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. with regards to the following during MIGO To create a subcontracting purchase order, start the transaction ME21N or navigate to thefollowingpath in SAP menu:Logistics Materials Management Purchasing Purchase Order Create (ME21N). Hello. Create a subcontracting Purchase Order (ME21N) Click on "Material Data" tab under "Item details" and then click on "Components" to view the components / make changes. Through VL31n tcode, we create the inbound delivery and the new batch for the material. Identifying the process steps of an intercompany sales process. This enables you to assign information about the batches used and the component quantities in the inbound delivery. If you are newly implementing subcontracting with PP/DS or SNP heuristics in SAP SCM 410, we recommend using the production data structure instead of the production process model. The bill of materials (BOM) is a formally structured list of the components that make up a product. Invoices will be entered in the system against the purchase order. Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. How to edit personnel no. I believe the serial number records track whether the item is in warehouse or somewhere else. Thank you, helped a lot. You cannot change the transfer Finally, click on Post button to post the document. The SIM cards will be issued with reference to the subcontract purchase order. Executing an intercompany sales process. Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? Vendor shall process the item / use the item provided & supply the final item. Try to test the IDocs with WE19 transaction. For subcontracting with the How I need to set up the process and BOM? Next,provide Amount in the box to balance the amount of service provided. Goods issue items for the SIM cards (components). then Subcontracting PR and PO with Approval (Release) and then issuing Raw material to Subcontracting vendor using Transfer posting (movement type 541) and once Subcon vendor manufactures FG material -he will issue back to us and intern we are receiving the FG Material using Goods reciept against PO created for FG Material. 6.MIRO to account for vendor's invoice for the service charge& material used by him. Theme: Baskerville 2 by Anders Noren. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. This blog is independent and NOT affiliated with SAP SE (the company behind SAP ERP system). The rates quoted by the vendor for labour charges are mentioned in the purchase order line items. 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. How do you deal with Prime contractors supplying a service and hiring subcontractors to perform specific pieces of that service. no PIR as a subcontracting is not mandatory, Can you help with sub contracting Scrap process. Thanks for the question, Kumar. Create/Change/Display Bill of material (BOM) App As the components quantities are fixed by SAP standard DESADV processing logic, the goods receipt of 27 pallets consumes the components of the entire 30 pallets!!! Save my name, email, and website in this browser for the next time I comment. So it will automatically explode when we create purchase order. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. Posting Transfer Posting stock from own stock to Sub contractor . In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. Now, press to display the components provided to the subcontractor for the finished material as shown on the screenshots below. Here i have mentioned Subcontracting vendor creation, subcon info record and BOM creation with respect to FG material. Is the Info record mandatory in subcontracting ? The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. Thanks for visiting. Proudly powered by WordPress The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. You create a delivery for the lenses to be shipped to your vendor. You can use this business function to enter subcontracting components in the inbound delivery, or you can fill the subcontracting components using a shipping notification from the supplier. Finally, you will see the accounting document created for goodsreceipt and goodsissue. 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. These components are usually associated with a BOM. Theres actually quite a bit that goes into the Subcontracting with delivery process. The components are posted to the stock of materials provided to the vendor. As the worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you accelerate your SAP journey. Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. Learn how to integrate SAP S/4HANA with SAP Ariba, SAP Fieldglass, and more. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. The system proposes the labor charge from the info record for the subcontracting product. What is the process to create a RMA for a subcontract purchase order? using GR for Purchase order with Movement type 101. Not using Migo or MB1B and 542 movement type. For a premium experience please use an alternative browser. Thats about it. I found a solution for this as we have to select Subcontracting Type 1 at item level. 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. A planned order in the subcontractor location produces the material in that location and a stock transfer requisition transfers the material from the subcontractor location to the demand location. I've been blogging about SAP and various other interests since 2013. its plants), or indirectly (using another of its suppliers). A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. 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. Subcontracting materials are sent to vendors for processing finished products. 4.Issue material to vendor with movement type 541. It would have been nice if SAP had provided a BAdI enhancement here. It's a very good blog - thank you! Alerting is not available for unauthorized users, Right click and copy the link to share this comment, Approve purchase order (optional) Approval Process not, Transfer stock for subcontractor with delivery, Transfer stock for subcontractor without delivery, Goods receipt for subcontract order (without WM). Depending on the case it may be correct or not. The subcontractors charged the company for their services rendered per box. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. This often is used as justification by finance and other stakeholders on the buyer side for setting up phantom plants to represent the supplier and then moving and tracking the materials in these plants. What is S/4HANA? 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. The components that the vendor needs to manufacture the end product are specified in the subcontract order. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. SAP Ariba Supply Chain Collaboration for Buyers provides an extra layer of visibility that has been sought in the subcontracting process, including component receipt and consumption notices from the supplier, as well as full business-to-business-level manufacturing visibility into the suppliers progress. It appears that you are limited to only one default Delivery Type per Plant. SAP Stock Transfer Order and Stock Transfer Process. This provides improved integration of all the master data necessary for the process. For the MRP to pick up the subcontracting order correctly, you must maintain a subcontracting entry for the associated material in its MRP area assignment, an MRP-relevant source of supply/quota agreement with the subcontracting setting (again, source lists are not supported in SAP S/4HANA before version 1709 for MRP, so you would need to use a quota agreement as a workaround in these versions), and a BOM containing the components. Have you had to do much with your default SAP STO Delivery Setup configuration? I'm a career-long IT specialist with a focus on SAP for over 18 years. Our 3 to RUN initiative empowers you to schedule our chosen classroom training course or virtual SAP Live Class on a date that suits you. Read on for more about the SAP Subcontracting PO Delivery Setup. Keep up-to-date with SAP information and training. It is likely to slip through tests and bite you only down the road. Now receiving the FG Material from Sub contracting vendor to our location. 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. The system will open a window with the list of documents in accounting. Thx. Copyright | Now, lets display thedocument that we have just created. There are configuration elements only available on a Sales Document which drive these delivery creation. Thanks for visiting. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. List Material document Apps This improves batch tracking for the sold-to party. 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. To illustrate with an example, your company manufactures lenses. Posting an incoming supplier invoice. System automatically selects movement type 101 O (GR to SC Vendor). There are 4 key areas: The STO configuration starts with the assignment of a Delivery Type to the Delivering Plant for use in the STO process. Then, expertly run your system after go-live with predictive analysis and machine learning. Unfortunately they did not. Use transaction MIGO to provide components to the subcontractor. The stock of the components provided to vendor is reduced as if the entire 30 pallets are shipped. If the material is managed with batches, a batch number will be shown as well. Delivers the ordered product ( incorporating the components are posted to the vendor needs to manufacture the product! If SAP had provided a BAdI enhancement here becomes difficult using the standard process system the... When implementing electronic communication of inbound deliveries in subcontracting scenarios GR for purchase order with a on. 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