5.Receive the material against the PO with movement type 101. It appears that you are limited to only one default Delivery Type per Plant. Procurement Info record created in FIORI using Create Procurement Info record FIORI Apps. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). Activating PR & PO Approval Notification. The next step in the subcontracting process is the transfer of the repairable part together with additional components to the vendor. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. I showed how the STO process has a default delivery type per plant, how that delivery type contains a default (dummy) sales document type, and how those two objects are connected through the standard Order/Delivery Copy Control. Using MIGO > Transfer Posting is just one way to ship materials to a subcontractor. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. Now, lets display thedocument that we have just created. 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. 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!!! 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. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. 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. 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. Try to test the IDocs with WE19 transaction. If the missing 3 pallets are stolen or lost during transportation that might be ok. In SAP HR after hiring Hi, There's no e-books or any course materials about the QM module. Posting the goods receipt for a third-party purchase order. Info button. ME2O after purchasing and before inbound delivery creation. They charged the company for their services rendered. As subcontracting Process everybody knows and it is not a new topic.. Have any questions or comments? Subsequently, the IDoc inbound scenario DESADV / DELVRY07 was enhanced to support subcontracting components in inbound deliveries communicated electronically the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1, The problem with the above solution is that subcontracting components quantities transferred with DESADV / DELVRY07 message get fixed in the inbound delivery. 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. it is more useful apps. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. These two options are now combined into one driven by MRP areas, but it doesnt require material data on all components and can support full-lot sizing and sourcing functionality. 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. Once again thanks a lot for all your efforts. This purchase order shows up in the ME2O transaction. Thanks for visiting. We are currently setting up the subcontracting process in our SAP system. Not using Migo or MB1B and 542 movement type. he can add text note required if any notification sent to his next level approver. I found a solution for this as we have to select Subcontracting Type 1 at item level. The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. This differs from classic SAP ERP for subcontracting, in which you could plan either with or without MRP areas. Get an overview of our wide selection of books on every relevant SAP topic. Complexities include PO POA ASN file uploads, customer and supplier security role customizations, batch, serial number and quality managed orders, subcontracting, consignment and invoice tax handling. In SAP, subcontracting is a sub-process within the MM Purchasing module and it almost always involves the delivery of goods from inventory to the vendor. I can not see the images Any idea why or how could I see them? You can return it partially or full using a Purchase Order or not. Therefore, it was not possible to provide components batches but with background batch determination or to adjust consumption quantities. Please note the movement types used: 101 for Goods Receipt and 543 for Issue of Components. Do you need to create a recipe for sub-contracting process? Subcontracting is a process which a products are to be manufactured by a supplier (the subcontractor) to whom your company supplies the components for. Required fields are marked *. 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. In SAP, subcontracting is a sub-process within the MM Purchasing module and it almost always involves the delivery of goods from inventory to the vendor. However, there is no copy control from an STO PO to an SD Delivery. Again, that is not necessarily bad, depending on your accounting policies and the specific case. The invoice is posted. Ive been blogging about SAP and various other interests since 2013. System will allow to receive same serial number after subcontracting. it again depends on the user decision. Can you explain how to do this process without BOM?? user will convert to PO. A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. The setup should already be done for you; these are all standard configuration settings which are typically pre-delivered. SAP Stock Transfer Order and Stock Transfer Process. Now, during unloading you realize that 3 pallets are missing. Click to share on LinkedIn (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Pocket (Opens in new window), SAP Humor: the adventures of the new spaceship BERID, SAP Settlement Management: The Multiple Contract Condition Problem. Subcontracting with multiple production versions is supported. Finally, click on Postbutton to save the invoice receipt (IR). Please let me know in the comments. Delivery). These components are usually associated with a BOM. Creating a third-party purchase order. In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. In addition to it I have provided Analytical apps related to Procurement. I am a husband and father. 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. Save my name, email, and website in this browser for the next time I comment. However, with SAP S/4HANA, a subcontracting MRP area is the default option for subcontracting planning. When delivery papers are needed, a delivery should be created. This approach requires more manual effort and accounting acrobatics than is optimal. (ls_comp-fmeng = abap_true). The vendor performs its service and delivers the ordered material (the end product). As the worlds leading SAP publisher, SAP PRESS goal is to create resources that will help you accelerate your SAP journey. Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. As a result, the material document will consists of the following items: The goods receipt will be valuated at the subcontract price plus the value of the SIM cards consumed. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. Hello. Alerting is not available for unauthorized users, Right click and copy the link to share this comment, 645119 Problems for subcontracting using delivery, 338119 Goods receipt in inbound delivery for SC order, 654613 Batches and goods receipt for inbound delivery for provision of materials for subcontract order, 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1, 1397948 - Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. What is the process to create a RMA for a subcontract purchase order? Another example of the subcontracting process in SAP is whena company provided raw sims and packaging materials to a subcontractor. Do you have a question and want it to be answered ASAP? SAP Training Shop is not currently supported on Internet Explorer. Thanks. 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. Im going to highlight the standard configuration as it exists within a standard S/4 HANA system. After we post goods receipt through VL32n, inventory is shown into the ME2O tcode, and available quantity is back to 176 packs. Alerting is not available for unauthorized users, Right click and copy the link to share this comment. That is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. Material Master setting for Subcontracting Materials (MM01), Subcontract material SUBCONTRACT-01(HALB) (Sp. You cannot change the transfer To upgrade MRP subcontracting processes in SAP ERP to SAP S/4HANA, you need to take stock of your existing subcontracting suppliers and processes and identify any gaps, execute a standard upgrade to SAP S/4HANA, and then at post-processing proceed as follows: The standard subcontracting process in SAP entails a leap of faith to a degree, which some MRP controllers and their ilk are unwilling to make. We undertake contractual assignments and turn key projects in the areas of business process transformation, ERP (SAP) implementation and helpdesk (support) for existing businesses. Im a career-long IT specialist with a focus on SAP for over 18 years. 2. demand for the finished item in the subcontractor location, nor can you change the component demand in the subcontractor location. Have you had to do much with your default SAP STO Delivery Setup configuration? Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. I hope this will be more thrill and give happiness when working in FIORI. 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. The process uses what you could call a Dummy Sales Document Type. Finally, click on Post button to post the document. We purchase 100 packs from an external vendor to be shipped directly to the subcontractor. Then, expertly run your system after go-live with predictive analysis and machine learning. This is where you maintain all the components which need to be sent to the vendor. User can login the the Individual PO and can monitor the PO details and approve it. 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. System automatically selects movement type 101 O (GR to SC Vendor). Also it might be quite hard to spot at the first glance. Thanks for your reply. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. Am I right or wrong? Here we can see the PO is approved- this is Classical App and looks like our ECC PO screen. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Total available inventory at the subcontractor is 176 packs, which is correct. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. This can be doneeither manually or through the use ofa BOM. A typical example in manufacturing would be assembly. in the case of not providing components but still wanting to value the finished goods at std including inbound freight? 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. if yes do you have example idoc. Creating a sales order for intercompany sales. If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. 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. Really its very useful for content. Finally, you save the subcontracting purchase order. This creates a host of additional transactions for each subcontracting order and doesnt scale well. Create/ Change/Display Supplier App if they are ok with the PO then they can approve it else deny the PO. Subcontracting Scenario Welcome to scenario : Create Material In FIORI. How do you deal with Prime contractors supplying a service and hiring subcontractors to perform specific pieces of that service. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. The fixed quantity indicator is always set automatically for all components, so that no correlation occurs for the component quantities when changes are made to the inbound delivery quantity. We are sending and receiving same material and same serial numbers. 3.Create PO with item category as "L" . Next, click OK checkboxes as shown below. Online Help Keyboard Shortcuts Feed Builder What's new So, this scenario will be considered as Multilevel Subcontracting process. This is done when SC Vendor-02 sent finished product to our warehouse. Thx. 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. Now receiving the FG Material from Sub contracting vendor to our location. | The PPM consists of components and operations. Subcontracting is one of the procurement processes available in MM. Do Invoice Verification for second subcontracting purchase order (MIRO). However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03. SAP PRESS is the world's leading SAP publisher, with books on ABAP, SAP S/4HANA, SAP CX, intelligent technologies, SAP Business Technology Platform, and more! The subcontractor converted the raw sims into finished sims well packed and returned finished product back to the company. The subcontractors charged the company for their services rendered per box. The requisition for subcontracting must contain the item category L which is used for subcontracting in the SAP system. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. Billing the customer. 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Entry in the subcontractor you can return it partially or full using a purchase order to the. Must contain the item category L which is used for subcontracting in the delivers... Details and approve it can then manually create deliveries to the subcontracting process in SAP is whena company raw... A big help for us, and hopefully its something we can see the PO with movement type 5.receive... Is sufficient to trigger stock transfers and reservations from the plant to the company lets thedocument... The company post, we took a look at subcontracting functionality in is... Procurement processes available in MM he can add text note required if any notification sent his. And machine learning selecting the materials you wish to send and clicking the create Delivery button and the. Recipe for sub-contracting process serial number after subcontracting product ) material and same serial number subcontracting... Fg material from Sub contracting vendor to be procured in a subcontract order... 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