Subcontracting of an operation

Hello All
     Am having a scenario wherein to produce a FG there are five operations and fourth operation is subcontracted to the vendor.
     I shall explain the exact scenario here: Client is manufacturing a Brass Terminal(FG) and to produce this he requires a Brass Rod(ROH). Following are the operations being performed on the Brass Rod(ROH):
    1) Turning
    2) Machining
    3) Finishing
    4) Plating (This operation is being subcontracted to the vendor)
    5) Packing
   So far I know that I have to use special procurement key 30. I would appreciate if somebody tell me the settings need to be done in the material & operation detail like assigning the subcontracting info record, material movements, and material code logic if at all the material code would be changed when it comes back to the plant after being processed by vendor for plating. Expecting your response at earliest.
Regards,
J K Tharwani

Hi Jitender,
You can implement operation subcontract but many disadvantages are there.
Because every company expecting detail view of
1.How much qty available in vendor end
2. Stock for each stage wise ie , operation wise.
3. Individual cost for each operation.
To achieve this opn subcontract is not suitable.
Do material subcontract ie, create each opn as a separate material.
For SFG material code include work center no in the suffix or anything for easy identify the stage.
FG - Packing
SFG4 - Plating
SFG3 - Finishing
SFG2 - Machining
SFG1 - Turning
ROH
ie, FG > SFG4 > SFG3> SFG2 >SFG1> ROH.
Create Material master for all the materials.
Only for external processing spl. procurement 30.
Create BOM & Routing for all the materials.For external procured material no routing required.Remaining regular process.
Regards,
Dharma

Similar Messages

MRP for subcontracting

hi thr ,
here we r using planing strategy 10 .we have BOM like HALB A conatains ROH B
and that ROH B is send outsidefor subcontracting for cutting operation .
when i am taking planning run it is not generating DepReq for ROH B .
i have maintained spl procurement key 30 in HALB A in MRP 2 view .
why it not linking the ROH material .
and what r the setting to be mainatained for such scenario .
routing for the HALB contains only one operation Cutting and we have maintained PUR info record in the Routing for the same .
plz guide for the same above .

Ajay,
Routing is not required as you are subcontracting HALB A (as mentioned by you only one operation representing external processing).
1. Maintain HALB A - Special Procurement - F & 30
2. Maintain BOM for HALB A with usage 1 - Production and status relevant for all. See that your BOM is within the valid date range of the required date. Here component ROH B should be assigned.
3. Maintain Inforecord of Subcontracting type for HALB A.
With this run MRP you should get Subcontract Req generated for ROH B.
In your present case you have maintained external operation, which will get triggered only during creating/release of Production order. I think you will be having a planned order only for HALB A, please convert it into production/process order and check, then system will create subcontract requirement.
Regards,
Prasobh

PTRODUCT COSTING - SUBCONTRACTING - INHOUSE

Dear friends,
One product is produced Inhouse as well as by Subcotracting.
I have marked it with sp. procurement type X/30.
Now in Product costing , system caculates Subcontracting cost( Without operation cost).
If we remove sp. procurement type then system calculates Inhouse prod. cost properly (With operation cost.)
My requirement is - with sp. procurement type X/30 , system should calculate Inhouse production cost (With op. cost). How to solve this issue?
Please help.

Hi Sandeep
you maintain the following entries while costing
while creating the STD costEstimate (CK11N) enter the BOM and Routing details in the Quantity structure Tab.
OR
create a Production version for the material with X/30 with valid BOM and Routing,
then in the MRP4 view selection method field enter 2- Procution version only,
then as above said enter the production version while creating the costing in the Quantity structure tab of costing screen.
Now the system will pick the values from the ROuting and BOM for costing!!
Hope this Helps
BR
SK

Inspection of sub contracted operation

Hi All,
I have the followin scenario..
We have 4 operations to be performed on the material. Say A,B,C & D.. Out of this 3rd operation (i.e.C) will be subcontracted after completing A & B in house.The 3rd operation is to be inspected at sub-contractors place before bringing it back to Plant for final operation- D.. Can some one explain how to go abt this via production order with the required settings starting from Matl master..

hi,
As per your requirement i hope system will create purchase order for the subcontract operation, while creating the purchase order itself sytem will create the inspection lot (source inspection) mannually or as per backround job setting
QI07 is the transaction mannually create source inspection lot
based on the purchase order reference system will create inspection lot and u can analysis the material of vendor location stock, once production process is completed u can receive the goods againts the subcontract purchase order operation at tht time u can decide whether system has to create inspection lot again or with the reference of source inspection lot u can receive the goods this can be controlled in Quality info record QI06
Activate the inspection type 0101 GR model inspection and 01 inspection type againts PO in the material master
Rgds
Magesh.V

Subcontrating scarp quantity in Bom

Hi
pp gurus
How to handle the subcontrating item scrap
my scenerio is like this "x " item will be send out side for subcontract for one operation while receiving "y" item plus some scrap "s" will come inside.
How to create the Bom and how to handle the scrap. I am sending halb type to subcontracting. Which item has to be marked as -ve quantity pl explain clearly
how to create this type of Bom what type of item category is required?
i am maintaning the material master data for scrap also.
regards
mohan

Hi,
Let us imagine halb is sent out & we receive FERT along with SCRAP.
create a Bom for FERT, usage 1.
Then in the item details enter HALB in the first row.
Then in the second row enter SCRAP(material) & enter as (Eg) 2- .
Then after mrp run you will get a pur req. Convert this as Pur ord & then use mb1b or me2o & send the halb to the contractor thro 541 movement.
Then after the work, do MIGO 101 movement.
Here you can see that along with the FERT, the scrap is also received.
Regards,
Senthilkumar

Error while creating PO in operation subcontracting

I am getting an Error while creating PO in operation subcontracting.When I'm trying to convert the purchase requisition for the operation in the routing into a Purchase order it gives me the error "Not possible to determine any components".Please guide me why I am getting this error. I have already assigned the component to the operation in the routing. I also have this component in stock. But no Idea why I'm getting this error

Hi Sam,
please check ,
Assign a recursive BOM for the material for which you want to create the purchase order .ie. create a BOM of mat say X having a component X and marking the indicator recursive ticked.
Please create the BOM which is valid much before the date of creating a purchase requisition .
And proceed for the creation of subcontract purchase requisition.
Please Revert back, if the problem is solved.
OMKAR

Production operation external processing goods receipt for subcontract PO

Hi PP/MM experts,
I searched for existing forum entries but no luck or final answer.
I have a question about the goods receipt for a subcontracting PO that is account assigned to an operation of a production order (external processing for operation).
The following situation:
Production order type PP02 - external processing
There is only one operation in the production order with control key PP02 - external processing. I marked the control key PP02 in configuration for 'Automatic goods receipt'.
I created a PO for the PR is the operation
When I'm doing the goods receipt of the subcontrating PO a 101 posting is triggered for the finished product and components are consumed by 543 O movements. So far so good. But the inventory for the finished style is not increased. In MIGO I even see that even a batch number for the finished product is determined. Looks like that only the service is posted but not the inventory. I assumed when I mark the operation contol key for 'goods receipt' that the MIGO will also post the inventory for the finished style.
Reason for PP order and not only subcontract order is that we want to manage capacities of external suppliers with PP capacity planning.
Is that a bug in our system or normal behaviour? We use SAP ERP 6.5 with IS AFS.
Thanks in advance for your answers.
Best Regrads,
Harry

Hi Rizzi and all others,
thanks for your replies.
I'm using a production order for the following reasons:
We want to use capacity planning for external suppliers. At least to have some overview of work they have to do in a month
The external assembly can also be changed to internal assmebly and for that reason we will start always with the same kind of document -> production order.
But one more thing what is really confusing. In the materials document list MB51 the 101 movement for the service is listed even if the inventory was not increased. That is really confusing for the users.
Best Regards,
Harry

PR to PO conversion in operation subcontracting

Dear friends,
We are trying this scenario of operation subcontracting.
I have a semi - finish material SM01 on which i m carrying 5 operations. The 20th operation is sub contracting. I do not want to maintain a separate material for this operation. I have done all the necessary settings which are required. I m also getting a PR when a Production order is generated for operation 20.
Now the problem is when i go to convert this PR to PO in ME58 the system gives me an error, "Not possible to determine any components".
I do not understand where i have gone wrong.
The PR document type that is created is NB.
The PO does not take any material even if I try to maintain one.
What can be the possible solution.
Thanking all you for your kind assistance.

Hi pankaj
The concept is like that. You need to send a material out with gate pass to the vendor for that particular P.O.
You might have issued the material from stock for the previous operation so that you will not have a component for that operation. There may be two options.
Options 1) Create a dummy material with MRP type ND so that the planning will not happen and no plan order. keep stock through a movement type update. Allocate this component to the operation in your routing. If the external operations is pre defined.
Option 2 ) Create a dummy material with MRP type ND so that the planning will not happen and no plan order. keep stock through a movement type update. Include this component in P.O while converting from PR. If the external operations is not pre defined.
The component will now appear in ME 2O
Hope this is clear
Regards
J . Saravan

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

Subcontracting same material same vendor different operations

All SAP Gurus,
I'm providing components (in this case these are tools) for subcontracting.
Accourding to the condition of tools, subcontractor will perform different opertions (eg. sometimes sharpening of the tools, some times chipping) over these tools.
I don't want to create different material codes for components (as my material which I'm supplying to subcontractor and material which subcontractor is supplying to me against components are same).
But processing charges are varying each time accourding to operations performed by subcontractor.
Subcontracting PO picks up same price each time from Purchasing Info record (subcontracting).
Is there any any out to pay different charges depending upon operations performed by the subcontractor.
(We can not create service PO, as material is going out of factory on subcontracting challan).
Please suggest,
Regards.

Hi
Try changing the Price in the PO In the Conditions Tab of the PO line item.
Or if the Prices are being adopted from the Inforrecord , update the Price there.
Thanks & Regards
Kishore

Operational subcontracting scenario

We have a requirement in operation subcontracting.
In our production process some of the routing operations we are doing outside (external procurement). But the customer doesnu2019t want to create a Purchase Order for this process (each subcontracting requires a order and release). Since the number of operation level of subcontracting is more per day and they have contract with the subcontractor for the price for a year. Further they will send the order quantity by different schedule
Please suggest for the above situation which process we need to follow and what are all the master data requirement and the transaction data requirement in a frequent manner.
Regards
Sridharan

Create a Contract and then create a Subcontracting PO with reference to contract ( for a year )and assign the Component to be sent( Mostly Dummy Material)
And give the material description Similar to subcontractiong process.
& IN OPL8, Production order dependent parameter : Set The dependent reqmt/.reservation - Never, in General valid setting tab, this will restrict to create a PR while releasing Production order.
and follow the same process as per the existing process.
Note: IF you go to scheduling agreement for subcontracting You can't able to assign the component.
Edited by: Sundaresan . E. V on Oct 5, 2010 11:29 AM

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

Operation SubContracting

Hi Folks,
We use Operation Subcontracting ( sending A & getting A back with some marking / coating ect ) PO (doc typ POIN ) without item cat L but with A/c assignement cat F against prod ord followed by MIGO -->103 , 104 if scrapping , 105 to receive the high-quality serviced items back.
Item in the PO doesnt contain any material only Mat group "Sublet Mach & Fab"..
Now today MIGO threw error "Part1 will not be done: TH BLANKS FOR BLACKENING -M/S MIKRON TOO does not exist Material Chapter ID table .....with E (Error) Message class 4F (Message class for India localization) Message number 167 " , while doing 105 unusually.
But if we receive the same with MB01 , it goes through without any error !!!!
What could go wrong in the process ? Any pointers would be highly appreciated....
Out of curiosity ,,,cant we achieve the same with Normal SubContracting ?? ...we are on a Support & Maint environment & above was set up by else...
Regards
Jamna

Hello,
If Material and chapter Id is not maintained in J1ID , then system will issue given error in MIGO.
You your creating Std PO for Sub vendor and receiving the goods , this means the perticular vendor can send material you,
Check "Exception Material excise rate " in J1ID,
maintain Plant , Blank material and Vendor in J1ID and check the process.
Regards
Mahesh Naik.

How to map operation subcontracting in a process order.

Dear Gurus,
How to map operation subcontracting in a process order.
there are five operations in a process after three operations the material is send to a subcontract for further processing(i.e the fourth) then it comes to the plant and the fifth operations completed
How can i map this process .
Thanking you in advance
Regards
Ram

Hi,
have you tried external operations in receipe. There you need to maintain all the procurement realted data for that particular operations that is done outside, and system creates PR for every process order that you release. However the material goes and comes in without any material number (as WIP).
If you want to have more control, create a part number before SC operations and afer SCoperations and then use subcontracting process in procurement.
The need determines which option you can go with.
cheers
Rav

Operation Subcontracting involving special stock

Hi All,
We have a business scenario as below.
Operation Subcontracting process involved in a Project. The Components send to Vendor is a project stock. As already there a Special stock Indicator, we cannot send the material to Subcontractor. Any integration with PP-MM is possible ?What is the best solution for such situation?
Regards
Divya

IS the component is in project stock, then You can send to subcontractor, check Whether the stock is in project stock, or unrestricted,

Subcontracting of an operation

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