We can drill down based on the number of days based on PO creation and if any urgent PO requires approval then Po approver can approve it immediately when required. 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. Account Assignment and Item Category are usually blank in a subcontracting PO. Participants will also learn about the associated customizing settings for the selected cross- application business processes. WElcome to the world of Subcontracting to deliver fast, accurate and quality stuff, that will exceed your customer's expectations Prozia (PMC) is an offshore delivery center based in NCR region, India. Do you have a question and want it to be answered ASAP? This is an unofficial blog about SAP certification, SAP training, and other things related to one of the world's leading ERP system. The consumption of the components is posted. Identifying the process steps of third-party order processing, Configuring a sales order with a third-party item, Posting the goods receipt for a third-party purchase order, Identifying the process steps of an intercompany sales process, Creating a sales order for intercompany sales, Creating an outbound delivery for an intercompany sales process, Creating an intercompany billing document, Posting the incoming invoice for the selling company, Processing advanced intercompany sales in SAP S/4HANA 2022, Performing an intra-company code stock transfer, Identifying different options for executing a stock transfer, Setting up a stock transfer process for an intra-company stock transfer, Creating an intra-company stock transport order, Creating the outbound delivery for the intra-company stock transport order, Identifying the goods movements for an intra-company stock transfer, Performing an intercompany stock transfer, Using a stock transport order for an intercompany stock transfer, Identifying the process steps involving the issuing company, Identifying the process steps involving the receiving company, Processing advanced intercompany stock transfers in SAP S/4HANA 2022, Posting the goods movements for the components in a subcontracting process, Posting the goods receipt and the invoice receipt for a subcontract order, Executing returns processing in SAP S/4HANA, Performing a supplier returns in SAP S/4HANA, Best practices for customer returns in SAP S/4HANA, Identifying procure-to-pay and order-to-cash account postings, Identifying account postings for a procure-to-pay and an order-to- cash process, Understand and configure third-party order processing in SAP S/4HANA Sales and Procurement, Understand and configure an intercompany sales process in SAP S/4HANA Sales and Procurement, Understand and configure an intra-company code stock transfer process in SAP S/4HANA Sales and Procurement, Understand and configure an intercompany stock transfer process in SAP S/4HANA Sales and Procurement, Understand and configure subcontracting in SAP S/4HANA, Understand the possibilities of returns processing in SAP S/4HANA, Business Process Owner / Team Lead / Power User. If a purchase info record has been maintained, the service charges are defaulted into the purchase order. ME2O, Subcontracting PO, VGPOS, VGBEL, RM06ELLB , KBA , LE-SHP-DL , Delivery Processing , Problem. 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 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. Copyright | If you are running a vanilla SAP S/4 HANA system, chances are youll be looking at an LB delivery type (Delivery for Subcon.). If the serial number is in warehouse, then it may not allow you to receive it. Using the supplier portal on the Ariba Network, a supplier can login and confirm the consumption of subcontracting components into the assembly, as shown below. Did you learn something new? Subcontracting with multiple production versions is supported. Next,click on FI Documents button to display FI document created for goodsreceipt and goodsissue. 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. Explore ABAP, FICO, SAP HANA, and more! Option- 2 User without login to each and every Individual PO -he/she can approve directly form FIORI Home page -Inbox part. Next, click OK checkboxes as shown below. PR to PO Conversion/ Create PO/Change PO/Display PO/manage PO/My Purchase order App. Double click on Accounting Document. Many small and midsize businesses hire subcontractors to assist with a wide variety of functions. 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? Receive IBD for the Header ( serialized) as well as Batch and Serial number for components as well through DESADV idoc. Post Goods receipt for PO & Good Movement App 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) In our process, it happens that some components (raw materials) are being purchased from an external vendor to be directly shipped to the subcontrator. It is likely to slip through tests and bite you only down the road. Create Supplier Invoice Apps or Incoming Invoice Apps. 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. The subcontractors charged the company for their services rendered per box. SAP Steps: 1.Create the finished goods material code. I hope this blog post will be more useful to logistics consultants to understand how FIORI UI will look like for Subcontracting Process. 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. Executing an intercompany sales process. The subcontractor converted the raw sims into finished sims well packed and returned finished product back to the company. 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. Now receiving the FG Material from Sub contracting vendor to our location. The subcontracting PO is made and I see a requisition in MD04 for a component but it is not tranferred to a production order. We only pay the prime contractor, prime pays the subs. I'm looking forward for the next ones , Thanks for sharing. If none, a green light will turn on near Balance fieldand the SAP system will show you accounting document which will be created. Material document posted and stock is placed in our location. Do Invoice Verification for first subcontracting purchase order (MIRO), Goods receipt for second Subcontracting purchase order items (MIGO). If there are any additional charges required, you input them in the Conditions tab as shown on the screenshot below. Sound off in the comments. Really its very useful for content. Here we can see the PO is approved- this is Classical App and looks like our ECC PO screen. but here the difference we are using FIORI UI instead of GUI Interface. It would have been nice if SAP had provided a BAdI enhancement here. Very easy to understand now. The labor charge is JPY 2,000 per piece. You can return it partially or full using a Purchase Order or not. Hi, 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! So it will automatically explode when we create purchase order. However if they have never been shipped due to a loading problem on the subcontractor side, that is definitely not ok. A subcontracting product is valued with the price of the service plus the cost of the components. Through VL31n tcode, we create the inbound delivery and the new batch for the material. Did you like this SAP MM tutorial? 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. Any one help me to this query ASAP? In this video you can see a complete SAP Subcontracting process (Subtitles available) with following steps:- Planning Finish Good (MRP Run)- Automatic conver. In ME21N transaction, you need to select a Document Type and provide a Vendor as shown on the below screenshot: In the Item Overview screen, you need to use Item Category L which is used for subcontracting documents. How to edit personnel no. Your comprehensive guide to SAP S/4HANA sourcing and procurement is here! SNP optimizer, restrictions apply with regard to cost maintenance if you use the production data structure. 1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N) 2) Keep delivery address to plant as by default. A planned order in the subcontractor location produces the material in that location and a stock transfer requisition transfers the material from the subcontractor location to the demand location. Online Help Keyboard Shortcuts Feed Builder What's new When the manufacturing process has been completed, the subcontractor delivers the ordered product (incorporating the components provided) to the ordering party. Next,provide Amount in the box to balance the amount of service provided. We would be happy to hear your feedback or questions. The good receipt and the goods issuewill be done simultaneously by the SAP system. During the MRP run, the system explodes the BOM requirements and classifies dependent subcontracting elements as such. 2) Keep delivery address to plant as by default. Standard Process Flow ME21N - Purchase order creation MIGO_TR - Send components to a subcontractor 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. We are sending and receiving same material and same serial numbers. Get step-by-step instructions to configure sourcing, invoicing, supplier management and evaluation, and centralized procurement. It can also be done through via MIGO transaction. Depending on the case it may be correct or not. 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. Here in the highlighted box you provide the number of your subcontractor. Process flow of basic subcontracting process with deliveries 1 - ME21N - Making Subcontracting Purchase Orders In order to create a subcontracting purchase order it is necessary to choose an item type 'Subcontracting': 'L' as highlighted in the screen below. it is more useful apps. Itd be a big help for us, and hopefully its something we can address for you in improvement of ourfree SAP MM tutorials. This enables you to assign information about the batches used and the component quantities in the inbound delivery. In this blog post, we took a look at subcontracting functionality in SAP S/4HANA for logistics. If the material is already available in the client own stock, it will be issued from the unrestricted use stock to the vendor. the issue of components which we provided to the Subcontractor is triggered to 543 Movement type The customizing entry in the supplier master is sufficient to trigger stock transfers and reservations from the plant to the subcontracting MRP area. As subcontracting Process everybody knows and it is not a new topic.. Read on for more about the SAP Subcontracting PO Delivery Setup. Every organization acquires material or services to complete its business needs. 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). In previous versions of SAP ERP, component materials to be provided to the subcontractor could be planned as a separate stock. 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. Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant. I hope this will be more thrill and give happiness when working in FIORI. 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. Is approved- this is Classical App and looks like our ECC PO screen if serial. 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