Scribd
Upload
257 views23 pages

Lesson 9 - Subcontracting

Here are the key steps to complete the subcontracting process and procurement cycle as described in the case study: 1. Create a BOM for the end product Z## including components C## and D##. 2. Create a purchase requisition for the end product Z##. Select item category L. 3. Create a purchase order for component C##. Check the SC vendor indicator and enter subcontractor vendor ID in delivery address. 4. Post goods receipt for C##. It will go to subcontracting stock. 5. Do a stock transfer of D## from your storage location to subcontracting stock at subcontractor's premises. 6. Do a stock transfer of

Uploaded by

Saurabh Rane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
257 views23 pages

Lesson 9 - Subcontracting

Here are the key steps to complete the subcontracting process and procurement cycle as described in the case study: 1. Create a BOM for the end product Z## including components C## and D##. 2. Create a purchase requisition for the end product Z##. Select item category L. 3. Create a purchase order for component C##. Check the SC vendor indicator and enter subcontractor vendor ID in delivery address. 4. Post goods receipt for C##. It will go to subcontracting stock. 5. Do a stock transfer of D## from your storage location to subcontracting stock at subcontractor's premises. 6. Do a stock transfer of

Uploaded by

Saurabh Rane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 23

Subcontracting in SAP MM

• Subcontracting process in sap mm is a kind of special procurement where your


company orders material from external vendor and provides components to
the said vendor for production.
• For example, if your company requires a product X , then for the production of
the said product i.e X, company provide two raw materials R1 and R2
respectively to external vendor.
• After production or rework your vendor will supply required material i.e X
Some interesting details about subcontracting process
• Purchase order for finished product raised which includes components to be
provided for the subcontractor. You can add these components manually or
through Bill of Material.
• Components provided gets added in the stock as material provided to Vendor. You
can check stock position vide transaction code MMBE.
• Subcontractor (Vendor) supplies finished product . After this enter Goods Receipt
for these products and consume components gets clear from stock.
• In case of over or under consumption of the components provided to vendor,
subsequent adjustment entry has to be made.
• For  providing material to Vendor available stock types are unrestricted use and
quality inspection i.e. we can supply material to the vendor from these stocks only.
• A material can be provided to the vendor through Transfer Posting from
unrestricted use stock to the stock of material provided to the vendor with a
movement type 541 O.
• When vendor supplies ordered material you can post Goods Receipt (T code
MIGO). You can change component quantities manually if vendor informs about
any excess or under consumption.
• In case of such case,  we have to post Subsequent Adjustment to correct the
consumed components.
Subcontracting Process Flow
(Special Stock Type : L)
Step 1 - Create BOM for End product X (CS01)

Step 2 - Create Inforecord for End product X (ME11)

Step 3 - Create Purchase Requisition for END Product X (10pc) (ME51N)

Document Type :NB; Item Category : L ; by providing components i.e. C (10 pc ) and D (10 pc ) to
subcontractor ; In Material Tab click Component button

Step 4 - Create Purchase Order wrt Purchase Requisition (ME21N)


Material Z 10pc ; Rs. 1000/pc in subcontracting process

Step 5- Transfer Posting (ME2O/ MB1B - 541) to Subcontractor


Provide Components (C & D ) from plant (Stock Transfer) Check Subcontracting stock in ME2O ;

Step 6 - Post Goods Receipt wrt Purchase Order (MIGO). 101


With reference to PO for material Z 10pc

Step 7 - Invoice Verification (MIRO)


Material Z 10pc Rs. 1000/pc
Step 1 - Create BOM for End product X (CS01)

X
Finished
Product

Received 10
Z (3)
units of Z from
Semi Finished
Subcontractor

C D
Raw Material Raw Material

Provide input of Subcontract


10 units of C & D
to subcontractor
Display BOM (CS03)
Assembly Cost
40

Subcontracting
Charges
+ 20
Step 2 - Create Inforecord for End product X
(ME11)
Step 3 - Create Purchase Requisition for End
Product Z (10pc) (ME51N)

Item Category L

Explode BOM
Components
Step 4 - Create Purchase Order wrt Purchase
Requisition (ME21N)
Add initial Stock for Raw Materials (MB1C)

• Material C – Add 10
Units
• Material D- Add 10
Units
• Movement Type : 561
Report – Subcontracting Stock Monitoring for Vendor Before Transfer
Posting(ME2O)
Step 5- Transfer Posting (MB1B / ME2O) to Subcontractor
Movement Type : 541
No Accounting Document is Generated
Report – Subcontracting Stock Monitoring for Vendor After Transfer
Posting(ME2O / MMBE)
Display Warehouse Stock of Material (MB52)
Step 6 - Post Goods Receipt wrt Purchase Order
(MIGO). 101

• In Line item row click “tree” button then it will display the consumed
component details in the end product. Select Component line item and in
“ where tab observe the automatic movement type “ 543” “O

(417001- FRL) Purchased Services /External Services A/ C… Dr 20


To (191100- WRX) GR/IR A/c 20
(400020- BSV) Raw Material Consumed A/ C… Dr 10
To (300000- BSX) Inventory A/c 10
(790000- BSX) Work in Progress A/ C… Dr 40
To (893010- GBB-VKA) Cost of Goods Sold A/c 40
Report – Subcontracting Stock Monitoring for Vendor After Transfer
Posting(ME2O / MMBE)
Step 8- Invoice Verification (MIRO)
• Note Accounting Entry:
Step 8- Vendor Payment (F-53)
Step 9-Subsequent Adjustment
• After GR, if vendor informs any under or over consumption of components
then the same details will be entered as “ Subsequent Adjustment”.
– MIGO or MB04
– MIGO
– Subsequent adjustment
– PO Number
– No Movement Type (System will take automatically)
– For end product subsequent adjustment movement type is “121” is picked
automatically
– Enter under consumption Qty 2 (Component line item)
– Movement type “544” O
– Post
– Now in MMBE this under consumption quantity “2” PC shows at subcontractor
premises
– Note: Transfer Qty to own plant “MB1B” 542 movement type
Case Study
• Material Z## has to be procured through subcontracting from a
subcontractor, for which we need to supply components of
material Z## (C## and D##) to the subcontractor.
• We have stock of Material D## in our Storage Location, but no
stock of Material C##.
• So Material C ## has to be procured from a vendor and should be
directly sent to our subcontractor. Where as Material D## will be
sent from our premises.
• After supplying the goods for subcontracting, complete the
subcontracting process cycle.
• Also make payment to the Vendor for procurement of Material
C## and complete the simple procurement cycle.
– Hint : While creating Purchase order for Material C ## , check indicator
SC Vendor (CMMDA-LBLKZ) and enter subcontractor Vendor ID in
Vendor field(CMMDA-EMLIF) in Delivery Address tab.

You might also like