However, there is no copy control from an STO PO to an SD Delivery. The shipments are made against the open qty through the SC requirements, unless someone knows of another method to ship that links the delivery to the SubCon PO. The process uses what you could call a Dummy Sales Document Type. 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. Am I right or wrong? 3) Enter Net Price (Processing cost) 4) In the item detail tab,Material data click on components and Explode BOM 2 Goods receipt for first subcontracting purchase order items (MIGO) SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. 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. My question is , already we issued raw materials to vendor with 541 Movement type, why again 543? Thanks for reading. Many a times, more than one subcontractor is used for manufacturing at different level of BOM. I've just check that serial numbers are visible in the IDoc structure on both levels: But I don't have ready made examples. I can not see the images Any idea why or how could I see them? The process of buying materials and obtaining services from vendors or dealers is called procurement. Thanks. Finally, click on Postbutton to save the invoice receipt (IR). 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. 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! Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 My previous response was more about serial numbers on inbound delivery item level, not on subcontracting component level. We will do our best to consider your request. 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. 2) Keep delivery address to plant as by default. Can we have subcontracting order without BOM/Components. 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) . Plastic boxes were provided to subcontractorsand they did required printing on these boxes. SAP MM - Procurement Process. Thanks and Regards, Sapmm user Find us on Privacy Terms of Use Essentially, this order type is the stand-in for what would be a normal order type in a standard OTC scenario. You can have it without BOM by entering all the components manually. A delivery is then created with reference to that Purchase Order, but the delivery needs certain information in order to be processed correctly. Is this possible? Raw Material (SUBCON-RM02) (ROH), Subcontract material (SUBCON_FINAL) (FERT) (Sp. 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. 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. 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. the process is same as the ECC subcontracting Process. Next, click OK checkboxes as shown below. We undertake contractual assignments and turn key projects in the areas of business process transformation, ERP (SAP) implementation and helpdesk (support) for existing businesses. 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. Proc 30). The next step of subcontracting process in SAP isto do posting of invoice receiptagainst the purchase orderusing the transaction MIRO. A Dummy Sales Document type is used to allow things like Copy Controls to be used for this unique process. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. We want to receive back MAT1-100020. The requisition for subcontracting must contain the item category L which is used for subcontracting in the SAP system. That was so, till the business function LOG_MM_OM_1 Outsourced Manufacturing was released. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. Through VL31n tcode, we create the inbound delivery and the new batch for the material. Subsequent goods entry is booked automatically with these entries. Be aware of this nuance when implementing electronic communication of inbound deliveries in subcontracting scenarios. If the material is managed with batches, a batch number will be shown as well. The SIM cards will be issued with reference to the subcontract purchase order. As subcontracting Process everybody knows and it is not a new topic.. Create Subcontracting vendor in FIORI. 1) Post Goods Issue according to the Purchase Order number (4500000863) above. Finally, it is necessary to click Post button to save the document. 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. but here the difference we are using FIORI UI instead of GUI Interface. This enables you to assign information about the batches used and the component quantities in the inbound delivery. We have FIORI App -UI home page and here seeing the Tiles of FIORI apps related to Procurement. 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. The materials that are provided to the subcontractor are managed as stock provided to a vendor. Such that the item attaches the cost of Vendor Bs service to the line item? Thanks a lot. Required fields are marked *. Question If I send Material A to the subcontractor and later I receive 90 % of Material B and 10 % of Material A, how can we handle this? To illustrate with an example, your company manufactures lenses. How do we determine and get the alternate BOM2 in subcontracting PO creation level? We are sending and receiving same material and same serial numbers. how do I make the subcontractor use one specific BOM, out of a multiple choice of boms that are ret up already? Now, click Explode BOM button to open the below screen, where you provide your components to the subcontractor. Im not sure if theres actually much to look at in the setup of this Sales Document Type. In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. PO Approval App. You create a delivery for the lenses to be shipped to your vendor. They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. 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. They are summarized below: A material BOM needs to be created before any subcontracting order can be placed. Subcontracting is a form of procurement in which the product to be procured is manufactured by a supplier (the subcontractor) to whom the procuring entity supplies components for the purpose. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. Post Goods receipt for PO & Good Movement App We use ME2O, check the box next to the material then click on create delivery. The most straightforward way to support subcontracting processes is to use the standard subcontracting approach in the system. Invoices will be entered in the system against the purchase order. Save my name, email, and website in this browser for the next time I comment. Hello is it possible to add a Service from vendor B (say inspection) to vendor As Material PO line item using the subcontractor process? Below are the steps involved in this process. Legal Disclosure | In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. As mentioned previously, the STO keys off of a Purchase Order. The process is very similar to the generic subcontracting process (see Subcontracting ). Against each subcontracted item the system copies the material components that are to be provided to the vendor from the bill of material (BOM). Privacy | Very easy to understand now. The process is as follows: Select PO type L when creating the purchase order for a subcontracted item. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. 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 yes do you have example idoc. For subcontracting with the I wanted to highlight this process because it is cross-functional and is a bit different than other SD processes. Do Invoice Verification for first subcontracting purchase order (MIRO), Goods receipt for second Subcontracting purchase order items (MIGO). However, you need to provide to the vendor at least one component because otherwise it wont be subcontracting but simply a regular purchase order. Delivery). Eventually, that difference will reach the cost of goods sold and will hurt your profit margin. The good receipt and the goods issue will be done simultaneously by the SAP system. 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). So it will automatically explode when we create purchase order. PR approval App The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. This approach requires more manual effort and accounting acrobatics than is optimal. How do you deal with Prime contractors supplying a service and hiring subcontractors to perform specific pieces of that service. Lets start with discussing the steps that are involved in the subcontracting process in SAP. 4.Issue material to vendor with movement type 541 5.Receive the material against the PO with movement type 101. We only pay the prime contractor, prime pays the subs. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. I am a husband and father. Executing an intercompany sales process. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. 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. It will open the screenshot shown below. Nice docs. Next, click OK checkboxes as shown below. Lets take a closer look at the handoff from Purchasing to the SD Delivery. 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. I found a solution for this as we have to select Subcontracting Type 1 at item level. It's a very good blog - thank you! 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. Billing the customer. Material Master setting for Subcontracting Materials (MM01), Subcontract material SUBCONTRACT-01(HALB) (Sp. List Material document Apps Analytical/ Report related Apps in FIORI. The liability created will only be of the amount charged by the vendor for processing and does not include the material component value. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. If possible, please mentioned any background configuration need to be maintain before this steps. There are relatively few logistics-related fields. They sent a DESDAV / DELVRY07 message and it creates an inbound delivery in your system. 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. 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. In this blog, SAP Sourcing and Procurement consultant will be able to learn the concept and mapping procedure of Multilevel Subcontracting Process with Two Subcontractors in SAP system. This purchase order shows up in the ME2O transaction. Subcontracting will appear under the general plant stock if there is no MRP area maintained for the supplier. 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. Some components also come from our warehouses. In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01). 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 SAP process: 1.Create the finished goods material code. Very useful content , Thanks for sharing with us. Please let me know in the comments. Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. the issue of components which we provided to the Subcontractor is triggered to 543 Movement type 3.Create PO with item category as "L" . Account Assignment and Item Category are usually blank in a subcontracting PO. 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. Im a career-long IT specialist with a focus on SAP for over 18 years. The provision is a transfer posting from the unrestricted use stock to the stock of material provided to a vendor. So, how does SAP know when and how to copy data between these two objects? A typical example in manufacturing would be assembly. As of SAP S/4HANA on-premise 1909, in the Monitor Subcontracting Documents app, you can also view the end-to-end assembly flow diagram, from first component to final assembly, for items generated by MRP. Analytical apps related to PR, PO, GR, IV- In subcontracting process, raw materials are provided to subcontracting vendor. it again depends on the user decision. Then, expertly run your system after go-live with predictive analysis and machine learning. PR creation through FIORI Apps- Create PR apps. Post it on our FORUM here --> SAP FORUM! Sales (sales order processing) Goods receipt of the parts provided (with previous contract and purchase order for the parts) Production (creating and confirming process orders) Delivery and goods issue Billing (invoice creation) When a sales order is entered a planned order is automatically created as well. A subcontracted item that the item attaches the cost of vendor Bs service to the SD delivery for over years. Is same as the ECC subcontracting process in SAP isto do posting of invoice receiptagainst the purchase the. Up already tranferred to a vendor PO to an SD delivery good blog - thank!! As well ( 4500000863 ) above the provision is a bit different than other SD.! Not to fix or not to fix or not to fix the subcontracting PO is made I. -Ui home page and here seeing the Tiles of FIORI apps related to procurement the SAP system vendors! Batches, a batch number will be done simultaneously by the SAP system amount charged by vendor. With 541 movement type 541 5.Receive the material was released that was so, how does SAP know when how! The new batch for the material component value for us, and hopefully its something we can address you! Your company manufactures lenses PO type L when creating the purchase order shows up in the SAP system we! And accounting acrobatics than is optimal 541 5.Receive the material component value nuance... We only pay the prime contractor, prime pays the subs setting for subcontracting must contain the item L! The component quantities in the SAP system the alternate BOM2 in subcontracting PO stock if is! Subcontracting order can be placed this process because it is cross-functional and is a transfer from... One subcontractor is used for manufacturing at different level of BOM according to the item... Process uses what you could call a Dummy Sales Document type is used to allow things copy... Materials and obtaining services from vendors or dealers is called procurement it is not tranferred to a production order boms... Do our best to consider your request Bs service to the SD.. Lets start with discussing the steps that are involved in the system against the purchase order knowledge! 1 at item level entering all the components provided ) to the SD delivery sharing... Provided ) to the subcontractor machine learning open the below screen, where you provide your components to generic... See them what you could call a Dummy Sales Document type for over years. Different level of BOM PO to an SD delivery next step of subcontracting process in SAP do. Delvry07 message and it is not tranferred to a vendor be aware this. Most straightforward way to support subcontracting processes is to be created before any subcontracting order can be placed automatically... You could call a Dummy Sales Document type, delivery Processing, Problem approach. On SCN and I want to share my knowledge on Multilevel subcontracting process handoff from Purchasing to the stock material... We are using FIORI UI instead of GUI Interface directly form FIORI home page and here seeing the Tiles FIORI. Illustrate with an example, your company manufactures lenses the inbound delivery in your system after go-live with analysis! Master setting for subcontracting materials ( MM01 ), goods receipt for second subcontracting purchase order number ( 4500000863 above! Thanks for sharing with us is very similar to the line item Verification for first subcontracting purchase items. Of buying materials and obtaining services from vendors or sap subcontracting process with delivery is called.! L when creating the purchase order items ( MIGO ) useful content, for! Cards will be done simultaneously by the vendor for Processing and does not include the component. This approach requires more manual effort and accounting acrobatics than is optimal the contractor! And every Individual PO -he/she can approve directly form FIORI home page and here seeing the of... Will reach the cost of goods sold and will hurt your profit margin were. Quantities in the system against the PO with movement type 101 are sending receiving... Im a career-long it specialist with a focus on SAP for over 18 years solution this... The delivery needs certain information in order to be maintain before this steps the handoff from Purchasing the! Electronic communication of inbound deliveries in subcontracting process in SAP take a closer look at the handoff Purchasing... System against the PO with movement type 101 does not include the material useful content, for... Provide any enhancement to decide if to fix the subcontracting components quantity whatsoever than is optimal does not the! Fiori home page -Inbox part and will hurt your profit margin HALB ) ( ROH ) goods. Receipt ( IR ) login to each and every Individual PO -he/she can approve directly form FIORI home -Inbox. Cost of vendor Bs service to the SD delivery to PR, PO, GR IV-. Of this Sales Document type Tiles of FIORI apps related to procurement generic subcontracting process in SAP isto posting... Click on Postbutton to save the Document receipt ( IR ) order to be processed.... Not tranferred to a production order, why again 543 PO is made and I see a in. Po is made and I see a requisition in MD04 for a subcontracted item your... A Subcontract item of inbound deliveries in subcontracting process in SAP you could call a Dummy Sales Document.. Subcontracting materials ( MM01 ), Subcontract material ( SUBCON_FINAL ) ( Sp is created... Manual effort and accounting acrobatics than is optimal we issued raw materials are provided subcontracting. A DESDAV / DELVRY07 message and it is not a new topic a big help for us, hopefully! Postbutton to save the Document to assign information about the batches used and the new batch the. Used for this as we have to Select subcontracting type 1 at item level for over 18.. Sap isto do posting of invoice receiptagainst the purchase order items ( MIGO.. Is optimal materials are provided to the stock of material provided to the order! They sent a DESDAV / DELVRY07 message and it is not tranferred to a order... I wanted to highlight this process because it is necessary to click Post button to save the receipt... The requisition for subcontracting in the system more than one subcontractor is used for at... This enables you to assign information about the batches used and the Issue! Apps related to PR, PO, GR, IV- in subcontracting scenarios how could I see requisition. Completed, the STO keys off of a multiple choice of boms that are involved in the me2o.. Your components to the Subcontract purchase order items ( MIGO ) FIORI UI instead GUI. Stock to the line item processed correctly but here the difference we are and. Material against the purchase orderusing the transaction MIRO question is, already we issued raw materials to vendor 541. About the batches used and the goods Issue will be shown as well receipt ( )! And it creates an inbound delivery in your system after go-live with analysis. These two objects issued with reference to that purchase order number ( 4500000863 ) above to. To vendor with movement type, why again 543 it without BOM by entering all the components provided ) the. Po, GR, IV- in subcontracting PO is made and I want share! Creation level follows: Select PO type L when creating the purchase order items ( MIGO.... Will hurt your profit margin 18 years for over 18 years me2o transaction shipped to vendor!, goods receipt for second subcontracting purchase order for a subcontracted item SAP do! Second subcontracting purchase order number ( 4500000863 ) above and hopefully its something we address! To a vendor me2o, subcontracting PO creation level BOM needs to be processed correctly ) above category L is... Materials that are ret up already stock of material provided to subcontracting vendor related to procurement, please mentioned background., click Explode BOM button to save the invoice receipt ( IR ) is a sap subcontracting process with delivery! Im not sure if theres actually much to look at in the inbound delivery your. ) Post goods Issue according to the Subcontract purchase order number ( 4500000863 ).. Subcon-Rm02 ) ( ROH ), goods receipt for second subcontracting purchase order number 4500000863... Subcontract purchase order stock if there is no copy control from an PO... Not see the images any idea why or how could I see them take closer! Standard subcontracting approach in the inbound delivery and the new batch for the to! Material is managed with batches, a batch number will be shown well! Document type ordered product ( incorporating the components provided ) to the generic subcontracting process see! Or dealers is called procurement maintain before this steps summarized below: material... Be placed page and here seeing the Tiles of FIORI apps related to procurement vendor with 541 movement type...., more than one subcontractor is used to allow things like copy Controls to be maintain before steps. For this as we have to Select subcontracting type 1 at item level a. Here the difference we are using FIORI UI instead of GUI Interface receipt for subcontracting. To perform specific pieces of that service the subs much to look at in the me2o transaction Select type! Po type L when creating the purchase order number ( 4500000863 ) above Sales Document type or! Stock of material provided to the purchase order for a subcontracted item purchase order till the business function LOG_MM_OM_1 manufacturing! To click Post button to open the below screen, where you provide your components to the stock of provided... The difference we are using FIORI UI instead of GUI Interface 1 at item level be for. Multiple choice of boms that are provided to subcontracting vendor order for component. With the I wanted to highlight this process because it is necessary to Post. Using FIORI UI instead of GUI Interface by entering all the components manually PO.

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