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Subcontracting Processing

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Subcontracting Processing
Stechies

The Subcon Process in SAP Purchasing Modules

Sub-Contracting PO: The service provider provides the part to be maintained to the subcontractor along with other components that may have to be exchanged during the subcontract rework. After maintaining the part, the subcontractor returns it to the service provider.
BOM: A complete, formally structured list of the components that make up a product or assembly. The list contains the object number of each component, together with the quantity and unit of measure. The components are known as BOM items.

You can create the following BOM categories in the R/3 System:

  • Material BOM - Functional location BOM
  • Document structure - Sales order BOM
  • Equipment BOM

When the main BOM item is a subcontracted item (in the item category field of PO/PR line item, the value is "L"), then the system will automatically know that the sub items need to be issued out. Such issue, from the internal system processing viewpoint, is only a transfer from one storage location to the subcontractor vendor storage location rather than a consumption. It will only be deemed a consumption when the parent item is received back from the vendor. The system will automatically track all the items sent to the vendor waiting to be received back.

The following are the pre-requisite procedure for handling subcontract items:

  • When setting up the subcontracted parent item (material type HALB), the material master has a procurement type of "F" and special procurement of 30. The effect is that when the purchase requisition was created by MRP or manually, the item category will be "L".
  • BOM items for the main part has been set up to contain all the materials which must be supplied FOC to the vendor.
  • There is no need to set up the routing for the sub-contracted main item.

The following are subcontracted related procedures:

  • Finding out what sub-items need to be issued to subcontractors and issue them.
  • Finding out what sub-items have been issued to subcontractors and waiting to come back.
  • Receiving subcontracting item (from the store viewpoint, there is no difference from normal receiving).
  • Invoice processing: the invoice is only for the services and is no different from normal processing.

Invoke transaction ME2O

  • Leave the Date required, Material and Plant blank unless you wish to limit the listing to a specific area. Check the Only Negative available SC stocks if you only want to look at the cases where materials need to be handed to the subcontractor. If you do not check this, then items which have already been issued to the subcontractor and waiting to come back will also be shown.
  • To issue the items to the subcontractor, select the item, then click Post goods issue button.
  • Enter the storage location from which the sub-items is taken out, and the quantity given.
  • If there is not sufficient on-hand stock to be given to the subcontractor, then the system will issue a "0 items posted" message. If there is sufficient quantity, the system will transfer the quantity to the vendor storage location. On this screen, you can also check the on-hand stock balance by clicking the stock overview and stock/requirement buttons. You may also place the cursor on a PO number and display the PO details giving rise to this SC issuing requirement.  

Subcontract Posting

Material Document

  1. 101 + Receive in the new Material after sub-contract
  2. 543 - Clear the quantity in Material Provision for Vendor

Accounting Document

Debit Inventory - New Part 150
Credit Inventory - Purchase Offset 150

Debit Service cost for sub-contract 50
Credit GR/IR - Inventory 50

Debit ROH - Material Consumed 100
Credit ROH - Material Consumed 100
 


Comments

  • 28 Jan 2017 6:34 pm Best Answer

    How Sale subcontracting process cover and implemented in SAP, consider the following Business detail :

    -          Creating SC Sale order with reference of SCBOM  or input components

    -          Customer send us the components

    -          Receipt components in stock

    -          Issue the components from stock to production line

    -          Production line do the assembly

    -          receipt the finished goods in warehouse

    -          deliver the FG to customer

  • 02 Jun 2009 8:26 am
    I don't know why the FI posting are set as last dobule entry,Debit and credit side is the same side which is ROH - material consumed 100.

    MSN : ssci@live.com
  • 26 Apr 2010 12:05 pm
    hi,

    what about GR in this process? I mean, how the BOM will get determined when posting GR with reference to a DN?

    Thanks,
    Manj
  • 29 Aug 2010 3:42 am
    hi what about the Vendor account ..it not came in picture for accounting