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. The good receipt and the goods issuewill be done simultaneously by the SAP system. We use the ME2O transaction to manage inventory at the subcontractor, and we use inbound deliveries on all our purchasing processes (inbound deliveries are used through VL06i to provide the subcontractor a report with incoming receptions, and to create batches). using Transfer posting Option and movement type 541. Very easy to understand now. This improves batch tracking for the sold-to party. But SAP does not give here any flexibility. This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. Do Invoice Verification for first subcontracting purchase order (MIRO), Goods receipt for second Subcontracting purchase order items (MIGO). (ls_comp-fmeng = abap_true). using GR for Purchase order with Movement type 101. See the future of sourcing and procurement! Partial delivery to subcontractor is possible. Create Subcontracting vendor in FIORI. You cannot change the transfer Through Screen shots process is self explanatory. 1) Post Goods Issue according to the Purchase Order number (4500000863) above. 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.. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. Raw Material (SUBCON-RM01) (ROH) Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). 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. Is the Info record mandatory in subcontracting ? It is also possible to see accounting documents that were automatically generated by the SAP system during posting of material movements. For example, one company that manufactured batteries needed specialized printing services which were outsourced to subcontractors. To illustrate with an example, your company manufactures lenses. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. Our issue is that when creating an inbound delivery on the purchase order to be delivered to the subcontractor, quantity to be delivered "disappears" from the ME2O report. Please elaborate little confuse about details. As subcontracting Process everybody knows and it is not a new topic.. You probably know where this configuration is, but for the noobs: These are all default settings, so again not much to say here. Please contact in case of any queries and clarifications. 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. 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 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. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. The labor charge is JPY 2,000 per piece. Make sure to implement the note 1397948 - Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1 if you work with subcontracting components in DESADV IDocs. 3.Create PO with item category as "L" . To do it, click on Doc. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. Tracking the materials and valuations, which technically still belong to the buying organization, becomes difficult using the standard process. Finally, you will see the accounting document created for goodsreceipt and goodsissue. 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. Display Material document App I've just check that serial numbers are visible in the IDoc structure on both levels: But I don't have ready made examples. Legal Disclosure | 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. Thanks a lot. Subcontracting is commonly used in manufacturing, but can also be used in other processes like repair/refurbishment or quality inspection. it again depends on the user decision. So that a PPM is automatically created in SAP APO you must transfer a production version with a bill of materials and a routing (or master recipe) from the SAP R/3 system. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). Post Goods Receipt (MIGO) on receipt of the finished product E from the Subcontractor Can you let me know what are the default settings for the Availability check for Subcontracting POs? Again, that is not necessarily bad, depending on your accounting policies and the specific case. Thanks for visiting. I've been blogging about SAP and various other interests since 2013. Please keep posting the knowledge. That is confirmed by the note 1397948 Subcontracting: Components cannot be provided using IDoc /SPE/IDOC_INPUT_DESADV1. Delivery Basics like logistics defaults, pricing for freight, and partner determination have to come from somewhere. Im going to highlight the standard configuration as it exists within a standard S/4 HANA system. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. The materials that are provided to the subcontractor are managed as stock provided to a vendor. Subcontracting components in an inbound delivery via DESADV IDoc Context Subcontracting purchasing with inbound deliveries used to be a paint due to problems with components provided to vendor processing - see the notes: 645119 - Problems for subcontracting using delivery Read More LE (Logistics Execution)MM PurchasingSAP ERPSAP S/4HANA 9 Hit enter to search. Creating a sales order for intercompany sales. Billing the customer. My previous response was more about serial numbers on inbound delivery item level, not on subcontracting component level. if yes do you have example idoc. (Movement TYpe 101). When we hire Abhijeet - Thanks for sharing this blog. 3.Create PO with item category as "L" . 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. Subcontracting is a critical process for many organizations, and from an SD consultants perspective its quite unique. Once again thanks a lot for all your efforts. This is done when SC Vendor-02 sent finished product to our warehouse. 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. Next, click OK checkboxes as shown below. Create/ Change/Display Supplier App Does this sound familiar? 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. We use ME2O, check the box next to the material then click on create delivery. PO Approval App. 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. Maintain subcontracting MRP areas for all subcontracting suppliers requiring provision stocks to be planned separately from requirements. Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. View all posts by Michael. If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. The rates quoted by the vendor for labour charges are mentioned in the purchase order line items. the issue of components which we provided to the Subcontractor is triggered to 543 Movement type Ive been blogging about SAP and various other interests since 2013. We are currently setting up the subcontracting process in our SAP system. Then, expertly run your system after go-live with predictive analysis and machine learning. System automatically selects movement type 101 O (GR to SC Vendor). SAP Steps: 1.Create the finished goods material code. Now, lets display thedocument that we have just created. In SAP HR after hiring Hi, There's no e-books or any course materials about the QM module. Do you need to create a recipe for sub-contracting process? This can be doneeither manually or through the use ofa BOM. The process of buying materials and obtaining services from vendors or dealers is called procurement. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. How I need to set up the process and BOM? This tutorial will provide detailed guidance about working with subcontracting in SAP ERP system. Try to test the IDocs with WE19 transaction. 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