Third party Manufacturing

Hi Sapients,
We are planning to use Third party manufacturing for a plant. And would like to use Purchase orders with TPM order type.
Could some one help me the accounting flow in the third party manufactuirng when using the movement type: 543 and 541.
How are the consumption costs captured..
Thanks
Ravi

Control the process with Outside Process Work Orders. You create a Work Order and a parts list in the normal way but have a two step routing, the first step is the Outside Process done by the Third Party and the second step is receipt of the goods back from them (JDE will not allow an Outside process to be the last step on a routing)
With the first operation you will need a OP item number, this is part number which is made up of the Item being manufactured plus the characters OP plus the operation number, this part number represents the service that the 3rd party is providing and is set up as a Stock Type X, Line Type X
When you run R31410 to attach the parts list it will automatically raise a Purchase Order on the 3rd party
You can then issue the parts to the Work Order in the normal fashion and since you have a P/O for the manufacturing process this will acount for the 3rd party labour
Look on Oracle Support for document 647965.1
Steve

Similar Messages

Capturing third party manufacturer for the batch

Hi ,
we are in the business of Pharma Products trading and marketing , as per business requirement we need to capture third party manufacturer for particular batch.
The scenario is as follows -
Our Company - Raise PO to Vendor A for Material Mat001 - this vendor A takes same product from any of his own vendors X, Y , Z .( third party manufacturer)
Now the requirement is when we receive goods from Vendor A for MAT001 , it may have multiple batches and these batches may come from one or different sub vendor of A . During GR we need to capture this sub vendor of Vendor A or say third party manufacturer .
Please provide possible solution
Edited by: Bhushan Bivalkar on Jun 4, 2010 11:06 AM

You can use batch characteristics. Make a class (type 023) and assign a characteristic to it (with approprite description).
Assign this class in the material classification view.
Now you can maintain the 3rd vendor's batch number in the batch characteristic (in MSC2N)
Regards,
Aroop

Sales with third-party manufacturer

Hi gurus,
I need your help with the following sales scenario:
My company produces product A.
Product B can be manufactured applying minor changes in product A. However, my company doesn't have the machinery to do these changes. They need to be done by a partner.
The sales process begins with the customer requesting product B to my company. As we can't manufacture product B, we send the product A to our partner in order to manufacture product B. The partner charges us for the service and then sends the product B to the customer. An important point here is that the product B won't be sent back to my company, but it will be sent directly to the customer. In the last step, we send the invoice to the customer.
Is there a similar standard scenario I could use as a model?
Regards,
Melgado

>
lmelgado wrote:
> Hi gurus,
>
> I need your help with the following sales scenario:
>
> My company produces product A.
> Product B can be manufactured applying minor changes in product A. However, my company doesn't have the machinery to do these changes. They need to be done by a partner.
>
> The sales process begins with the customer requesting product B to my company. As we can't manufacture product B, we send the product A to our partner in order to manufacture product B. The partner charges us for the service and then sends the product B to the customer. An important point here is that the product B won't be sent back to my company, but it will be sent directly to the customer. In the last step, we send the invoice to the customer.
>
> Is there a similar standard scenario I could use as a model?
>
> Regards,
>
> Melgado
Hello
This seems to me the combination of the standard inter-company and 3rd party sales models where you partner is acting as supplier(of the customer in 3rd party)
1. Inter-company relationship between your company and your company's partner
2. 3rd party relationship between your company , partner and the customer..
Thanks

Manufacturing with a third party, How to control cost and automate

JDE E1 v8.12 will be upgrading to 9.0
I am new to this so if someone has ideas or point me in the right direction. You see we Order a supply of Wrappers, Trays(Boxes) and Master Shippers(Cases). This is put into inventory . We Only ship out amount needed to our third party when orders need to be filled, (Our 3rd party completes of finished goods). Rest of the Wrappers, etc are stored in our warehouse.
iInventory adjustments are done when sending to our 3rd party. When we buy the wrappers etc creates a large negative variance which floats on our books, It takes about 2-6 months to offset the variance. Our 3rd party makes our finished goods and we send them the packing etc, so our 3rd receives Wrappers, etc to complete finished Product
We are charged for Labor and the finished product.
The things we want to keep track of is
labor(3rd party)
Finished product(3rd party)
Wrappers
incurring a (+- 5%)Spoilage of wrappers
Boxes
Freight*
iWe get hit with freight cost 3 times
(1)     1st cost freight to 3rd party
(2)     2nd cost freight back to us
(3)     3rd cost freight out to the DC( Distribution Centers)
Things we would like to automate
•     Be able to place a PO for finished goods to 3rd party
•     The system knows and states what components are needed to complete the finished goods(So we can monitor it)
•     The system flags when more components needs to be ordered(so our supply does not fall below our benchmark)
Within manufacturing this product wewant to be aware of our prime cost
Prime Cost
1)     Direct material
2)     Labor
3)     Other direct cost(e.g. packaging and royalties)
Since we send our material (packing only) to a third party to complete the finished good, within the manufacturing suite. We can we use? Do we have to have manufacturing account as well? .
Any suggestion would be received.
Thanks

Control the process with Outside Process Work Orders. You create a Work Order and a parts list in the normal way but have a two step routing, the first step is the Outside Process done by the Third Party and the second step is receipt of the goods back from them (JDE will not allow an Outside process to be the last step on a routing)
With the first operation you will need a OP item number, this is part number which is made up of the Item being manufactured plus the characters OP plus the operation number, this part number represents the service that the 3rd party is providing and is set up as a Stock Type X, Line Type X
When you run R31410 to attach the parts list it will automatically raise a Purchase Order on the 3rd party
You can then issue the parts to the Work Order in the normal fashion and since you have a P/O for the manufacturing process this will acount for the 3rd party labour
Look on Oracle Support for document 647965.1
Steve

In Third party sales, Part of MM..?

Hi guru's
Can explain about third party sales and what is major part of work for MM in that.
1.Please send me the overall flow in Third party sales process with Transaction codes.
thanks
sap-mm

THIRD PARTY SCENARIO
in third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. A sales order may consist partly or wholly of third-party items. Occasionally, you may need to let a vendor deliver items you would normally deliver yourself.
Process Flow
the processing of third-party orders is controlled via material types. Material types define whether a material is produced only internally can be ordered only from third-party vendors, or whether both are possible. For example, a material that is defined as a trading good can only be ordered from a third-party vendor. However, if you manufacture your own finished products, you may also want, from time to time, to be able to order the same type of product from other vendors.
Processing Third-Party Orders in Sales
Third-party items can be created automatically by the system, depending on how your system is set. However, you can also change a standard item to a third-party item during sales processing manually.
Automatic third-party order processing:-
if a material is always delivered from one or more third-party vendors, you can specify in the material master that the material is a third-party item. During subsequent sales order processing, the system automatically determines the appropriate item category for a third-party item: TAS. To specify a material as a third-party item, enter BANS in the Item category group field in the Sales 2 screen of the material master record.
Manual third-party order processing
In the case of a material that you normally deliver yourself but occasionally need to order from a third-party vendor, you can overwrite the item category during sales order processing. For a material that you normally deliver yourself, you specify the item category group NORM in the material master.
If, as an exception, you use a third-party material, change the entry TAN to TAS in the ItCa field when processing the sales document. The item is then processed as third-party item.
If address data for the ship-to party is changed in the sales order in third-party business transactions, the changed data will automatically be passed on to purchase requisition and also to the purchase order ,if one already exists. In the purchase order, you can display the address data for the ship-to party in the attributes for the item.
You can only change the address data for the ship-to party in the sales order for third-party business transactions, and not in the purchase order.
Processing Third-Party Orders in Purchasing
when you save a sales order that contains one or more third-party items, the system automatically creates a purchase requisition in Purchasing. Each third-party item in a sales order automatically generates a corresponding purchase requisition item. During creation of the requisition, the system automatically determines a vendor for each requisition item. If a sales order item has more than one schedule line, the system creates a purchase requisition item for each schedule line.
Purchase orders are created from purchase requisitions in the usual way. For more information about creating purchase orders, see the Purchasing documentation. During creation of the purchase order, the system automatically copies the delivery address of your customer from the corresponding sales order. In a sales order, you can enter purchase order texts for each third-party item. When you create the corresponding purchase order, the texts are automatically copied into the purchase order. The number of the purchase order appears in the document flow information of the sales order.
All changes made in the purchase order are automatically made in the sales order as well. For example, if the vendor confirms quantities and delivery dates different from those you request and enters them in the purchase order, the revised data is automatically copied into the sales order
you process third-party items by creating a normal sales order. In overview for the order, you can then overwrite the default item category (TAN in the standard system) with the special item category for third-party items: TAS
Billing Third-Party Orders
If relevance for billing indicator for the item category has been set to B (relevant for order-related billing on the basis of the order quantity) in Customizing, the system includes the order in the billing due list immediately. If, however, the indicator has been set to F (relevant to order-related billing on the basis of the invoice quantity), the system does not include the order in the billing due list until an invoice from the vendor has been received and processed by the purchasing department. In the standard system, item category TAS (third-party order processing) has been given billing-relevance indicator F.
In the first case, the third-party order is considered to be completely billed only when the invoiced quantity equals the order quantity of the sales order item. In the second case, each time a vendor invoice is received, a customer invoice is created for the quantity in the vendor invoice and the order is considered to be fully invoiced until the next vendor invoice is received.
If you have activated billing-relevance indicator F for item categories in Customizing, billing can refer to the goods receipt quantity instead of the incoming invoice quantity.
You can control whether the invoice receipt quantity or the quantity of goods received is relevant for billing in Customizing for copying control for billing at item level.
FOR YOUR PROCESS Individual Purchase Orders WELL GIVE THE RIGHT SOLUTION
Individual purchase orders are used when your customer orders goods from you that are not in stock and must be ordered from one or more external vendors.
Process Flow
During sales order entry, the system automatically creates a purchase requisition item. The purchasing department creates a purchase order based on the requisition and the vendor ships the goods directly to you (unlike third party order processing, where the vendor ships directly to your customer). You then ship the goods to your customer. While the goods are part of your inventory, you manage them as part of the sales order stock. Sales order stock consists of stock that is assigned to specific sales orders and cannot be used for other purposes.
Process Flow for 3rd Party Sales
Customize the third party sales in summary:
Prerequisites for 3rd party sales,
Purchasing org,
purchasing group,
assign the Purchase org to company code
assign Purchase org to plant,
should not maintain the stock in material, it should be trading goods,
1. Create Vendor XK01
2. Create Material Material Type as "Trading Goods". Item category group as "BANS".
3. Assign Item Category TAS to Order type that you are going to use.
4. A sale order is created and when saved a PR is generated at the background
5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.
6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO
7. Goods receipt MIGO
8. Goods issue
9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.
10. Billing *--
i think this will be helpful to you

Ship to party and vendor relation in third party process

Hello Experts,
I need your precious suggestions on my business requirement.
When we create the third party sales order system creates the Purchase Requisition and further PO is created through purchasing department.
Suppose in my third party sales order I have two items X & Y, and both need to deliver at two different ship to party XXX & YYY respectively. in order system determine plant 1000 for both materials based on plant determination (CMIR >> CMR >> MMR) and system generates PR.
I know while converting the PR to PO system check Source list (ME01) to determine the vendor. my requirement is I want to determine Vendor based on ship to party in sales order. suppose ship to party locations for XXX and YYY are Bangalore and Pune respectively and in both place we have different vendor. Both vendor manufacture product X & Y. so I want system should pick the vendor according to ship to party.
Is there any relation between ship to party and vendor which will work in third party processing ?
Kindly explain how I can achieve this requirement.
Thanks,

I doubt this can't be achieved by SAP standard functionality. You may need to use user exit. Check Third party to purchase req user exit or purchase req user exit to fulfill the requirement.
Regards,

Third-Party Order Fulfillment Process Scenario

Hello,
I would like to know if any of you have come across a use case where the Third-Party Order Fulfillment is Not based on the Supplier/Manufacturer shipping out the material directly But the Buyer (and in some cases even end User/customer) arranges this themselves. This is very common in International Trade where the Buyer/Business arranges the shipment themselves by using the services of a Freight Forwarder who Ships the material to the end user/customer after the Supplier/Manufacturer has made the Material available. In such cases the actual Shipment could take days or weeks from when Material is made ready by the Suppliers.
Currently the Third-Party Order Fulfillment Process assumes only one scenario and that is the Supplier will ship the material and inform their Buyer of Delivery. But in International Trade this is not the case and the Incoterms in the Purchase Order can be different to the Incoterms in the Sales order example in the PO the incoterms could be Ex-Works and in the SO CIF.
This leads to requirement of ASN and separate Inbound and Outbound Delivery and their separate Release in this Process as well.
These are not currently supported in the Third-Party Order Fulfillment process thus the Third-Party Order Fulfillment process in ByD has a very limited use in its current form.
If there are other users who have come across this as well then it would be nice to have your comments and possible workaround.
Best regards
Nick

There is no standard SAP solution for this requirement.
You can trigger output from inbound delivery document to generate EDI output and send delivery information to customer.
You will require to define custom output type , partner profile and link with custom fucntion module.
FM should have logic to pick information from 3rd party sales order and inbound ASN and generate IDOC
Hope this solution will work for your requirement

RED Workflow questions with Mac Pro (including third party plugins)

Hello all,
I’ve been searching many forums for the better part of a day trying to get some workflow questions sorted. I’m experiencing (very) slow export times, and mediocre playback for a machine that should be screaming fast.
Here is what I’m working with:
2014 Mac Pro
-2.7 GHz 12-core intel xeon E5
-64GB Ram
-Dual AMD FirePro D700 6GB
-1TB Flash Storage
Editing all footage off 96TB Raid 6 mini-sas server (getting about 1100mbs read/write rate according to AJA system test) which is faster than any Thunderbolt/TB2 drive array I have.
Media I work with is footage from the RED Epic (normally 5K) as well as DSLR footage from the 5d.
Software:
-PrPro CC 2014 (8.1)
-Magic Bullet Looks 2.5.2
My question(s) pertains to RED post-pro workflow in combination with third party plug-ins and the different approaches to make it more efficient.
Right now, majority of the clients need a 1080p HD master, and they are generally anywhere from 2-8 minutes (usually). So my sequence settings are as follows:
Video:
Editing Mode: RED Cinema
Size: 1920 x 1080
Audio: 48Hz
Video Previews
Preview File Format: I-Frame Only MPEG
Codec: MPEG I-Frame
1920x1080
Maximum Bit Depth unchecked
Maximum Render Quality unchecked
Composite in Linear Color checked
Export Settings
H.264
1920x1080
VBR 1 pass
Target Bitrate 12mbs
Max bitrate 12mbs
Maximum render quality/depth/previews unchecked
Issues I have:
-Playback is fine at 1/2 or even full, but once effects (especially magic bullet looks) start to go on the clips, it’s very choppy and has difficult playback at 1/4
-Export times (especially with magic bullet looks) will take the better part of 1-4 hours for a video that is 3-6 minutes long. This doesn’t seem like it should be the case for a maxed out MacPro
So my questions are:
Do these seem like the right sequence/export settings for mastering at 1080p? If not, what would you suggest?
Would using offline editing help at all?
Do you place your effects on adjustment layers?
Is there anyway to improve export settings when using an array of filters?
Have you stopped using third party plugins for their inefficiency in unreliability and switched to more integrated applications like SpeedGrade?
Is there any other tweaks that you would suggest for RED workflow with PrPro?
Should I consider switching to FCPX or (besides the iMovie-likeness) does it carry problems of its own?

Hi This Is Ironclad,
thisisironclad wrote:
Hello all,
I’ve been searching many forums for the better part of a day trying to get some workflow questions sorted. I’m experiencing (very) slow export times, and mediocre playback for a machine that should be screaming fast.
The biggest issue is that most people have is that updating OS X causes certain folders to be set to Read Only. See this blog post: Premiere Pro CC, CC 2014, or 2014.1 freezing on startup or crashing while working (Mac OS X 10.9, and later).
thisisironclad wrote:
Hello all,
I’ve been searching many forums for the better part of a day trying to get some workflow questions sorted. I’m experiencing (very) slow export times, and mediocre playback for a machine that should be screaming fast.
Here is what I’m working with:
2014 Mac Pro
-2.7 GHz 12-core intel xeon E5
-64GB Ram
-Dual AMD FirePro D700 6GB
-1TB Flash Storage
It's a nice base system. How about an additional speedy disk for media cache files. You also did not mention which version of OS X you are running.
thisisironclad wrote:
Software:
-Magic Bullet Looks 2.5.2
The Red Giant website does not indicate that this software is yet updated to work with Premiere Pro CC 2014.1 (8.1). Proceed with caution here.
thisisironclad wrote:
Issues I have:
-Playback is fine at 1/2 or even full, but once effects (especially magic bullet looks) start to go on the clips, it’s very choppy and has difficult playback at 1/4
I would not use this plug-in until you get the OK from the manufacturer.
thisisironclad wrote:
-Export times (especially with magic bullet looks) will take the better part of 1-4 hours for a video that is 3-6 minutes long. This doesn’t seem like it should be the case for a maxed out MacPro
Again, I suspect your plug-in.
Keep in mind that exports are largely CPU based but you can make sure that GPU acceleration is enabled for AME at the bottom of the Queue panel.
thisisironclad wrote:
So my questions are:
Do these seem like the right sequence/export settings for mastering at 1080p? If not, what would you suggest?
It's OK.
thisisironclad wrote:
Would using offline editing help at all?
No need when you should be able to edit natively. Relinking might also be an issue.
thisisironclad wrote:
Do you place your effects on adjustment layers?
That's one way you can do it with the benefit of being more organized.
thisisironclad wrote:
Have you stopped using third party plugins for their inefficiency in unreliability and switched to more integrated applications like SpeedGrade?
I do. Of course, that's a preference.
thisisironclad wrote:
Is there any other tweaks that you would suggest for RED workflow with PrPro?
Try the following:
Sign out from Creative Cloud, restart Premiere Pro, then sign in
Update any GPU drivers
Trash preferences
Ensure Adobe preference files are set to read/write(Hopefully you checked this out already)
Delete media cache
Remove plug-ins
If you have AMD GPUs, make sure CUDA is not installed
Repair permissions
Disconnect any third party hardware
If you have a CUDA GPU, ensure that the Mercury Playback Engine is set to CUDA, not OpenCLYou have AMD GPUs.
Disable App Nap
Reboot
thisisironclad wrote:
Should I consider switching to FCPX or (besides the iMovie-likeness) does it carry problems of its own?
I really shouldn't answer that question.
Hope this helps.
Thanks,
Kevin

Service of third party material

dear experts ,
I have a scenario wherein i want to sell a third party machine to a customer wherein my client acts as a middle man & no sale purchase agreements are made directly with the vendor & customer.
Further my client also wants to provide regular maintenance service for the same material .
How can this be mapped in SAP ?
Thanks

Hi
Third party sales means that material is not manufactured by us and the same is supplied to our customer from a third party vendor
We receive the sales order from our customer
Up on receipt of sales order or saving a purchase requestion is created automatically by the system
Then MM department process this purchase requestion and make a PO and that is send to a vendor
The vendor delivers the goods to our customer and he gives us the invoice
Upon receipt of invoice from the vendor we bill our customer
This a normal third party process
These whole settings are controlled by item category group and item category and schedule line category
For a third party material item category group defined in sales org data 2 tab of MMR is BANS
The item category determined in sales order will be TAS
The schedule line category determined in sales order will be CS
Thre are some very important settings in item category TAS and schedule line category CS which controls these whole 3rd Party Sales
There is another process is also practised (not so commonly) sometimes that is from vendor we take the goods to our plant and inturn we deliver to our customer
The item category determined in this case is TAB
the issue i think relates to this
Regards
Raja

Tax & Excise in Third Party Sales

Hi Friends,
As per Std.SAP in third party Sales Scenario a PR will be automatically created when we save the SO & out of that we create a PO.
Now kindly provide clarifications for the below query's
1. When we create a PO with respect to this PR (Is taxes & excise applicable) ?
2. How we have to maintain this Third Party Material in J1ID inorder to determine the excise rates for Calculation?
3. As per this Scenario our Vendor will deliver the goods to our customer & we will do a Statistical GR which will post to the consumption & GR/IR clearing accounts. Now what will the impact in Excise side as our material in the PO is subjected to excise?
4. Do we take the Cenvat credit as in case of Raw materials??
Since I am not clear in the excise & taxes part of this Scenario. Please help me..
Regards,

Excise Duty: Excise Duty is applicable only in an manufacturing scenario in India. I will illustrate with sone examples, as under:
Example 1:
Sales from Plant 'A', material 'B' (manufactured product) to Customer 'XYZ'.
Customer XYZ orders material 'B', which is supplied from plant 'A', say quantity 1. Sale Base Value is Rs. 100/-, Basic Excise Duty 10%, Education Cess 2%, Higher Education Cess 1%, Vat 12.5%
(Excise Duty will be applicable and reflect as a separate component in above scenario)
Example 2:
Stock Transfer from Plant 'A', material 'B' (manufactured product) to Plant 'D'.
Plant 'D' has a requirement for material 'B', which is supplied from plant 'A', say quantity 1. Assessable Value is Rs. 80/-, Basic Excise Duty 10%, Education Cess 2%, Higher Education Cess 1%
(Excise Duty will be applicable and reflect as a separate component, but Vat will not be applicable in above scenario)
Example 3:
Sales from Plant 'A', material 'B' (Trading product) to Customer 'XYZ'.
Customer XYZ orders material 'B', which is supplied from plant 'A', say quantity 1. Sale Base Value is Rs. 120/-, Vat 12.5%
(Excise Duty will not be applicable in above scenario)
Regards,
Rajesh Banka

Third party sales order report

Hi
I got to prepare a report and the description is as follows:
"Report for discount pricing conditions manually entered in third party sales orders."
"Discount price reporting for manual pricing conditions in sales order processing (not in billing)"
"The report should reflect manual pricing discounts captured in the third party sales order.The relevant (third party) document types will be confirmed.Currently we have the following pricing condition type used for manual discount: YRD2- Manual Distr. Discount % YRD3- Manual Distr. Discount fixedThis report will facilitate the monitoring on the discounts given to the distributors.We still need to confirm the complete list of discount pricing conditions for the report.The report should extract the manual discount information based on the following criteria:Sales organization, period, sales order, customer (wholesaler and/or third party) and pricing condition type.Summing per sales order, customer, period should be enabled.The discounts should be displayed in document (sales order) currency. "
I didnt understand the following to get the purpose of this report:
1. what is this third party sales order ?
2. What is manual pricing condition?
3. what is manual pricing condition? how many types of conditions are there like this?
4. What is the actual analysis that can be made from the output of this report?
Please explain them in detail. Thank you.

THIRD PARTY SCENARIO
In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. A sales order may consist partly or wholly of third-party items. Occasionally, you may need to let a vendor deliver items you would normally deliver yourself.
Process Flow
The processing of third-party orders is controlled via material types. Material types define whether a material is produced only internally, can be ordered only from third-party vendors, or whether both are possible. For example, a material that is defined as a trading good can only be ordered from a third-party vendor. However, if you manufacture your own finished products, you may also want, from time to time, to be able to order the same type of product from other vendors.
Processing Third-Party Orders in Sales
Third-party items can be created automatically by the system, depending on how your system is set. However, you can also change a standard item to a third-party item during sales processing manually.
Automatic third-party order processing
If a material is always delivered from one or more third-party vendors, you can specify in the material master that the material is a third-party item. During subsequent sales order processing, the system automatically determines the appropriate item category for a third-party item: TAS. To specify a material as a third-party item, enter BANS in the Item category group field in the Sales 2 screen of the material master record.
Manual third-party order processing
In the case of a material that you normally deliver yourself but occasionally need to order from a third-party vendor, you can overwrite the item category during sales order processing. For a material that you normally deliver yourself, you specify the item category group NORM in the material master.
If, as an exception, you use a third-party material, change the entry TAN to TAS in the ItCa field when processing the sales document. The item is then processed as third-party item.
If address data for the ship-to party is changed in the sales order in third-party business transactions, the changed data will automatically be passed on to purchase requisition and also to the purchase order ,if one already exists. In the purchase order, you can display the address data for the ship-to party in the attributes for the item.
You can only change the address data for the ship-to party in the sales order for third-party business transactions, and not in the purchase order.
Processing Third-Party Orders in Purchasing
When you save a sales order that contains one or more third-party items, the system automatically creates a purchase requisition in Purchasing. Each third-party item in a sales order automatically generates a corresponding purchase requisition item. During creation of the requisition, the system automatically determines a vendor for each requisition item. If a sales order item has more than one schedule line, the system creates a purchase requisition item for each schedule line.
Purchase orders are created from purchase requisitions in the usual way. For more information about creating purchase orders, see the Purchasing documentation. During creation of the purchase order, the system automatically copies the delivery address of your customer from the corresponding sales order. In a sales order, you can enter purchase order texts for each third-party item. When you create the corresponding purchase order, the texts are automatically copied into the purchase order. The number of the purchase order appears in the document flow information of the sales order.
All changes made in the purchase order are automatically made in the sales order as well. For example, if the vendor confirms quantities and delivery dates different from those you request and enters them in the purchase order, the revised data is automatically copied into the sales order
You process third-party items by creating a normal sales order. In overview for the order, you can then overwrite the default item category (TAN in the standard system) with the special item category for third-party items: TAS
Billing Third-Party Orders
If relevance for billing indicator for the item category has been set to B (relevant for order-related billing on the basis of the order quantity) in Customizing, the system includes the order in the billing due list immediately. If, however, the indicator has been set to F (relevant to order-related billing on the basis of the invoice quantity), the system does not include the order in the billing due list until an invoice from the vendor has been received and processed by the purchasing department. In the standard system, item category TAS (third-party order processing) has been given billing-relevance indicator F.
In the first case, the third-party order is considered to be completely billed only when the invoiced quantity equals the order quantity of the sales order item. In the second case, each time a vendor invoice is received, a customer invoice is created for the quantity in the vendor invoice and the order is considered to be fully invoiced until the next vendor invoice is received.
If you have activated billing-relevance indicator F for item categories in Customizing, billing can refer to the goods receipt quantity instead of the incoming invoice quantity.
You can control whether the invoice receipt quantity or the quantity of goods received is relevant for billing in Customizing for copying control for billing at item level.
FOR YOUR PROCESS Individual Purchase Orders WELL GIVE THE RIGHT SOLUTION
Individual purchase orders are used when your customer orders goods from you that are not in stock and must be ordered from one or more external vendors.
Process Flow
During sales order entry, the system automatically creates a purchase requisition item. The purchasing department creates a purchase order based on the requisition and the vendor ships the goods directly to you (unlike third party order processing, where the vendor ships directly to your customer). You then ship the goods to your customer. While the goods are part of your inventory, you manage them as part of the sales order stock. Sales order stock consists of stock that is assigned to specific sales orders and cannot be used for other purposes.
Goods receipt will be posted when ever the vendor ships the goods to our customer.
We will do this transaction in SAP using MIGO.
Invoice receipt is done when the Vendor sends us the invoice.. ( I.e Billing ).
It can be done using MIRO.
THe above two steps are standard and manual. There are many other ways that the actual process can happen. If the client follows EDI standards then the Goods receipt and Invoice receipt can be done through IDOCs automatically.
Process Flow for 3rd Party Sales
Customize the third party sales in summary:
Prerequisites for 3rd party sales,
Purchasing org,
purchasing group,
assign the Purchase org to company code
assign Purchase org to plant,
should not maintain the stock in material, it should be trading goods,
1. Create Vendor XK01
2. Create Material Material Type as "Trading Goods". Item category group as "BANS".
3. Assign Item Category TAS to Order type that you are going to use.
4. A sale order is created and when saved a PR is generated at the background
5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.
6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO
7. Goods receipt MIGO
8. Goods issue
9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.
10. Billing *--
Regards.

Third party logistics (TPL) Urgent

Hello everyone,
Can anyone help me with third party logistics (maintaining). To my understanding from:
"A third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or "third party" logistics services to companies for part or sometimes all of their supply chain management function. Third party logistics providers typically specialize in integrated warehousing and transportation services that can be scaled and customized to customers needs based on market conditions and the demands and delivery service requirements for their products and materials."(Resource: Wikipedia)
Cont: 3PL manages all the inventory of an organization (Warehouse management), maintaining handling units, packing the finished products, optimize routing and ship the finished products to customers. so, generally they stay next to manufacturing plant and carry out these activities. So, I'm comfortable in MM,WM and LE cycles. Can anyone help me what would be the difference from regular cycles as all the items are shipped through a seperate organization (Third party) . It would be great if some one explains it in the form of a scenario and various configurations involved and process flow (PO, GR and GI)
Hoping for a positive response from you, I take leave
Thanks & Regards,
Gandluri Srinivas

Hi,
I have worked on exactly this scenario at Japanese electronics company in the UK. They used a third party transport company situated next door (in the same building).
The solution is to NOT do anything differently, do NOT use complex third party orders etc. simply use the same process that you would normally use but let the TPL users enter the transactions directly in SAP as if they were your own employees.
They can manage the consignments, deliveries, goods issues etc. they can also manage the stock movements.
You obviously have to be careful with the authorisations but this should all be manageable.
So basically design the processes as if your own users were doing this and just allow the TPL users to post the transactions and view the delivery due list etc.
It sounds dangerous but remember that they are only processing the receipts from YOUR POs and the goods issues for YOUR Sales orders.
Steve B

Problem in third party sales

HI ALL
CAN ANY ONE GIVE ON THE BRIEF INTRODUCTION ON THIRD PARTY ORDER / INDIVIDUAL PURCHASE ORDER.
PLS GIVE ME REPLY ASAP.......
REGARDS
RAO

THIRD PARTY SCENARIO
in third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. A sales order may consist partly or wholly of third-party items. Occasionally, you may need to let a vendor deliver items you would normally deliver yourself.
Process Flow
the processing of third-party orders is controlled via material types. Material types define whether a material is produced only internally can be ordered only from third-party vendors, or whether both are possible. For example, a material that is defined as a trading good can only be ordered from a third-party vendor. However, if you manufacture your own finished products, you may also want, from time to time, to be able to order the same type of product from other vendors.
Processing Third-Party Orders in Sales
Third-party items can be created automatically by the system, depending on how your system is set. However, you can also change a standard item to a third-party item during sales processing manually.
Automatic third-party order processing:-
if a material is always delivered from one or more third-party vendors, you can specify in the material master that the material is a third-party item. During subsequent sales order processing, the system automatically determines the appropriate item category for a third-party item: TAS. To specify a material as a third-party item, enter BANS in the Item category group field in the Sales 2 screen of the material master record.
Manual third-party order processing
In the case of a material that you normally deliver yourself but occasionally need to order from a third-party vendor, you can overwrite the item category during sales order processing. For a material that you normally deliver yourself, you specify the item category group NORM in the material master.
If, as an exception, you use a third-party material, change the entry TAN to TAS in the ItCa field when processing the sales document. The item is then processed as third-party item.
If address data for the ship-to party is changed in the sales order in third-party business transactions, the changed data will automatically be passed on to purchase requisition and also to the purchase order ,if one already exists. In the purchase order, you can display the address data for the ship-to party in the attributes for the item.
You can only change the address data for the ship-to party in the sales order for third-party business transactions, and not in the purchase order.
Processing Third-Party Orders in Purchasing
when you save a sales order that contains one or more third-party items, the system automatically creates a purchase requisition in Purchasing. Each third-party item in a sales order automatically generates a corresponding purchase requisition item. During creation of the requisition, the system automatically determines a vendor for each requisition item. If a sales order item has more than one schedule line, the system creates a purchase requisition item for each schedule line.
Purchase orders are created from purchase requisitions in the usual way. For more information about creating purchase orders, see the Purchasing documentation. During creation of the purchase order, the system automatically copies the delivery address of your customer from the corresponding sales order. In a sales order, you can enter purchase order texts for each third-party item. When you create the corresponding purchase order, the texts are automatically copied into the purchase order. The number of the purchase order appears in the document flow information of the sales order.
All changes made in the purchase order are automatically made in the sales order as well. For example, if the vendor confirms quantities and delivery dates different from those you request and enters them in the purchase order, the revised data is automatically copied into the sales order
you process third-party items by creating a normal sales order. In overview for the order, you can then overwrite the default item category (TAN in the standard system) with the special item category for third-party items: TAS
Billing Third-Party Orders
If relevance for billing indicator for the item category has been set to B (relevant for order-related billing on the basis of the order quantity) in Customizing, the system includes the order in the billing due list immediately. If, however, the indicator has been set to F (relevant to order-related billing on the basis of the invoice quantity), the system does not include the order in the billing due list until an invoice from the vendor has been received and processed by the purchasing department. In the standard system, item category TAS (third-party order processing) has been given billing-relevance indicator F.
In the first case, the third-party order is considered to be completely billed only when the invoiced quantity equals the order quantity of the sales order item. In the second case, each time a vendor invoice is received, a customer invoice is created for the quantity in the vendor invoice and the order is considered to be fully invoiced until the next vendor invoice is received.
If you have activated billing-relevance indicator F for item categories in Customizing, billing can refer to the goods receipt quantity instead of the incoming invoice quantity.
You can control whether the invoice receipt quantity or the quantity of goods received is relevant for billing in Customizing for copying control for billing at item level.
FOR YOUR PROCESS Individual Purchase Orders WELL GIVE THE RIGHT SOLUTION
Individual purchase orders are used when your customer orders goods from you that are not in stock and must be ordered from one or more external vendors.
Process Flow
During sales order entry, the system automatically creates a purchase requisition item. The purchasing department creates a purchase order based on the requisition and the vendor ships the goods directly to you (unlike third party order processing, where the vendor ships directly to your customer). You then ship the goods to your customer. While the goods are part of your inventory, you manage them as part of the sales order stock. Sales order stock consists of stock that is assigned to specific sales orders and cannot be used for other purposes.
Process Flow for 3rd Party Sales
Customize the third party sales in summary:
Prerequisites for 3rd party sales,
Purchasing org,
purchasing group,
assign the Purchase org to company code
assign Purchase org to plant,
should not maintain the stock in material, it should be trading goods,
1. Create Vendor XK01
2. Create Material Material Type as "Trading Goods". Item category group as "BANS".
3. Assign Item Category TAS to Order type that you are going to use.
4. A sale order is created and when saved a PR is generated at the background
5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.
6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO
7. Goods receipt MIGO
8. Goods issue
9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.
10. Billing *--
SD - 3rd party sales order Create Sales Order
VA01
Order Type
Sales org, distr chnl, div
Enter
Sold to
PO #
Material
Quantity
Enter
Save
SD - 3rd party sales order View the PR that is created with a third party sales order
VA01
Order Number
Goto Item Overview
Item ->Schedule Item
SD - 3rd party sales order View the PR that is created
ME52N
Key in the PR number
Save
SD - 3rd party sales order Assign the PR to the vendor and create PO
ME57
Key in the PR number
Toggle the "Assigned Purchase Requisition"
Execute
Check the box next to the material
Assign Automatically button
Click on "Assignments" button
Click on "Process assignment"
The "Process Assignment Create PO" box , enter
Drag the PR and drop in the shopping basket
Save
SD - 3rd party sales order Receive Goods
MIGO_GR
PO Number
DN Number
Batch tab , click on classification
Serial Numbers tab
Date of Production
Flag Item OK
Check, just in case
Post
Save
SD - 3rd party sales order Create Invoice
MIRO
Invoice Date
Look for the PO , state the vendor and the Material
Check the box
Click on "Copy"
Purchase Order Number (bottom half of the screen)
Amount
State the baseline date
Simulate & Post
Invoice Number
*Invoice blocked due to date variance
SD - 3rd party sales order Create a delivery order
VL01N
In the order screen , go to the menu Sales Document , select "Deliver"
Go to "picking" tab
State the qty and save
SD - 3rd party sales order Create a billing document
VF01
Ensure that the delivery document is correct in the
Enter
Go to edit -> Log
Save

Problem in third party sales scenario

Hi all,
When i'm creating sales order for third party i'm not getting purchase requistion number and when i'm enter third party in sales order system displaying message like " Puchase requistion can only be created for items assigned to plant. Please solve my issue.
Thanks and regards
Keshav

Hi
In standard SAP, item category TAS is used for this. The schedule line category is CS. Here you can see a field 'order type' with value 'NB'. This triggers the automatic creation of the PR.
Plus in the material master also you need to do certain settings.
1) If you are always following a third party process for a material then you have to create the material using item category group BANS. The procurement type should be marked as external procurement (F) in MRP 2 view of the material master record.
2) If you are not always allowing third party order processing then you can create a material master record with item category group as NORM and the procurement type should be marked as (X) meaning both types of procurement (in house manufacturing and external procurement).
In the item category the billing relevance should be 'F'.
With Regards
baalakrushnan.da

Excise in third party scenario

Hi
In third party scenario as we will not delivery the goods to the customer but we invoice the customer,So in this case how will we send the excise document to customer.
As the delivery is not available in the system.
Is this through J1IH.
Please can any one let us know the process which need to be follwed.
Thanks alot.
Regards,
Kumar

Dear Friend,
From your reply, order related billing and vendor sends invoice to you. and then you generate the Customer Invoice against the Vendor invoice and mention the duties being paid by Vendor. (Vendor need to pay the excise duties when he delivered the goods to customer and the same can send
Instead of raising the Excise invoice to the customer, you can raise debit note for the amount he is supposed to pay (based on the vendor sent invoice).
As per Indian tax system, Excise duty (16%) is payable by each manufacturing unit on the value of manufactured goods / on the value added,here in your case you are not the manufaturer.
Please note that it is "NOT POSSIBLE" to create a excise invoice for order related billing in J1IIN transacton.
Normally excise invoice is created when there is a goods movement. J1IIN transaction is programmed in such a way
it will check the delivery document when you enter the billing document to create the excise invoice.
Regards
AJIT K SINGH

Third party Manufacturing

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