We would love to hear your feedback in the comments section below. Can any one explain me the step by step procedures of Subcontracting Out Bound Delivery, I have created the purchase order with the finished and the components, the components has to be to be moved to the subcontractor with outbound delvivery, following are the settings i have maintained, 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), 3) i am using only ME2O(NOT ZERO) Transaction for the Outbound delviery, 4)when i am pressing the create delivery in the ME2o report, Essential transfer parameters are missing in record: 000001:Message no. Therefore no need to transfer the material through ME2O. Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Sir, There are relatively few logistics-related fields. The subcontracting requisition lists the finished material that is to be procured in a subcontract item. This enables you to assign information about the batches used and the component quantities in the inbound delivery. 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). First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor. Steps to perform subcontracting: Create subcontracting Info record (Optional) - T Code - ME11 If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. 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. Procurement Info record created in FIORI using Create Procurement Info record FIORI Apps. Explore ABAP, FICO, SAP HANA, and more! 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? The system will generate a purchase order number internally. System will allow to receive same serial number after subcontracting. Info button. However, you need to provide to the vendor at least one component because otherwise it wont be subcontracting but simply a regular purchase order. 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!!! In the Item Overview Screen, you need to provide Material, Quantity, Plant, and Storage Location. Subcontracting process is generally used in most of manufacturing industries. When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Also in previous versions of SAP ERP, you could check subcontracting stocks by supplier by running reports from a specific IMG menu path. 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. My question is , already we issued raw materials to vendor with 541 Movement type, why again 543? 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. 3.Create PO with item category as "L" . In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. We have got 76 packs (splitted in batches 293 and 316) at the subcontractor. Its being processed by subcontracting vendor, convert it to semi-finish material and deliver back. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. In general terms, subcontracting is the outsourcing ofsomeprocess to an external vendor. The subcontractors charged the company for their services rendered per box. How I need to set up the process and BOM? 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. Post Goods receipt for PO & Good Movement App You create a subcontract order, following the standard procedure. Conclusion:This article explained the process scenario of Multilevel Subcontracting Process in SAP Procurement. Generally, SAP SD processes rely upon copy controls to define how documents and data are copied from the source (i.e. Raw Material (SUBCON-RM01) (ROH) user can view the list of the transactions he/she used recently in left side of the home page.using Edit option they can customize i mean arrange the FIORI apps tiles based on their requirement. Visit SAP Support Portal's SAP Notes and KBA Search. Thanks. 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). A good explanation of Subcontracting process for 2 level. This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. Your comprehensive guide to SAP S/4HANA sourcing and procurement is here! This can be doneeither manually or through the use ofa BOM. As mentioned previously, the STO keys off of a Purchase Order. Very easy to understand now. This is done when SC Vendor-02 sent finished product to our warehouse. I hope this will be more thrill and give happiness when working in FIORI. 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. 4.Issue material to vendor with movement type 541. I've been blogging about SAP and various other interests since 2013. 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 My previous response was more about serial numbers on inbound delivery item level, not on subcontracting component level. I have a question. 3.Create PO with item category as "L" . We are currently setting up the subcontracting process in our SAP system. 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. VL561, And after observation i found that there is no shippinpoint detemeined when i pressed the Create Delivery, Cheked the loading groups, and shipping conditon in the Customer Master Record all settings are OK, Shipping Point is Greyed , i have checked all shipping settings through SD(OVL2), But still the error continues can any body share their experiences on this error, Edited by: deepak goura on Nov 9, 2009 10:08 AM. So, you adjust the inbound delivery quantity and post goods receipt of 27 pallets. This is my first blog on SCN and I want to share my knowledge on Multilevel Subcontracting Process. (ls_comp-fmeng = abap_true). 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. The list contains the object number of each component, together with the quantity and unit of measure. The system proposes the labor charge from the info record for the subcontracting product. Subcontracting refers to the process of entering a contractual agreement with an outside person or company to perform a certain amount of work. Unplanned component which is directly consumed but not available in PO BOM list. The first line corresponds to the goods receipt of the final product, whereas the second two lines correspond to the issue of components which you provided to the subcontractor earlier. 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. A subcontractor provides a product on pallets and they notify a shipment of a full truck load, of say 30 pallets. It would have been nice if SAP had provided a BAdI enhancement here. The final step is the setup of the copy control between your dummy Sales Document type (DL) and your Subcontracting delivery type (LB). This differs from classic SAP ERP for subcontracting, in which you could plan either with or without MRP areas. If the material is managed with batches, a batch number will be shown as well. Please let me know in the comments. Below are the steps involved in this 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. Also, you need to provide Material, Quantity, Delivery Date, Plant, and Price. Is there a process to bring components back from the Subcontractor . Online Help Keyboard Shortcuts Feed Builder What's new Double click on Accounting Document. During the MRP run, the system explodes the BOM requirements and classifies dependent subcontracting elements as such. if yes do you have example idoc. Thats about it. This purchase order shows up in the ME2O transaction. Upon issuing a subcontracting PO and shipping out the components to the supplier, the buyer doesnt technically receive updates on the production of the order until the final product or subassembly with the components is shipped back from the supplier to the buyer. Click on Simulate button which will notify you of any errors. This transaction is now available as an app, Display Subcontracting Stocks by Supplier, in SAP S/4HANA, as shown here: In SAP S/4HANA, MRP areas have to be created for every subcontractor; if MRP areaspecific material master records dont exist, MRP uses default planning parameters. These components are usually associated with a BOM. 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. Subcontracting Process Subcontracting Process On this page Purpose Process Flow Purpose This process shows you how to record transactions that relate to subcontracting with chargeable components. 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). I'm looking forward for the next ones , Thanks for sharing. In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. Have you had to do much with your default SAP STO Delivery Setup configuration? it again depends on the user decision. Read on for more about the SAP Subcontracting PO Delivery Setup. Partial delivery to subcontractor is possible. 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? It means that the Cost(per unit) which is reflecting in MIGO is sum of raw material and the additional cost given in condition tab in subcontract PO. Posting an incoming supplier invoice. The materials that are provided to the subcontractor are managed as stock provided to a vendor. Subcontracting is a critical process for many organizations, and from an SD consultants perspective its quite unique. External subcontracting in procurement Create purchase order Approve purchase order (optional) - Approval Process not Transfer stock for subcontractor with delivery Process deliveries and picking Transfer stock for subcontractor without delivery Goods receipt for subcontract order (without WM) Record results Record usage decision Verify invoice They do not provide any enhancement to decide if to fix or not to fix the subcontracting components quantity whatsoever. Proc 30) When the subcontractor receives the raw SIM cards at his premises, he will inform the client and a goods receipt will be posted with reference to the purchase order increasing the subcontractor stock in the system. They charged the company for their services rendered. ERProof SAP MM SAP MM Training Subcontracting Process in SAP. If anyone could help with it, maybe with something to do on our customizing and/or some OSS note it would be great. The process uses what you could call a Dummy Sales Document Type. 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