MM04 – Subcontracting process in MM

Mohamed ARFAOUI
05/06/2018

© 2018 Capgemini. All rights reserved. 1

AGENDA

Context

MM subcontracting process

Live demo

Customizing

Questions / Answers
 MM09
Parcours Classroom MM
Vendors Returns

MM04

Subcontracting

MM01
Material Management
MM05
Overview
Consignment

MM09
PP12 MM06
Inventory
Interco, intraco, three Management
Batch Management party

MM07
MM02 MM03
Standard purchasing Pricing
Master DATA
Flow
Purchasing
MM08

Service Purchasing
© 2018 Capgemini. All rights reserved. 3
MM04-Subcontracting process
iSAP Template

2.1 Receive 2.2 Locate source 2.3 Order 2.4 Receive / 2.5 Manage
Procur
e To

Pay
Request / create Materials/ Manage Materials / Accounts
contracts Services Services payable

2.0.1 2.1.1 Requisition 2.2.1 RFQ Quotation 2.3.1 PO Processing 2.4.1 Goods Receipt Processing 2.5.1 Direct Invoice
Organization Processing Processing Processing
2.3.2 Internal Procurement 2.4.2 Goods Receipt Automotive
Structure 2.2.2 Contracts 2.5.2 Logistics Invoice
2.1.2 Requisition 2.3.3 Subcontracting PO 2.4.3 Vendor Consignment Processing
Approval 2.2.3 Vendor Evaluation
2.0.2 2.4.4 Subcontract Procurement 2.5.3 Credit Memo
2.3.4 PO Approval
Centralized 2.1.3 Reporting 2.2.4 Scheduling Processing
2.3.5 Vendor Returns PO 2.4.5 Service Receipt Processing
Vendor Mtc Agreements
2.4.6 Putaway Processing WM 2.5.4 Down Payment
2.2.5 Reporting 2.3.6 Consignment PO Process
2.0.3 Processing 2.4.7 Material Movements
2.5.5 Bill of Exchange
Decentralized 2.3.7 Reporting 2.4.8 Vendor Return Processing Processing
Vendor Mtc
2.4.9 Physical Inventory 2.5.6 Process Payments
2.0.4 2.4.10 Physical Inventory WM 2.5.7 GRIR Account
Purchasing Clearing
2.4.11 Inspection Lot Creation
Data
2.4.12 Inspection Processing 2.5.8 Bank Processing
2.0.5
Purchasing 2.4.13 Inspection Sample 2.5.9 Reporting
Conditions Processing
Management 2.4.14 Inspection Lot Usage
2.0.6 Decision
Purchasing 2.4.15 Quality Notification
Messages Processing
2.0.7 Service 2.4.16 Inbound Certification
Master 2.4.17 Supplier Corrective Action
2.4.18 Quality Order Management
2.4.19 Quality Control
2.4.20 Reporting

© 2018 Capgemini. All rights reserved. 4

MM04- Subcontracting process
Context
Definition:
The MM Subcontracting process involves sending raw components to
a vendor for specific manufacturing processes and receiving the
value-added finished material back into inventory.
Subcontract
Order
Subcontracting flow : required
master data

Plant Subcontractor  Material master

Provision of
Components  Subcontracting purchase info
record is required
(vendor=subcontractor,price= work
fee)

 BOM (bill of materials) is required

Delivery Manufacturing for the subcontracted product.
Goods
Receipt

© 2018 Capgemini. All rights reserved. 5

MM04-Subcontracting process
Overview

ME2O MIGO MIRO

ME51N ME21N

Components
Purchase
Purchase order provision to Goods receipt Invoice receipt
requisition
subcontractor
MM04-Subcontracting process
Subcontracting Purchase order

 Item Cat « L » used in

Subcontracting PO

 Each subcontracted item of the

PO has its required components
list(=BOM items)
 MM04-Subcontracting process
Components provision to subcontractor
Case 1 : Delivery with ME2O
 Once the SC PO is placed, the
components required for the
subcontracting operations need to
be provided to the subcontractor

Stock overview after components provision  Components can be provided :

- Case 1 : From the company stock

through ME2O : outbound delivery
from company’s warehouse to SC
is then required

- Case 2 By third party vendor with

direct delivery to the
Case 2 : Delivery by a third party vendor subcontractor (a PO with « SC
Vend » flag is needed in this
case)

 Provided components appear

under special stock segment
« Stock provided to vendor »
MM04-Subcontracting process
Goods receipt

 When the subcontracting

operations are finished, goods
receipt needs to be posted :

- Finished product is then received

in stock (movement code
« 101 »)

- Components used in
manufacturing process are
consumed from the « subcontractor
stock segment » (movement code
« 543 »)
MM04- Subcontracting process
Demo
MM04- Subcontracting process
Major customisation points

Customizing and data required for delivery creation (components provision to subcontractor)

1. Define delivery type for provision of materials: Materials Management/Purchasing/Purchase Order/Set up subcontracting
order

2. :Materials Management/Purchasing/Purchase Order/Set up stock transport order/Define shipping data for plant

3. Create the subcontractor as customer for the organizational unit assigned to the plant. Customer number must be
specified in the subcontractor vendor record.

4. Extend material master to the organizational units of the plant.

5. Assign shipping point for the combination of shipping conditions (customer), loading group (material) and the plant :
Logistics execution/Shipping/Basic shipping functions/Shipping point and goods receiving point determination/Assign shipping point
MM04- Standard purchasing process
Questions
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