What Is the Subcontracting Process in Sap

Receipt of goods for the first items of contract manufacturing (MIGO) A good explanation of the subcontracting process for 2 levels. Through screenshots, the process is self-explanatory. Simple and in simple language. ganeshsapscm.com/2015/07/05/down-payment-process-in-sap/ In this blog post, we looked at the outsourcing functionality in SAP S/4HANA for logistics. Have you learned anything new? Ring in the comments. Hi Ganesh, thank you very much for your explanation. I`d like to ask you a question about the outsourcing process in SAP. Is there a way to avoid the purchase order step? I will try to explain better: Do you know if we can avoid the PO only doing 2 MvT in MIGO tcode? For example, the movement type 561 O and 543 O? Especially in longer manufacturing processes for delivery, this additional update functionality and transparency should provide more reasons to use the standard outsourcing process in SAP S/4HANA and avoid customizations and non-standard workarounds to support this process. Question. If I send «A» material to the subcontractor and later receive 90% of the «B» material and 10% of the «A» material, how can we process it? How do I configure the process and BOM? Can we have subcontracting orders without BOM/components. The process is very similar to the generic subcontracting procedure (see Subcontracting). The main differences are that you invoice the subcontractor for the supplied components (step 3 in the process flow below) and you invoice the components they consumed (step 6(b)). You also offset the invoices between them (step 7).

If additional charges apply, enter them in the Terms tab, as shown in the screenshot below. Finally, you register the subcontracting order. Price conditions in a subcontracting order Can you explain the accounting entries in subcontracting? In earlier versions of SAP ERP, you could also verify inventory outsourcing by vendor by running reports from a specific IMG menu path. This transaction is now available as a «View Subcontracting Inventory by Vendor» application in SAP S/4HANA, as shown here: A hardware document to remove components from vendor inventory and add new engines to factory subcontracting product inventory The next step in the outsourcing process in SAP is to validate the invoice receipt on the purchase order via the MIRO transaction. Start MIRO transaction If the subcontractor obtains components from another company instead of making them available, you can print a list of subcontracting components from the subcontracting order instead (message type SC01). After issuing a subcontract order and shipping the components to the supplier, the buyer will not technically receive updates on the production of the purchase order until the final product or sub-assembly with the components is returned from the supplier to the buyer. Tracking materials and evaluations that still technically belong to the purchasing organization becomes difficult with the standard process. This is often used by finance and other stakeholders on the buyer`s side to justify setting up shadow factories to represent the supplier and then moving and tracking materials around those factories.

This creates a variety of additional transactions for each subcontract and does not fit well. Hello. Can you explain how to perform this process without a BILL of materials? To upgrade MRP procurement processes in SAP ERP to SAP S/4HANA, you need to take stock of your existing suppliers and processes and identify gaps, perform a standard upgrade to SAP S/4HANA, and then do the following in post-processing: SAP Ariba Supply Chain Collaboration for Buyers provides an additional level of transparency that has been sought in the procurement process. including notifications of receipt and consumption of supplier components as well as full transparency of manufacturing at the business-to-business level on the supplier`s progress. Through the supplier portal on the Ariba network, a supplier can connect and confirm the consumption of supplier components in the assembly, as shown below. The process flow is illustrated by the following example: You assign the assembly of motorcycle engines to Redware Co. Redware charges you 2,000 JPY for each engine it assembles. The evaluation price of all components you provide to Redware Co. is 30,000 JPY; For these components, you calculate 33,000 JPY. In SAP S/4HANA, MRP zones must be created for each subcontractor; If there are no material sheets specific to the MRP area, MRP uses standard scheduling settings. This differs from the classic SAP ERP for outsourcing, in which you can plan with or without MRP zones. To create a subcontract order, start the ME21N transaction or navigate to the following path in the SAP menu: Logistics→ Materials Management→ Purchasing→ Purchase Order→ Create (ME21N).

SAP Menu Path to ME21N Transaction Can I transfer the hardware to the vendor before increasing the outsourcing position? In this scenario, as shown in the following structure, two raw materials (SUBCON-RM01 and SUBCON-RM01) are made available to the first supplier (SC Vendor-01). This approach requires more manual effort and accounting acrobatics than optimal. The easiest way to support outsourcing processes is to use the standard approach to outsourcing in the system. The process is as follows: Starting with SAP S/4HANA on-premises 1909, you can also view the end-to-end assembly flow diagram from the first component to final assembly for MRP-generated parts in the Monitor Vendor Documents application. Additional features of the SAP Fiori application for outsourcing are: Conclusion: This article explains the process scenario of the multi-level outsourcing process in SAP Purchasing. I believe it will be useful and provide enough information to readers. If you have any questions or clarifications, please contact us. Let`s start by discussing the steps involved in the outsourcing process in SAP. They are summarized below: Another example of the procurement process in SAP is when a company has provided a subcontractor with raw simulations and packaging materials. The subcontractor converted the raw simulations into prepackaged Sims and returned the finished product to the company.

They charged the company for the services they provided. This tutorial provides detailed instructions for working with outsourcing in the SAP ERP system. The subcontracting request lists the finished material that must be purchased in a subcontracting line. For each subcontract line, the system copies the hardware components that are to be made available to the supplier from the BOM. The bill of materials refers to the final product that the supplier will deliver. .