this information is clear
Regards
Chandra

Please help with subcontracting scenario............

Hi All,
Can anyone please help me in dealing with subcontracting scenario with scrap taken into account. Please provide the screen shots from BOm creatio to challan closing. the requirement is urgent. please help me. all replies will be suitablly rewarded.
regards,
vvr sharma

Sub Contracting Cycle
(1) You have a material that can be procured externally, and you have maintained BOM with components. Any waste generated and received during subcontracting process can be maintained as component with negative quantity.
(2) You create a subcontracting PO (PO with Item Category L). You can also maintain Purchase Info Record for Subcontract category for material and subcontractor.
(3) You make a transfer posting to issue components for SC PO. Material is sent to subcontractor. As material remains under your ownership, system does not make any value entry. But quantity is shown as "Material Provided to Vendor"
(4) You receive finished material against SC-PO. You also specify components consumed in manufacturing of finished goods. Additionally, if you have negative components in BOM, now you'll also receive subcontracting by-products. There are three events, so three accounting entries are generated:
DR FG Stock/ SC By-Product Stock
CR Change in Stock (FG/ SC By-Product )
(for finished goods received)
DR Subcontracting Charges
CR GR/IR Clg
(for moneys payable to Subcontractor)
DR Consumption (Components)
CR Change in Stock (FG/ SC By-Product )
(material provided to Vendor is now charged to expense)
(5) You do the IV for SC Invoice, and the process is complete.
Process of Subcontract in MM
Sub-contract business process:
You want to buy material from the supplier (processed material/ assembled item) , but for some reason (quality of certain item / price ) you will give some component to vendor .
Vendor shall process the item / use the item provided & supply the final item.
SAP process:
1.Create the finished goods material code.
2.Maintain the BOM for the material.
3.Create PO with item category as "L" .
4.Issue material to vendor with movement type 541
5.Receive the material against the PO with movement type 101.
6.MIRO to account for vendor's invoice for the service charge& material used by him.
Can anybody tell me how a process has to be given to subcontracting?
Suppose, I have 3 operations 1)weaving 2)dyeing 3)cutting & packing
if no 2 process (i.e Dyeing) has to be given to subcontracting, what process should i follow ?
The following process to be followed for subcontracting.
1. Item code(material master) to be created at the stage of before dyeing.
2. Item code(material master) to be created after Dyeing as subcontracted item.(F30)
3. Bill of material to becreated for the material(2) calling for material(1)
4. Inforecord and source list to be created for material(2) with the corresponding vendor
5. PO to be released for material (2)
6.Along with PO the material(1) to be issued to vendor
7.On receipt of material when GR is made the stock with vendor will get updated.
How to Create a Subcontract Order?
To create a subcontract order, proceed as follows:
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.
Enter the components that the vendor requires to manufacture the product.
Please note:
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:
Delivery date of the item - Planned delivery time
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 (column F).
You can determine whether the components are available on the date required by selecting Edit -> Availability check.
If you entered a bill of material as the material in the subcontract order, the components are created automatically.
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 -> Component -> New BOM explosion. The existing components are deleted and redetermined in the bill of material.
Save the purchase order.
When you print the purchase order, the components are printed per order item
Subcontracting - Key Points
Special Procurement Process.
Item category: L
Order type: NB
In info record vendor should be maintained as subcontractor.
Vendor (Subcontractor) receives the components used to manufacture a finished product directly from your company or through third party.
Your company should place a purchase order for the finished product. In this manually you can enter the required individual components or it can be determined via the explosion of BOM (if exists).
Stock check at vendor level: ME2O
Company stock check: MMBE
GR for individual components through movement type: 501 or 561 (if with out PO or without reference).
GI to subcontracting vendor: through movement type 541.
GR from sub contracting vendor: through movement type: 101
Movement type 543 is displayed to cancel the material cost account.
If the subcontracting order has to be generated through materials planning,the special procurement key has to be set in MRP 2 screen.
- To create the Subcon Info Record : Tcode ME11 - Info Category - Click Subcontracting
- To create Material BOM : Tcode CS01
- With the Info and Material Setup, you can then create the Purchase Order in Tcode ME21N
Hope this is helpful.
Regards
Ravi

Subcontracting in SD scenario

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