View all posts by Michael. SAP MM Procure To Pay Architect (must be good in PP too) Starts 3/13 (or 3/15); duration: 3 + months Location: remote and onsite in Denver, CO - MST hours (local or west coast candidates preferred) And, of course, your Master Data must be setup: Assignment of the STO Delivery Type (LB) to the Delivering Plant, Assignment of the Default (Dummy) Sales Order Type (DL) to the STO Delivery Type, Configuration of the Default Order Type Setup (DL), Assignment of Copy Control Settings between the Sales Order (DL) and the Delivery (LB). Create Supplier Invoice Apps or Incoming Invoice Apps. Goods receipt items for the packaged SIM cards (end product) supplied by the vendor. If you elected to plan without MRP areas, you werent able to use the full functionality around lot sizing and were only able to order full lot sizes. The Latest ERP from SAP. Raw Material (SUBCON-RM01) (ROH) 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. But SAP does not give here any flexibility. To do it, click on Doc. 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. 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. The components that the vendor needs to manufacture the end product are specified in the subcontract order. Once again thanks a lot for all your efforts. We want to receive back MAT1-100020. Participants will also learn about the associated customizing settings for the selected cross- application business processes. Total available inventory at the subcontractor is 176 packs, which is correct. Thanks for reading. Mapping procedure of a given scenario in SAP system. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. System automatically selects movement type 101 O (GR to SC Vendor). Finally Posting Invoice verification (Supplier Invoice). Also in previous versions of SAP ERP, you could check subcontracting stocks by supplier by running reports from a specific IMG menu path. 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 the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. 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). The good receipt and the goods issue will be done simultaneously by the SAP system. So, this scenario will be considered as Multilevel Subcontracting process. using GR for Purchase order with Movement type 101. Create Subcontracting vendor in FIORI. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. Any one help me to this query ASAP? The labor charge is JPY 2,000 per piece. Right side of the home page we have PO list waiting for Approval- we have the option of approve/deny based on the PO approval persons/authority decision. Subcontracting refers to the process of entering a contractual agreement with an outside person or company to perform a certain amount of work. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Analytical/ Report related Apps in FIORI. Very easy to understand now. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. Subcontracting in SAP APO is modeled with the help of two orders. he can add text note required if any notification sent to his next level approver. As subcontracting Process everybody knows and it is not a new topic.. Can we send Serialized component details as well in DESADV? The PPM consists of components and operations. BOM Explosion to determine the Raw material components provided to Subcontracting vendor. Without knowing the error message, it is tough to diagnose the issue. 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. The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. They charged the company for their services rendered. Just wanted to make sure, do we need to maintain the Bill to party and Ship to party for this? Executing an intercompany sales process. So it will automatically explode when we create purchase order. if yes do you have example idoc. (ls_comp-fmeng = abap_true). The ME2O tcode no longer shows the expected receipt to the subcontractor ! Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Available quantity at the subcontractor is back to 76 packs, where the real information is 176 packs. That is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. The stock of the components provided to vendor is reduced as if the entire 30 pallets are shipped. 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. A good explanation of Subcontracting process for 2 level. To create a subcontracting purchase order, start the transaction ME21N or navigate to the following path in SAP menu: Logistics Materials Management Purchasing Purchase Order Create (ME21N) . The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. How do we determine and get the alternate BOM2 in subcontracting PO creation level? Process Flow. We only pay the prime contractor, prime pays the subs. 3.Create PO with item category as "L" . 2.Maintain the BOM for the material. This provides improved integration of all the master data necessary for the process. but here the difference we are using FIORI UI instead of GUI Interface. First, well start with. 1) In the SPRO> MM>Purchasing>set up Subcontractor order>assigning plants to the delivery documet LB 2) I have created a Customer master record in the same sales area as Material and then assigned it to the Vendor Control data (Vice versa also setting done:cCustomer master record control data vendor assigned) Thanks for visiting. the process is same as the ECC subcontracting Process. Theme: Baskerville 2 by Anders Noren. Subcontracting Purchase Order to SC Vendor-02, 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N). They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. (It is already delivered). Thanks for your reply. Use the IMG path below for this piece of the config: The only field worth mentioning is that Default Order Type field; the rest of this is standard delivery setup. The materials that are provided to the subcontractor are managed as stock provided to a vendor. No matter which process is utilizing subcontracting, it will always involve a Purchase Order. Inbound processing is therefore more efficient since manual batch entry tasks are removed. 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. The vendor will be billed only for items delivered. Analytical apps related to PR, PO, GR, IV- Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. Creating a third-party purchase order. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. 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. Sound off in the comments. 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. You can then manually create deliveries to the vendor by selecting the materials you wish to send and clicking the Create Delivery button. You probably know where this configuration is, but for the noobs: These are all default settings, so again not much to say here. 2. It is likely to slip through tests and bite you only down the road. However, the integration with an SAP ERP system requires at least SAP ERP 2005 with Enhancement Pack 03. Copyright | It can also be done through via MIGO transaction. Have you had to do much with your default SAP STO Delivery Setup configuration? if they are ok with the PO then they can approve it else deny the PO. The transaction shows the requirements for materials from the specified vendor and displays a color coded status in green if the vendor has sufficient quantities of the components, in red if the vendor does not. Posting Transfer Posting stock from own stock to Sub contractor . We would love to hear your feedback in the comments section below. The system will generate a purchase order number internally. . When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Many small and midsize businesses hire subcontractors to assist with a wide variety of functions. ERProof SAP MM SAP MM Training Subcontracting Process in SAP. The liability created will only be of the amount charged by the vendor for processing and does not include the material component value. Hi, Please elaborate little confuse about details. 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. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. Standard Process Flow ME21N - Purchase order creation MIGO_TR - Send components to a subcontractor Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. 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. Info button. It goes without saying that youll need some basic things setup before tackling the rest of this process: This is the part that I found interesting. 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. Read on for more about the SAP Subcontracting PO Delivery Setup. Procurement Overview page Apps. This can be doneeither manually or through the use ofa BOM. Please explain detail steps and Tcode. In MIGO, use Transfer Posting document type against Other, and movement type 541 as highlighted on the screenshot below. Thanks and Regards, Sapmm user Find us on Privacy Terms of Use Sir, System will allow to receive same serial number after subcontracting. Subsequent goods entry is booked automatically with these entries. Save my name, email, and website in this browser for the next time I comment. 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. Really its very useful for content. 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. Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. Please contact in case of any queries and clarifications. Your email address will not be published. The subcontractors charged the company for their services rendered per box. Certain lenses require a special UV resistant coating and you choose to send the lenses to a 3rd party to apply the coating. For a premium experience please use an alternative browser. 3.Create PO with item category as "L" . The system will open a window with the list of documents in accounting. This is done when SC Vendor-02 sent finished product to our warehouse. I'm a career-long IT specialist with a focus on SAP for over 18 years. We purchase 100 packs from an external vendor to be shipped directly to the subcontractor. Creating Bill of Material for Subcontracting in FIORI. 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? 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. 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. If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. 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. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. Using PO creation App in FIORI we are creating PO with reference to PR. PR approval App How to Repackage a Transport Request (TR) in SAP? Get the alternate BOM2 in subcontracting PO, VGPOS, VGBEL, RM06ELLB, KBA, LE-SHP-DL, Delivery,. We are creating PO with item category as & quot ; L quot! Tests and bite you only down the road manual Batch entry tasks are removed tasks are removed selecting the you! 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