SAP Material Download
SAP PP Subcontracting Process
Process Owners use Subcontracting as add on facility to complete their manufacturing process within time and cost.
Few reasons for Subcontracting Work
1) Unable to complete product due to no facility.
2) Unable to complete product due to capacity overload.
3) Sometime subcontracting is economical as production losses will be handled by vendor.
4) Company Staff is less skilled for particular production activity.
5) Special testing facility requirement.
6) For survival of subsidiary unit.
MASTER DATA NEEDED
Material Master MRP 2 View-Enter procurement type as External procurement (F) and special procurement as subcontracting (30)
BILL OF MATERIAL
Bill of Material is essential part of subcontracting process, here we define list of items to be send outside for further processing.
we should also consider scrap generation norm in bill of material in order to have smooth and flawless supply of FG product.
MASTER RECIPE OR ROUTING
Routing consist sequence of operations to be perform and they are controlled by control key.
Here control key works as CPU of computer, it not only control different business function but also guide system for steps to be perform.
above screen, Operation no 0040 is defined as subcontracting relevant Hence Control Key FG01 assigned to it.
SAP Provides defaults control key with standard set up,we can also create new keys as per requirement.
It contains configuration settings for business process controlling.
Create Purchase info record for info Categ Subcontracting w/o material
it stores all purchase relevant details like price,tax code,buyer grup etc.
System would create Subcontracting PR in background against production order.
we will suggest you to create new doc type for subcont with separate no range,it will make tracking easy.
Click on Operation to get Purchase requisition number, Operation Status is REL.
In below screen 3 operations are displayed, 1 st and last operations are to be performed in house while 2 nd operation needs subcont.
System automatically picks up Account assigns categ- Order (F) and also Item Category -Subcontracting (L).
some additional information can also be passed in above shown text field, it will be printed on order provided to vendor.
Now we can convert above PR into subcontracting purchase order for further Process.
subcont order should always assigned to correct release procedure so that approval formality can be fulfilled.
Click on Component button for Item and system will automatically copy BOM components to purchase order.
Save and PO issue to vendor.
Now we will transfer Raw Material i.e. BOM Components to vendor.
below posting will remove inventory from our stock and will place into vendor stock however value will be in our books only.
T Code MB1B mvt. type. 541 against Purchase Order
Subcontracting stock will be displayed as material provided to vendor in MMBE.
Subcont Stock will be reduced at the time of Goods receipt of FG product.
On Manufacturing Process completion, vendor need to send material back to company
Here we need to take goods receipts against Order
Finish Product Stock updated by Mvt Type 101 while component sent to vendor would be consumed by Mvt type 543.
SAP changes status of operation after each transaction,status is a key which denotes different business transactions.
Check Operation status in Order View
PRODUCTION ORDER CONFIRMATION
Operation no 20 Preparation confirm
Operation no 40 Preparation confirm
Operation no 60 packing confirm
Reconciliation is very necessary at the end of every subcont process,we observed that many time companies occurs loss in subcontracting due to improper recon.
list of goods mvts are displayed in next screen.
Cost analysis Details.
Subcontracting process also possible Via MM Route, in that direct order creation and same mvnt types are used
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