Subcontracting scenario for Wet Husk to dry husk

Dear All,
             We have a unique scenario for job work . We produce wet husk. Then we send this to outside vendor for drying. After that we receive it as a different material code with Dry husk.Scenario looks ok till now. But the pricing of Vendor is little different.
            Vendor decides price which includes 3 components.
1) Freight charge every time a truck comes for loading and unloading it charges Rs 300/ trip
2) Rent for the area. Vendor pays Rs 20000/pm for the area where job work is happening.So no matter how much husk is dried per month this amount is fixed.
3) Vendor charges job work fees not per TON but the number of labors he uses in that work. Say in some season he may use less number of users for more quantity of job work.
            Most importantly it provides bill every month.So we are confused how we will map this scenario so that all the prices should go to the finished product at the end of the process.
            Only 5% tolerance is given during MIRO for change in Price with respect to PO.
Awaiting your expert comments
Regards
Abhijit

Hi
Try out the following
1) Create a PO with an near to approximate price per ton( keep it max)of the output material
2) Issue the Input material and recieve the output material
Now the Output material will be valuated at a price = Input material price + Labour charge/piece
This amount may be wrong as your terms with the vendor is that of labour based .No isuues poceed as follows
3) Perform MIRO for per the Invoice supplied bt the vendor .Now at this stage the difference amount in step3 and step2 will be knocked off from the Inventory account or the PRD account depending on what percentage of the out put material is consumed .So upto this step you have accounted you labour charges correctly.
4) Now coming back to rent and freight ,pass a Subsequent Debit ,during which these two amounts will be loaded on to Either Inventory or PRD .So in step 4 you have accounted for Rent and Freight.
Regards
Sandeep

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Hi Friends,
the requriement is as follows:
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Phani

Hi,
Mention the Vendor & Sub contracting detail as service line item in Network order & release, the system automatically generates the PR for this.
Then create PO with reference to this PR.
Create Normal PO with service line iten, item cateory as D ,Specify 2 line item one is for vendor & other service line item for the Sub contractor.Once sub contractor delivers material to plant Then accept both the service line item in SES, the payment will get generated for both vendor & sub contractor as specified in the PO.
The invoice will be based on this line item.
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Dear Sir ,
In my company one scnario comes , in which we are making MTO sales order for customer , some item of BOM of finished goods I have to provide to the subcontracting vendor for making semifinished goods .
How I can do this activity according to SAP point , as subcontracting vendor stock is represented with specail indicatior O and sales order stock with E.
Please help to get rid off this issue.
thanks & regards
Shailendra

check these links http://help.sap.com/erp2005_ehp_04/helpdata/EN/4d/2b90b043ad11d189410000e829fbbd/content.htm
http://help.sap.com/bp_blv1600/V5600/BBLibrary/HTML/150_EN_IN.htm
Edited by: anjali s on Apr 28, 2009 12:57 PM

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.
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Issue: I am not able to show the material which he is sending to the vendor as my purchase requisition doesnot contain any materials.
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Hi all,
i got my the answer for my scenario by this link
http://forums.sdn.sap.com/thread.jspa?threadID=1805266
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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

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 scenario in Warehouse management

Hello,
We have an existing subcontracting scenario in IM.
Recently we have implemented WM.
I would like to know whether there are any customizing settings required to be made to take care of WM part.
And what would be the additional transactions required in WM( I think it will be LT03 after ME2O and LT06 after MIGO ??).
Thanks & Regards,
Pankaj

HI ,
In Ware house management you can block the stock for Physical Inventory purpose. You cannot post the stock to the warehouse using Physical Invenory.
If there is a count going on so the concerned Warehouse bin is to be blocked during Inventory so that no further goods movement is possible during that period.
Once the Physical Inventory ids done the block can be released so that the movement can again happen.
The Inventory mangement initiates the transfer requirement. This transfer requirement is used for creating the transfer orders. The transfer order confirmation is done then which actually places the stock in the concerned bin mentioned in the order.
The stock in WM can be checked in LX24/ LX26 which is same as theat of MMBE of MM.
Hope this helps.
Regards,
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Award pls if helpful.

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Hi all,
Scenario:
I am working with Make to order scenario. In this scenario, the client is sending 2 raw materials to the vendor and the vendor is adding 2 more raw materials and assembles all the RM's to manufacture semi finished product. After that, our client will do GR for that semi finished and use that SFG for finished goods production. I will run MRP against sales order in MD50 so that all the raw materials procured will come under special stock.
Issue:
Now my problem is i am not able to issue the raw materials under special stock to the vendor. Is there anything to do from PP point of view to solve it.
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Hello,
You can use operation subcontracting.
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http://www.sap-img.com/production/two-types-of-subcontracting-relevant-for-pp.htm
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How to manage the Vendor supplied components in Subcontracting scenario.

Hi experts ,
I have to complete the finished product say "A" by subcontracting scenario.
I am supplying A1, A2, A3 to the vendor as components.
Component A4 is the item required for the final product "A" but this will be supplied by the Vendor.
Please let me know how can I handle both the material movements and the cost of the product in this scenario thru Subcontracting PO.
Thanks & regards,
Rachan.

what did your purchasing department negotiate?
do you get billed for the component A4 separately? or is the cost for A4 inlcuded in the service charge for subcontracting?
does your purchasing department order A4?
is it in your bill?
if it is in your bill and you create an extra order for this part, then you should set the SC flag in the delivery address tab of your PO along with the vendor number of your subcontractor.
Subcontractor will then tell you when the material arrvied and you post a goods receipt, this is then directly posted into special stock at subcontractor. When you receive the finished material A and post GR with MIGO all components will be issued.
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Hi gurus,
Our client has the following scenario:
KDM has been configured in OBYC for foreign exchange differences between GR and IR. The GL account maintained for KDM gets picked up when we do GR and IR for a standard PO.
However, when we do a subcontracting PO (in foreign currency), then the resulting foreign exchange difference does not flow to the KDM account. Everything flows to the PRD customized account.
I want to know whether, in the first place, KDM is supported for a subcontracting scenario. If yes, then what changes are required.
Request anyone who has worked on such a case before to please revert.
Regards,
Aditya

Hiya,
I have implemented Sub-Contracted before and remember using KDM to capture X-rate differences.
Have you checked the Val Class assignment? I hope all that config is in place.
Let me look for some info on this. Meanwhile, could you check the settings for this Val Class against PRD and KDM?
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How to setup a Subcontracting Scenario Part II

Guys,
I created a supply chain model to reflect subcontracting scenario. Here are the results as I ran SNP Heuristics.
1. I have a forecast demand at DC = 10.
2. Supplier gets a purchase requisitions.
3. In response Planned Order is generated and dependent demand is placed for components.
4. Purchase Requisition is created against DC for Component.
My question is why is it system not generating subcontracting purchase requisition. I was expecting a Subcon purchase requisition to be created a Supplier end for FGI.
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Hi,
Can you confirm which planning book you are using, is it standard planning book for "Subcontracting", if not have you included "Subcontracting" key figure.
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Dear Sir,
We have a following complec Subcontracting scenario .
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We assure to give full marks for the suggested solution please .
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B Mittal

Hello Mittal,
You can also carry out planning for components to be provided in subcontracting using an
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We can use standard purchase order document type NB.
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d. Check the availability of the goods.
e. Provision of components to vendor. The stocks are managed
under stocks provided to vendor. The components are transfer posted from UR stock to Stocks provided to the vendor.
f. The vendor delivers the goods and the GR is made.
g. You can check the stocks provided to vendor using MR8
transaction.
h. The SC vendor furnishes Invoice that can be entered using
MIRO
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Regards
R.Brahmankar

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Regards
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Subcontracting scenario for Wet Husk to dry husk

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