Subcontracting Process in SAP

Hi Friends,
Please help me to make me understand of subcontracting process for Automotives.
FYI our Plant is a 3rd party warehouse system. Our requirement is how (which triggers) the Delivery/Delivery Due list shipment of the components of the Subcontracting Assembly from Plant to Subcontractor can be done in SAP.
How the Planning of the components of Subcontracting Assembly can be done with help of MRP at Subcontractor level. Also we want to keep the safety stock at all the locations including subcontractor for components.
Any suggestions would be helpful..
Thanks and Regards,
Nabin

Dear,
There are two main options, I have not clearly understood your requirement, however please go through my explanantion, may be helpful
The procedure you are talking about in you serial no 1 to 4 is the <b>material subcontract...</b>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 subcontracting(in STD sap the key is 30), procurement key = F
A has a BOM having items X and Y. No routing for A
When you 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.

Similar Messages

Subcontract Process in MM

Hi All,
I have to map the following scenario in SAP.
There are three materials A, B & C.
We send material B to the vendor.
Vendor purchases material C.
Vendor adds material B to material C and sends us material A.
We pay vendor for material C and labour charges.
Now I want to achieve the above process by using the subcontracting process in SAP. I maintained a BOM for material A with material B as the component.Price of material A in PO = service charges for producing A + cost of matrl B. I could run the process this way.
But my client wants to have material C also in the BOM (even though they do not purchase the same).They say they want it for costing of material A. So material C must be in the BOM with matrl B.
So is it possible to have two seperate BOM's for material A , one for costing(matrl B + matrl C) and the other for using in the subcontract process (only matrl B)? And if we can have it that way how do I ensure that the BOM which contains only Matrl B gets selected when I create a subcontract PO?
Any help would be really appreciated.
Regards,
V S

Hi:
It is possible to have the two separate BOM one is costing BOM and other is your regular production BOM.
However while creating these two BOM select BOM Usage as 6 for costing BOM and 1 for production BOM so in subcontract PO system always select production BOM which must be having only one child component which you wanted to issue.
And ask you controlling to use costing BOM for the costing purposes which would have two child components.In controlling there is a provision to proritise the BOM usage.
Hope this would helps you.
Cheers
Rahul.
Awards plz. if helpful.

Standard subcontracting process?

plz anyone answer me standard subcontracting process in sap b1 9.0 in detail..
step by step..

Hi,
Please check this thread:
http://scn.sap.com/thread/3517239
Thanks & Regards,
Nagarajan

Intercompany - Subcontracting Process

Hi
We have a subcontracting process where RM/PM is issued by Parent company and other company charges processing fees and sends back FG to parent company.
So this is typically a subcontracting process in SAP where one company sends the material to vendor( 2nd company ) and vendor processes the goods for 1st company and charges processing fees. In 1st company stock will be reflected as stock with vendor and in vendor books (2nd company), this stock will be not appear.
Both the companies are on SAP and using same client.
Now our requirement is as under -
1. Parent Company needs Inventory tracking which is being issued to Vendor for their materials ( because both the companies are on SAP )
2. Vendor needs to generate an invoice for processing fees with following details:
1. Material Produced
2. Quantity produced
3. Batch details
This is legal requirement where Invoice should capture Processing charges details at the time of dispatch..
Kindly advice how this scenario can be mapped with above details. Issues which we are facing are :
1. If we use simple sub contracting process, material tracking is not possible in Parent Company
2. When material is issued to Vendor (Company Code 2), How to receive/dispatch FG material in Vendor so that complete processing in PP can be mapped.
thanks,
Manoj

There is no restrication that Automatic PO will not be created if the PR is created from the Sales Order.
Please elobarate on the exact error you are getting.
However please follow & check if these general settings are in place.
1.Material has the auto PO checked in Material Master.
2. Vendor has the Auto PO checked in Vendor Master.
3.Source list is maintained if material master has source list checked.
4.Valid conditions exist in the Sub Contracting info record.
5.Right variant ex - doctype,Plant etc exist or are entered in ME59N.

2 Subcontractors for the Subcontracting process, how to deal with it in SAP

Dear all
I encounter this scenario, please advise how to design it in SAP system for Subcontracting (SC) as it involves 1st subcontracting vendor SC-V01 and 2nd subcontracting vendor SC-V02. I am using the simple example of Colouring Bottom cover and then putting Bottom label done by the above 2 SC vendors respectively
1. Unlike normal subcontracting, my company places the 1st PO to the SC-V01 by supplying SC-V01
    the Raw Material of bottle.
2. SC-V01 will COLOUR the bottom cover. Once done, SC-V01 will delivery this bottom with coloured
    bottom cover to SC-V02.
3. Once the SC-V02 receives it, they will put the label on this bottom. Once done, it is delivered back to
    my company.
Please advise me how to come out with the soluions on it and the Tcode.
Notes: Due to certain reason, we are not able to make only 1 SC vendor solely responsible for the whole thing. The business nature involves high volumes of Subcontracting which involves 2 SC vendors.
Marks will be given handsomely for helpful answer.
Thanks.

Hi Prashant
Thanks for your reply.
The 1st BOM for SC-V01 is:
Bottle with Color Cover
   - Bottle with uncolor Cover ->Lower BOM Component
The 2nd BOM for SC-V02 is:
Bottle with Color Cover with Label
   - Bottle with Color Cover ->Lower BOM Component
Question 01:
Should the BOM be above structure or it should be the one you mentioned in your previous reply
1) Create BOM as below -
Labelled Bottle
\--> Coloured Bottle
\--> Bottle
2) The procurement for material will be as below -
Labelled bottle: F - 30
Coloured Bottle: F - 30
I just want to know, what is the setting that allow the virtual GR for the SC-V01 in our system (physical GR is done to the SC-V01 as the input for the process of putting Label to the already colored bottle cover) that will " After GRN, the material will be treated as provided to the S/C-V02. You need not transfer the material agai to the S/C-V02".
Question 02:
I wonder how can the above happen? Is it due to any additional setting we have done or it is merely the linkage I have between 2 BOM, where the Semifinished material of 1st BOM becomes the Raw Material of the 2nd BOM?
Quesiton 03:
How about the Subsequent Adjustment? Should it be done at the end of each subcon or can I just do it once at the end of the 2nd subcon?
Question 04:
I just found out from SAP HELP [Multilevel Subcontracting|http://help.sap.com/saphelp_45b/helpdata/EN/6e/6bc5e672ef11d2a7350000e82a3c24/content.htm], that we actually need to set up MRP Area for it? is it really so complex?
THanks
Edited by: Daimos on May 14, 2009 3:16 PM
Edited by: Daimos on May 14, 2009 3:20 PM
Edited by: Daimos on May 14, 2009 3:46 PM

Goods Receipt in Subcontracting process

Hi,
I am beginner in SAP.
This is regarding Goods Receipt in Subcontracting process.
I have provided raw material Quantity = 100 Nos. to subcontracting vendor.
Subcontracting vendor done machining on 80 Quantity, and we have done Goods Receipt for 80 Quantity as Finished Parts.
Subcontracting vendor found 20 Quantity as Defected.
Shall I take back 20 Quantity by Movement Type 542.
OR
Shall I do Goods Receipt of 20 Quantity as Finished Product and price = 0. & then stock transfer of Finished to Raw Material.
Please reply.

Hi,
It depends on what you want your subcontractor to do with the faulty raw material stock - if you want them to scrap it you can scrap stock from subcontractor stock using movement type 551 and special stock "O" (the system should prompt you to enter the vendor code). If you want it returned for you to scrap it - movement 542 to return it then scrap it from your own stock.
You shouldn't receive an additional 20 of the finished parts - as you only received 80 not 100. Close the purchase order off to close off the balance of 20 remaining.
Thanks

Error M7019 BAPI_GOODSMVT_CREATE - Subcontracting process

Hi,
I am developing a subcontracting process and using the BAPI_GOODSMVT_CREATE to return the goods, but when I do the low inputs (mov 543) the BAPI returns the following message.
TYPE       E
ID               M7
NUMBER      19
MESSAGE Combination of movement type 543 and function selected not possible
LOG_NO
LOG_MSG_NO     0
MESSAGE_V1        543
MESSAGE_V2
MESSAGE_V3
MESSAGE_V4
PARAMETER            GOODSMVT_ITEM
I'm using GOODSMVT_CODE = "07" (MB04).
When I run the same procedure via transaction MB04 I can create the document.
Has anyone experienced this? Would have any suggestions?
Thanks
Sandra Avila

Hi,
Successfully execute the BAPI using the help of SAP
http://wiki.sdn.sap.com/wiki/display/ERPSCM/HowToGoodsMovementswith+BAPI#HowToGoodsMovementswithBAPI-MoreinformationonLINEIDandPARENTID
Thanks to all
Sandra Avila

Serial numbers for subcontracting process

Hello Experts,
We are using SAP ECC 6.0 and trying to implement the subcontracting process with serial numbers. This scenario is focused on those materials that we need to keep track on how many times it has gone to repair (for example, a motor) by specific item. Suppose there's a material called "Material A". However, there are MANY "Motor A"'s, and thus, the need for serial number to keep track on the number of repairs each one has had.
So, having said that, the scenario is working so far. However, the user CAN'T type in the serial number of the material at the REQUISITION LEVEL. This can be done at the PO level and at the goods receipt level.
This brings a problem since the Purchasing dept. doesn't know the serial number. This information is known by the user, but there's "serial number" functionality in the requisition. Is there a configuration for this? Could it be possible for the serial number to be in the requisition and then inherit it to the PO?
We want this in order to automate the process.
The configuration we made was in the "Plant Maintenance and Customer Service" section, using procedures MMSL "Maintain goods receipt and issue doc." and POSL "Serial numbers in purchase orders". There's no procedure for purchase requisitions. If this can be also done from a Work Order, that will be just fine.
Let me know if it is possible or if you have any idea on how to do this.
Regards,
Gilberto Gallardo.

Hi,
Serial no can be used for the following business transactions.
1. Goods Receipt/Goods isssue and other inventory postings.
2.sales orders and delivery notes
3.maintenance orders
4.production orders.
Settings:
1. create a serial number profile in customising.
2. Assign the serial number profile in the material master record in work
scheduling view for fert and raw material in plant data / stor2 view..
Business procedures may be assigned in configuration to a serial number profile.
The assignment to the serial number profile determines if serial numbers are required , can be assigned, must be assigned,are assigned automatically
MMSL : Goods issue , receipts,stockj transfers,stock transport orders
Thanks
nandha

Material provided by customer - subcontracting process

Hi All,
In our scenario our customer is subcontracting some assembly work to us. The material to be assembled in provided by the customer completely. It is always in the ownership of the customer even when it is lying at our end.
Is there a standard process in SAP to map this scenario? How can we check the customer stock lying in our SAP system at our end?
Regards,
V S

Hi,
If you want to track these materials and stock than you will have to create them as non-valuated materials in your system and take GRs when customer sends you these materials. You may take it as un-restricted stock, Sales Order Stock or Customer Stock based on your requirements.
As material is non-valuated it will not create any liability in your system.
Than, use this materials in BOMs for your production order and create a Sales order for the final product.
Regards,
Dakshesh

New requirement in Subcontracting process

Hi All,
There is a requirement related to indian excise, in Subcontracting process is it possible to merge below 2 steps 1)transfer posting to vendor stock and
2)creating subcontracting challan
That mean to say SC challan has to be created for some qty of material and transfer posting has to happen simultaneously for the same qty with 541 mov type.
This requirement may looks strange..!!
Do you think,it is possible in SAP..??by any means...
Pls confirm
Regds

Hi,
Normal pratice whenever you are sending material to sub contractor .Please count the material load inthe vehicle then raise document.
In you case instead of 10 nos document created and physically you have sent 5 nos only
You can do subsequent settlement
use t.code : MB04 enter the Purchase order no and enter the qty and save .
5 nos will be deducted from the vendor stock
I have tried just now. Please try
G.Ganesh Kumar

Steps in Subcontracting Process

Dear Experts,
In Subcontracting process if the subcontracting period of 180 days is completed and if material is still with Vendor, how to complete the process.
Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan.
Please explain detail steps and Tcode.
Thanks and Regards,
Sapmm user

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 ) 0
(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.
Note:: At the Time of GR 543 Mvt is up dated for Raw Material.
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 be created for the material(2) calling for material(1)
4. Info record 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:
u2013 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
u2013 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).
u2013 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.

Subcontracting Process

Hi
If any one can explain in detail about scenario material vendor posting directly to subcontracting vendor
It 's very urgent
Thanks & Regards,
Sadhish

Hi Sadhish,
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 it wud have answered ur question
Reward if useful
Aasif

ThirdParty Subcontracting Process

Hi Experts,
Can you share the usage and process of thirdparty subcontracting process step by step in MM
Regards,
Udaya.
Note : Subject is widely discussed FAQ. Please search forum before posting.
Edited by: Jeyakanthan A on Dec 5, 2011 10:22 PM

Hi,
Go thru the Document [Detailed description:Subcontracting with Third-Party|http://help.sap.com/saphelp_scm41/helpdata/en/b7/78573da974c729e10000000a11402f/content.htm]
[SAP Best Practices:Third party Procurement, Subcontracting, and External Processing|http://help.sap.com/bestpractices/BBLibrary/HTML/J75_ThirdPartyOrdProcwithSub_EN_KO.htm]
Hope you find these useful.
Reetesh

Standard purchase organization in subcontracting process?

Gurus,
It's not mandatory to enter standard purchase organization during subcontracting process..It's manadtory during consignment and pipeline process.
then, why standard purchase organization involves during special procurement process?
Subcontaracting also a special procurement process..
pls share ur ideas..

Hi
Standard purchasing organisation will be read by the program for Stock transfer, consignment & Pipeline as per the standard SAP.
Thanks/karthik

External subcontracting processing in production orders

Hi Everybody, We are facing a following situation...while using external subcontracting processing in production orders..
Finance wants all costs settled off of production orders with receipts against them at period end to accurately capture costs for the period. This is because of our companys financial policy i.e. we have to settle the exact costs by every month end instead of using GR/IR postings for partially confirmed quantities.. Any production orders with receipts against them must be able to be settled at period end. This includes partially received production orders, (it means when the total production order quantity is 10 PCS and if Subcon vendor sends 5pcs in this month end and sends the remaining 5 in the next month).
Currently we have not been able to settle partially received production orders in our testing. SAP is requiring the production order to be in TECO (Technically Complete) status before it can be settled. It is not feasible for PP to have production orders that have not been fully received in TECO status because they loose visibility to them in their reporting and tracking.
does any body dealth with this situation? any userexits, functional specs etc..
Your guidance will be very helpful,,
srikanth

Did you try using in order type/settlement profile the radio button which indicates can be settled and the not one which corresponds to 100% settlement. Hope this helps.

Subcontracting Process in SAP

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