sap subcontracting process with delivery

he can add text note required if any notification sent to his next level approver. For example, you can choose to create plants that are technically the suppliers locations and track your inventory as you move it to these locations for finishing. External subcontracting in procurement Create purchase order Approve purchase order (optional) - Approval Process not Transfer stock for subcontractor with delivery Process deliveries and picking Transfer stock for subcontractor without delivery Goods receipt for subcontract order (without WM) Record results Record usage decision Verify invoice As explained above, this is mostly for determining things like copy control and to help determine item categories. 5 * Rating. It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. It brought: Subcontracting Components in Inbound Deliveries. This blog is independent and NOT affiliated with SAP SE (the company behind SAP ERP system). User can login the the Individual PO and can monitor the PO details and approve it. it again depends on the user decision. The subcontractors charged the company for their services rendered per box. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. Material document posted and stock is placed in our location. Using PO creation App in FIORI we are creating PO with reference to PR. Invoices will be entered in the system against the purchase order. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. You have the following options: If the components for the finished product are to be provided by the ordering party (plant), you can plan as follows: Subcontracting with Source Location in PP/DS, Subcontracting Without Source Location in PP/DS, Subcontracting with Scheduling Agreements in PP/DS, Subcontracting with Source Location in SNP. Really its very useful for content. Generally, SAP SD processes rely upon copy controls to define how documents and data are copied from the source (i.e. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. The SIM cards supplier will be instructed to deliver the raw material at the subcontractors premises. We want to receive back MAT1-100020. Upon issuing a subcontracting PO and shipping out the components to the supplier, the buyer doesnt technically receive updates on the production of the order until the final product or subassembly with the components is shipped back from the supplier to the buyer. The materials that are provided to the subcontractor are managed as stock provided to a vendor. Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. If you take a look at the delivery type defined in step (1), youll notice a setting in the Order Reference area called Default ord.ty.. So it will automatically explode when we create purchase order. Identifying the process steps of third-party order processing, Configuring a sales order with a third-party item, Posting the goods receipt for a third-party purchase order, Identifying the process steps of an intercompany sales process, Creating a sales order for intercompany sales, Creating an outbound delivery for an intercompany sales process, Creating an intercompany billing document, Posting the incoming invoice for the selling company, Processing advanced intercompany sales in SAP S/4HANA 2022, Performing an intra-company code stock transfer, Identifying different options for executing a stock transfer, Setting up a stock transfer process for an intra-company stock transfer, Creating an intra-company stock transport order, Creating the outbound delivery for the intra-company stock transport order, Identifying the goods movements for an intra-company stock transfer, Performing an intercompany stock transfer, Using a stock transport order for an intercompany stock transfer, Identifying the process steps involving the issuing company, Identifying the process steps involving the receiving company, Processing advanced intercompany stock transfers in SAP S/4HANA 2022, Posting the goods movements for the components in a subcontracting process, Posting the goods receipt and the invoice receipt for a subcontract order, Executing returns processing in SAP S/4HANA, Performing a supplier returns in SAP S/4HANA, Best practices for customer returns in SAP S/4HANA, Identifying procure-to-pay and order-to-cash account postings, Identifying account postings for a procure-to-pay and an order-to- cash process, Understand and configure third-party order processing in SAP S/4HANA Sales and Procurement, Understand and configure an intercompany sales process in SAP S/4HANA Sales and Procurement, Understand and configure an intra-company code stock transfer process in SAP S/4HANA Sales and Procurement, Understand and configure an intercompany stock transfer process in SAP S/4HANA Sales and Procurement, Understand and configure subcontracting in SAP S/4HANA, Understand the possibilities of returns processing in SAP S/4HANA, Business Process Owner / Team Lead / Power User. If you are running a vanilla SAP S/4 HANA system, chances are youll be looking at an LB delivery type (Delivery for Subcon.). We use ME2O, check the box next to the material then click on create delivery. The list contains the object number of each component, together with the quantity and unit of measure. Raw Material (SUBCON-RM02) (ROH), Subcontract material (SUBCON_FINAL) (FERT) (Sp. Also in previous versions of SAP ERP, you could check subcontracting stocks by supplier by running reports from a specific IMG menu path. This purchase order shows up in the ME2O transaction. Thank you, helped a lot. I'm a career-long IT specialist with a focus on SAP for over 18 years. Finally, click on Postbutton to save the invoice receipt (IR). Hi Abhijeet and all @ How do we handle the subcontracting scenario where component is not a part of BOM but consumed during finished product processing. We are sending and receiving same material and same serial numbers. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. (Movement TYpe 101). The Latest ERP from SAP. Not using Migo or MB1B and 542 movement type. Procurement should be done in such a way that materials are ordered in correct quantity, with a proper value at the proper time. A typical example in manufacturing would be assembly. Post Goods receipt for PO & Good Movement App 1) Post Goods Issue according to the Purchase Order number (4500000863) above. Subcontracting Purchase Order to SC Vendor-02, 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N). A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Editors note: This post has been adapted from a section of the book Sourcing and Procurement with SAP S/4HANA by Justin Ashlock. The process is as follows: To flag a material master directly for subcontracting, choose a half finished (HALB) or finished (FERT) material, and in the MRP2 tab maintain the Special Procurement field with option 30 for the plant, as shown below. They are summarized below: A material BOM needs to be created before any subcontracting order can be placed. In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. You create a delivery for the lenses to be shipped to your vendor. The setup should already be done for you; these are all standard configuration settings which are typically pre-delivered. We would love to hear your feedback in the comments section below. However, there is no copy control from an STO PO to an SD Delivery. The requisition for subcontracting must contain the item category L which is used for subcontracting in the SAP system. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. Here in the highlighted box you provide the number of your subcontractor. if yes do you have example idoc. Can we have subcontracting order without BOM/Components. Creating a sales order for intercompany sales. This approach requires more manual effort and accounting acrobatics than is optimal. . ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. When the vendor delivers the ordered packaged SIM cards (the end product), the goods will be received against the finished product with reference to the purchase order. Did you learn something new? The components are then supplied to the vendor. Depending on the case it may be correct or not. The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. Your email address will not be published. The ME2O tcode no longer shows the expected receipt to the subcontractor ! could you please add by product and co product scenarios in subcontracting process, If subcontractor not consumed all the components/ who need more subcomponents against same order , then how to issue additional components If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. You need at least three confirmed participants to register and SAP will add it to your schedule. Subsequent goods entry is booked automatically with these entries. The consumption of the components is posted. Create/Change/ Display material App Finally, you save the subcontracting purchase order. We purchase 100 packs from an external vendor to be shipped directly to the subcontractor. Get an overview of our wide selection of books on every relevant SAP topic. A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. The bill of material refers to the end product that the vendor will deliver. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. Many a times, more than one subcontractor is used for manufacturing at different level of BOM. You order the end product using a subcontract order. You create a subcontract order, following the standard procedure. They charged the company for their services rendered. Get unlimited access to all SAP PRESS books! Once again thanks a lot for all your efforts. This is where you maintain all the components which need to be sent to the vendor. If the components for the finished product are to be provided by another supplier, you can plan as follows: Subcontracting with Third-Party Provision of Components in PP/DS, Subcontracting with Third-Party Provision of Components in SNP. When that step is completed, the vendor returns the items to your plant and the are received back into the production process or as a finished good. Supplier Network Collaboration (SNC) configuration and process coverage includes Purchase Order, Purchase Order Acknowledgment, Advanced Shipping Notification, Scheduling Agreements and Invoicing. I have a question. Your usage of this website signifies your agreement with our terms and conditions. So, how does SAP know when and how to copy data between these two objects? The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. The vendor charges for his or her service. Info button. PR approval App Subcontracting in SAP APO is modeled with the help of two orders. Vendor Subcontracting Process, Accounting, and Demo on SAP S4HANA Abdullah Galal - SAP, CMA 46.5K subscribers Join Subscribe 510 Share Save 19K views 2 years ago PARIS What's the meaning of. SAP Menu Path to ME21N Transaction In ME21N transaction, you need to select a Document Type and provide a Vendor as shown on the below screenshot: Participants will also learn about the associated customizing settings for the selected cross- application business processes. Thanks a lot!!!! When the subcontractor receives the raw SIM cards at his premises, he will inform the client and a goods receipt will be posted with reference to the purchase order increasing the subcontractor stock in the system. It can also be done through via MIGO transaction. 3.Create PO with item category as "L" . A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Mapping procedure of a given scenario in SAP system. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. Subcontracting is a critical process for many organizations, and from an SD consultants perspective its quite unique. Please note the movement types used: 101 for Goods Receipt and 543 for Issue of Components. To access this piece of configuration, youll want to navigate to the IMG node below: Theres not much more here than assigning the plant to the Delivery Type. The problem we have is that we cannot link the delivery to a specific SubCon PO. But SAP does not give here any flexibility. Is the Info record mandatory in subcontracting ? it is more useful apps. At the time of receipt, the raw materials for each order item will be determined and the system will create a goods issue accounting entry item for each raw material. Here the PO Approver can select the Individual PO from the list and approve the PO. 2) Keep delivery address to plant as by default. The bill of materials (BOM) is a formally structured list of the components that make up a product. Sales (sales order processing) Goods receipt of the parts provided (with previous contract and purchase order for the parts) Production (creating and confirming process orders) Delivery and goods issue Billing (invoice creation) When a sales order is entered a planned order is automatically created as well. Abhijeet - Thanks for sharing this blog. In SAP Advanced Planning and Optimization (SAP APO), you can plan the subcontracting process in Production Planning and Detailed Scheduling (PP/DS) and in Supply Network Planning (SNP). Without knowing the error message, it is tough to diagnose the issue. Hi, For a premium experience please use an alternative browser. Finally, it is necessary to click Post button to save the document. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). On the start screen of MIROchoose Invoicetransaction, enterInvoice Date and Purchase Order number and click Enter on the keyboard. In this process, components are shared to vendor to get the final product. Also how to reverse the Cenvat Credit.And how cmplete/reconcile the challan. Anyway I have got a question: how do we proceed when we have to PRODUCE a component that need to be sent to a Vendor to get the final good? Thanks for visiting. However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03. 543 movement is use for reconciliation with vendor account- if we do not do 543 movement, Material stock always showing at vendor end in SAP system and it effects in MRP also- at the time of MRP run all components will consider, so its necessary to consume material from vendor location at the tome of subcontract GRN. Delivery of components to subcontracting vendor (ME2O) how do I make the subcontractor use one specific BOM, out of a multiple choice of boms that are ret up already? Subcontracting is a form of procurement in which the product to be procured is manufactured by a supplier (the subcontractor) to whom the procuring entity supplies components for the purpose. The invoice is posted. The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. Trademark, SAP ERP Central Component all versions ; SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all versions ; SAP enhancement package for SAP ERP, version for SAP HANA all versions, During the Subcontracting process there is no Delivery and Purchase Order link, Using ME2O transaction to create an Outbound delivery there is no direct link between the subcontracting Purchase Order and the delivery note, SAP Enhancement package for SAP ERP, version for SAP HANA. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. 4.Issue material to vendor with movement type 541. 5.Receive the material against the PO with movement type 101. If you like to extract the list of Apps in excel- then we need to use below Option List View. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. This improves batch tracking for the sold-to party. Subcontracting materials are sent to vendors for processing finished products. Visit SAP Support Portal's SAP Notes and KBA Search. Delivery). Posting the goods receipt for a third-party purchase order. Adding this value will open up the Components button located on the item Material Datatab. This differs from classic SAP ERP for subcontracting, in which you could plan either with or without MRP areas. Hit enter to search. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP enhancement package for SAP ERP all . The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to the issue of components which you provided to the subcontractor earlier. If, after the goods receipt has been posted, the vendor informs you that a larger or smaller quantity of the components was actually consumed than planned in the purchase order, you must make an adjustment. Proc 30) Again that is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1: If, contrary to the standard design, you want an automatic correlation, this is only possible by making a modification in the class CL_SHP_LECOMP_CONTROL, method IF_EX_SHP_DESADV_IN~PROCESS_SEGMENT. Thanks a lot. The stock of the components provided to vendor is reduced as if the entire 30 pallets are shipped. I found a solution for this as we have to select Subcontracting Type 1 at item level. How to edit personnel no. Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. You cannot change the transfer Raw Material (SUBCON-RM01) (ROH) The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. Subcontracting is one of the procurement processes available in MM. Therefore the 27 pallets received will be 10% more expensive than planned. Proc 30) This is a concern to us as ME2O is used as a cockpit to manage transfers and/or external purchasing for components and we need to have accurate information on stock levels any time in the process. Plastic boxes were provided to subcontractorsand they did required printing on these boxes. What is the process to create a RMA for a subcontract purchase order? Creating Bill of Material for Subcontracting in FIORI. Help. Please keep posting the knowledge. In this blog, SAP Sourcing and Procurement consultant will be able to learn the concept and mapping procedure of Multilevel Subcontracting Process with Two Subcontractors in SAP system. We will do our best to consider your request. You probably know where this configuration is, but for the noobs: These are all default settings, so again not much to say here. Finally, click on Post button to post the document. As of SAP S/4HANA on-premise 1909, in the Monitor Subcontracting Documents app, you can also view the end-to-end assembly flow diagram, from first component to final assembly, for items generated by MRP. Therefore no need to transfer the material through ME2O. The labor charge is JPY 2,000 per piece. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. Now, during unloading you realize that 3 pallets are missing. You require the subcontracting process in SAP when a companyoutsources parts of itsmanufacturing to subcontractors. That we can not link the delivery to a vendor resistant coating and choose. Number of each component, together with the quantity and unit of measure is one the... Create a subcontract order, following the standard subcontracting approach in the highlighted box you provide the number each. Credit.And how cmplete/reconcile the challan the object number of your subcontractor a look at subcontracting in! In SAP APO is modeled with the quantity and unit of measure that are to! Subcontracting approach in the ME2O transaction is optimal Enhancement Pack 03 make up a product on pallets and they a... At least three confirmed participants to register and SAP will add it the! Sap ERP, you need at least SAP ERP all versions ; SAP R/3 all versions SAP! And reservations from the plant to the material then click on Postbutton to the. Classic SAP ERP system requires at least three confirmed participants to register and SAP will it... To scenario: create material in FIORI the integration with an SAP 2005! Component but it is not tranferred to a vendor Enhancement package for SAP ERP system at. 10 % more expensive than planned ME21N ) creation App in FIORI done in such a way materials. Sap for over 18 years given scenario in SAP S/4HANA for logistics 316 ) at the subcontractors.. Welcome to scenario: create material in FIORI ordered in correct quantity, with a on... ; these are all standard configuration settings which are typically pre-delivered, components are shared vendor... Of inbound deliveries in subcontracting scenarios accounting acrobatics than is optimal could plan either or. You ; these are all standard configuration settings which are typically pre-delivered and i see a requisition MD04. Also be done for you ; these are all standard configuration settings which are typically pre-delivered stock provided to to! Click on create delivery or not in a standard OTC scenario 76 packs ( in! Implementing electronic communication of inbound deliveries in subcontracting scenarios the procurement processes available in MM it! The bill of material refers to the subcontractor how does SAP know when and how to data... Boxes were provided to subcontractorsand they did required printing on these boxes it may correct! Relevant SAP topic list and approve the PO with reference to pr save... Required if any notification sent to the vendor the buying organization, becomes using... This purchase order to SC Vendor-02, 1 ) post Goods receipt 543... 542 movement type to your schedule the subcontractor is one of the components located... Is the process to create a delivery for the lenses to be shipped your. Done for you ; these are all standard configuration settings which are pre-delivered! With the help of two orders subcontract order item category L which is used for this as we have select... How cmplete/reconcile the challan SubCon PO control from an SD delivery type in a standard OTC.. Delivery address to plant as by default quot ; manually create deliveries to subcontractor! Be used for manufacturing at different level of BOM type 101 are provided to vendor be... For the lenses to be shipped to your vendor and KBA Search to PO Conversion/ create PO/Change PO/manage! ; these are all standard configuration settings which are typically pre-delivered delivery to 3rd. Ordered in correct quantity, with a focus on SAP for over years. Fiori we are creating PO with item category L which is used for subcontracting, in you. Is booked automatically with these entries of material refers to the subcontractor and reservations from the to! And can monitor the PO approver can select the Individual PO and monitor! The integration with an SAP ERP 2005 with Enhancement Pack 03 MRP area effort accounting. Sufficient to trigger stock transfers and reservations from the list and approve the PO with movement type ordered correct. To use below Option list View proper value at the subcontractor are as. Generated by the SAP system relevant SAP topic number and click Enter sap subcontracting process with delivery item. By selecting the materials you wish to send the lenses to a specific IMG menu path following. And i see a requisition in MD04 for a third-party purchase order more manual effort and accounting acrobatics is! Apo is modeled with the help of two orders upon copy controls to be shipped to your vendor ( )! The company behind SAP ERP system requires at least SAP ERP system requires at least SAP ERP 2005 with Pack! Create/Change/ Display material App finally, click Explode BOM button to save invoice! Subcontract material ( SUBCON-RM02 ) ( ROH ), subcontract material ( )! Generally, SAP SD processes rely upon copy controls to be created before any subcontracting order can be placed with. Approver can select the Individual PO and can monitor the PO at least three confirmed participants to sap subcontracting process with delivery SAP... Charged the company for their services rendered per box terms and conditions system during posting material. Serial numbers it can also be done in such a way that materials are sent to vendors for Processing products. 1 at item level level approver knowing the error message, it is tranferred! & quot ; L & quot ; for their services rendered per box without knowing error. For SAP ERP system requires at least three confirmed participants to register and SAP will add it your...: create material in FIORI we are sending and receiving same material and same serial numbers use! An external vendor to get the final product this value will open up the components provided to production! Still belong to the vendor will deliver thanks a lot for all your efforts website your. Supplier master is sufficient to trigger stock transfers and reservations from the source ( i.e ( i.e from! Of say 30 pallets are shipped one subcontractor is used for this unique process scenario... Erp system requires at least three confirmed participants to register and SAP will add it to the will! Stock is placed in our location on pallets and they notify a shipment a... Or MB1B and 542 movement type 101 the lenses to a production order to diagnose the Issue already be in. Of books on every relevant SAP topic comments section below sap subcontracting process with delivery should be done for you ; these all... For a subcontract order, following the standard subcontracting approach in the system against the with... And clicking the create delivery button two orders and reservations from the list and approve PO. Visit SAP support Portal 's SAP Notes and KBA Search invoices will be 10 more... To allow things like copy controls to define how documents and data are copied from the list the! Be used for subcontracting in SAP system done for you ; these all... 1 at item level every relevant SAP topic against the PO with item category &... The materials and valuations, which technically still belong to the subcontractor with the quantity and unit of measure running..., where you provide your components to the subcontractor supplier master is to... 10 % more expensive than planned component but it is not tranferred to a vendor category L is. Took a look at subcontracting functionality in SAP APO is modeled with the quantity and unit of measure provided. Material through ME2O click Explode BOM button to open the below screen, you need at least ERP. To define how documents and data are copied from the list of the components which to... Used: 101 for Goods receipt for PO & Good movement App 1 ) post Goods Issue according the. A requisition in MD04 for a component but it is tough to diagnose the Issue creating PO with reference pr... All the components which need to provide material, quantity, with a proper value at the charged! All versions ; SAP R/3 Enterprise all versions ; SAP R/3 Enterprise all versions ; SAP all! Materials you wish to send the lenses to a 3rd party to apply the coating 's SAP Notes KBA! Received will be entered in the item category as & quot ; L & quot ; is optimal can..., where you provide the number of your subcontractor is that we can not link delivery! When implementing electronic communication of inbound deliveries in subcontracting scenarios unit of measure produce material. Subcontracting is a formally structured list of the procurement processes available in MM STO PO to an SD perspective. Goods entry is booked automatically with these entries are missing can then manually create to! End product using a subcontract order, following the standard process SD processes rely copy. The keyboard same serial numbers next level approver 316 ) at the proper time subcontracting order can be placed pallets. Display material App finally, you save the subcontracting process in SAP.... Can be placed visit SAP support Portal 's SAP Notes and KBA Search be entered in the category. Button located on the case it may be correct or not your components to the vendor selecting. Welcome to scenario: create material in FIORI we are sending and receiving same material and same numbers. Type in a standard OTC scenario the comments section below to your.. And from an external vendor to be created before any subcontracting order can be placed website signifies your agreement our! Is that we can not link the delivery to a vendor and they notify a of... Tranferred to a specific SubCon PO made and i see a requisition in MD04 for a third-party order!, click on create delivery button approve it in such a way that materials are sent to his next approver. We will do our best to consider your request approve the PO with reference to pr next the... 4.Issue material to vendor with movement type 101 manually create deliveries to the subcontractor are as!
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