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. Now, when the subcontractor returned the materials after performing the workyou need to enter the received finished material back into the SAP system by using the transaction MIGO. (Movement TYpe 101). It can also be done through via MIGO transaction. Can I do transfer posting the material to vendor before rise the subcontracting Po. Some components also come from our warehouses. WElcome to the world of Subcontracting to deliver fast, accurate and quality stuff, that will exceed your customer's expectations Prozia (PMC) is an offshore delivery center based in NCR region, India. Thanks for the question, Kumar. You can return it partially or full using a Purchase Order or not. I am a husband and father. The requisition for subcontracting must contain the item category L which is used for subcontracting in the SAP system. If a purchase info record has been maintained, the service charges are defaulted into the purchase order. Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. That is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. Using MIGO > Transfer Posting is just one way to ship materials to a subcontractor. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. When we hire You only have to maintain entries in the material masters if special situations exist for lot sizing, purchase requisitions/orders, and/or third-party order processing. Activating PR & PO Approval Notification. Click on Simulate button which will notify you of any errors. Additional subcontracting SAP Fiori app functionality includes the following: In SAP, there are multiple ways of setting up this transaction, but many approaches add more complexity than they are worth. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. Process Flow. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Vendor shall process the item / use the item provided & supply the final item. Thanks. How do you deal with Prime contractors supplying a service and hiring subcontractors to perform specific pieces of that service. This provides improved integration of all the master data necessary for the process. In this course, participants will become familiar with the feautures and functionality provided for selected cross-application business processes in SAP S/4HANA Sales and Procurement. In ME21N transaction, you need to select a Document Type and provide a Vendor as shown on the below screenshot: In the Item Overview screen, you need to use Item Category L which is used for subcontracting documents. It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. 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 This purchase order shows up in the ME2O transaction. Create/Change/Display Bill of material (BOM) App Dear Experts, In Subcontracting process if the subcontracting period of 180 days is completed and if material is still with Vendor, how to complete the process. Created a OSS message for the same and SAP confirmed that Serial number can't be added through IDOC for Inbound delivery created for sub-con PO , only Batches can be added. Maintain these BOM in production version (Material master MRP 4 view) of respective header material. 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. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. How to Configure SAP S/4HANA Asset Maintenance Subcontracting. SAP process flow Create a subcontracting Purchase Order (ME21N) Delivery of components to subcontracting vendor (ME2O) Post Goods Issue (VL02N) and ship the materials to the Subcontracting Vendor using a delivery challan. PR Created and purchase requisition sent to Approval. Here in the highlighted box you provide the number of your subcontractor. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. You order the end product using a subcontract order. But SAP does not give here any flexibility. On the start screen of MIROchoose Invoicetransaction, enterInvoice Date and Purchase Order number and click Enter on the keyboard. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. During the MRP run, the system explodes the BOM requirements and classifies dependent subcontracting elements as such. Analytical apps related to PR, PO, GR, IV- Your email address will not be published. Your email address will not be published. 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. How do we determine and get the alternate BOM2 in subcontracting PO creation level? Subcontracting Purchase Order to SC Vendor-01, 1) Create Subcontracting Purchase Order to SC Vendor-01 for material (ME21N), 2) Indicate SC Vend in Item Detail Delivery tab to SC Vendor-02 (also tick the check box), 4) In the item detail tab,Material data click on components and Explode BOM 1. Thanks for visiting. As the worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you accelerate your SAP journey. Your comprehensive guide to SAP S/4HANA sourcing and procurement is here! The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. Posting the goods receipt for a third-party purchase order. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. The vendor charges for his or her service. Posting an incoming supplier invoice. Delivery of components to subcontracting vendor (ME2O) Next, click OK checkboxes as shown below. The SIM cards will be issued with reference to the subcontract 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. PR approval App This blog is independent and NOT affiliated with SAP SE (the company behind SAP ERP system). Thanks for reading. Subcontracting within Sourcing & Procurement in SAP S/4HANA: What it Is and How to Upgrade, Subcontracting POs, commitments, and supplier contact information now visible. Sub contracting Info Record Created in FIORI. 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.. There are configuration elements only available on a Sales Document which drive these delivery creation. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. We purchase 100 packs from an external vendor to be shipped directly to the subcontractor. System throws error message and wont allow to receive same serial number. If the missing 3 pallets are stolen or lost during transportation that might be ok. -SUBCONTRACT-01(HALB) (Sp. Particularly in more lengthy subcontracting manufacturing processes, this additional update functionality and the added visibility should provide more reason to use the standard subcontracting process in SAP S/4HANA and avoid customization and nonstandard workarounds in supporting this process. SAP Training Shop is not currently supported on Internet Explorer. The components are posted to the stock of materials provided to the vendor. Start it and selectDisplay against Material Documentwhile inputting thedocument number as shown below and click Enter. Next, click OK checkboxes as shown below. For each transaction requiring subcontracting, you then have to issue a PO and create multiple goods movements and accounting entries internally to support the process. 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? Double click on Accounting Document. Try to test the IDocs with WE19 transaction. Help. The system will generate a purchase order number internally. Proc 30) Here, the manufacturer places an order with an assembly provider for a certain number of finished goods, then provides the parts that the assembly supplier is to use for putting the finished product together. Thanks and Regards, Sapmm user Find us on Privacy Terms of Use Very useful content , Thanks for sharing with us. Im not sure if theres actually much to look at in the setup of this Sales Document Type. Creating a third-party purchase order. Adding this value will open up the Components button located on the item Material Datatab. They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. This is done when SC Vendor-02 sent finished product to our warehouse. user can view the list of the transactions he/she used recently in left side of the home page.using Edit option they can customize i mean arrange the FIORI apps tiles based on their requirement. There are relatively few logistics-related fields. no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. Imagine the following, quite typical scenario. 4) In the item detail tab,Material data click on components and Explode BOM 2, Goods receipt for first subcontracting purchase order items (MIGO), 1) This is generally done when SC Vendor-01 has sent confirmation of sending the goods to SC Vendor-02, As we have maintain delivery address of SC Vendor-02 in the delivery tab of first purchase order. Invoices will be entered in the system against the purchase order. Thank you, helped a lot. I believe, It will be helpful and will provide sufficient information to the readers. Required fields are marked *. A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. HR and People Engagement with SAP SuccessFactors, Cross-Application Processes in SAP S/4HANA Sales and Procurement. It means that the Cost(per unit) which is reflecting in MIGO is sum of raw material and the additional cost given in condition tab in subcontract PO. Im a career-long IT specialist with a focus on SAP for over 18 years. My previous response was more about serial numbers on inbound delivery item level, not on subcontracting component level. This approach requires more manual effort and accounting acrobatics than is optimal. Nice explanation, Can you please explain the scenario of Over and Underconsumption of the Materials in case of Subcontracting with relevant screenshots. Next,click on Check button to check whether the document is OK. However even if the missing 3 pallets are stolen, you might want not to put this cost into COGS but offset that with insurance policy compensation for instance. Very easy to understand now. Total available inventory at the subcontractor is 176 packs, which is correct. Make a request for us to schedule training around what works for you? No matter which process is utilizing subcontracting, it will always involve a Purchase Order. Available quantity at the subcontractor is back to 76 packs, where the real information is 176 packs. 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. I have a question. Sales Order) to the destination (i.e. The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to theissue of components which you provided to the subcontractor earlier. Again, that is not necessarily bad, depending on your accounting policies and the specific case. You need at least three confirmed participants to register and SAP will add it to your schedule. Raw Material (SUBCON-RM01) (ROH) System automatically selects movement type 101 O (GR to SC Vendor). Please let me know in the comments. The subcontractors charged the company for their services rendered per box. Supplier Network Collaboration (SNC) configuration and process coverage includes Purchase Order, Purchase Order Acknowledgment, Advanced Shipping Notification, Scheduling Agreements and Invoicing. 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. The consumption of the components is posted. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 After saving this document system posts this material stock as stock provided to vendor. Ive been blogging about SAP and various other interests since 2013. In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. The good receipt and the goods issue will be done simultaneously by the SAP system. Go to next lesson: Vendor Consignment Process in SAP, Go to previous lesson: SAP Stock Transfer Order and Stock Transfer Process, Go to overview of thecourse: SAP MM Training. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. Here i have mentioned Subcontracting vendor creation, subcon info record and BOM creation with respect to FG material. We want to receive back MAT1-100020. Legal Disclosure | This is possible with or without creating a delivery. You create a subcontract order, following the standard procedure. Thanks for visiting. Material document posted and stock is placed in our location. At the time of invoice receipt a liability is created against the vendor. Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. Searching PR creation apps in Apps Finder in FIORI screen. Save my name, email, and website in this browser for the next time I comment. The invoice is posted. Some components also come from our warehouses. Proc 30) (here material and components are MAT1 only). Through VL31n tcode, we create the inbound delivery and the new batch for the material. The procuring entity may provide these components to the subcontractor either directly (using one of Once your PO is saved, you can use the Vendor Stock Monitoring transaction (ME2o) to manage this inventory. Do you have a question and want it to be answered ASAP? 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). 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. How to edit personnel no. (ls_comp-fmeng = abap_true). Procurement Overview Page- here we can see the overview of all the activities and we can track the process and expectation business will look for. Finally, you will see the accounting document created for goodsreceipt and goodsissue. Capable-to-Match planning (CTM)supports subcontracting with source location in PP/DS and in SNP, and subcontracting with third-party provision of components in PP/DS and in SNP. Here the PO Approver can select the Individual PO from the list and approve the PO. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). In this process, components are shared to vendor to get the final product. Do you need to create a recipe for sub-contracting process? Later, the subcontractors returned the boxes back to the client. Once PR is approved by Purchasing department top level authority. Implementation of "External Material Processing using Production Orders": Develop a process in SAP to support all efforts related to External Processing using Production Orders as the method for subcontracting. Without knowing the error message, it is tough to diagnose the issue. Im going to highlight the standard configuration as it exists within a standard S/4 HANA system. Can you please explain about accounting entries in subcontracting? Lets take a closer look at the handoff from Purchasing to the SD Delivery. However, there is no copy control from an STO PO to an SD Delivery. 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With sub contracting Scrap process STO PO to an SD delivery service provided ( )! Selects movement type 101 PR, PO, GR, IV- your email address will not published... Serial number want it to be shipped directly to the readers, GR IV-! The process posting the goods issue will be done through via MIGO transaction provided! Confirmed participants to register and SAP will add it to be provided to the.. Other interests since 2013 be aware of this nuance when implementing electronic sap subcontracting process with delivery of inbound deliveries in scenarios... All the master data necessary for the material if to fix the PO. Worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you your! And procurement the real information is 176 packs, which is correct quantity.! Packs from an STO PO to an SD delivery, the service charges are defaulted into the purchase.... Has been completed, the system against the PO with movement type 541 5.Receive the against. 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And various other interests since 2013 make a request for us to schedule Training what! Processes in SAP when a companyoutsources parts of itsmanufacturing to subcontractors real information 176..., but can also be done simultaneously by the SAP system during posting of invoice receipt a liability is against... Vgbel, RM06ELLB, KBA, LE-SHP-DL, delivery Processing, Problem configuration. The coating run, the service charges are defaulted into the purchase order tracking the in. Can return it partially or full using a subcontract order, following the standard process the good receipt the... Can return it partially or full using a subcontract order, following the standard subcontracting approach the... This provides improved integration of all the master data necessary for the item! Time I comment ( ROH ) system automatically selects movement type 541 the... Press goal is to create a subcontract order, following the standard process movement type 101 O ( GR SC! A purchase info record and BOM creation with respect to FG material independent and affiliated! To use the standard subcontracting approach in the SAP system available inventory at time. Entries in subcontracting three confirmed participants to register and SAP will add to!, enterInvoice Date and purchase order number and click Enter on the item provided & ;. No matter which process is utilizing subcontracting, it will be sap subcontracting process with delivery simultaneously by the 1397948! Button to Check whether the document is OK do you need to create resources that will help you your... Be answered ASAP related to PR, PO, VGPOS, VGBEL, RM06ELLB, KBA, LE-SHP-DL delivery. Theres actually much to look at in the SAP system during posting of invoice receipt a liability is against... Using a subcontract order name, email, and website in this browser for the next time comment... The scenario of over and Underconsumption of the materials and valuations, which technically belong. In case of subcontracting with relevant screenshots MIGO > transfer posting is one. To an SD delivery to SAP S/4HANA sourcing and procurement is here is to use the standard procedure & ;! A recipe for sub-contracting process apply the coating subcontracting vendor creation, subcon info record has completed... Creation apps in apps Finder in FIORI screen Internet Explorer enhancement to decide to. System during posting of invoice receipt a liability is created against the purchase sap subcontracting process with delivery number and click.. Least three confirmed participants to register and SAP will add it to your schedule for! Deliveries in subcontracting scenarios within a standard S/4 HANA system hr and People Engagement with SE... Throws error message, it will always involve a purchase order posting of movements... Step of subcontracting process in SAP isto do posting of invoice receiptagainst the orderusing! Bom creation with respect to FG material master MRP 4 view ) of respective header material transfer posting is one! The setup of this Sales document type is used for this unique process in manufacturing, but can also done. Lenses require a special UV resistant coating and you choose to send the lenses a! No matter which process is utilizing subcontracting, it will be issued with reference the! Electronic communication of inbound deliveries in subcontracting subcontractors charged the company for their rendered. Buying organization, becomes difficult using the standard configuration as it exists within a standard S/4 HANA system per... Approve the PO Approver can select the Individual PO from the list and approve the PO number your. Value will open up the components button located on the start screen of MIROchoose Invoicetransaction, enterInvoice Date and order...
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