Sub-Contracting process with Scrap and Few more Examples
Concept:
To work on
all these assembly parts/Extra accessories, we need manufacturing unit where we
can do all this assembly but its costly and time taking for the preparation and
we may have some quality issues, by keeping all this in mind every company would
like to go for Sub-contracting process- Which means
Certain
companies which will be outsourcing (Giving products to other companies), where
they use to work only on this assembly with best quality and take the price for
only service.
Examples:
Few of the
scenarios with explanation.
1 We have 3 child materials and we
need the Parent Material (final product), but we will not assemble or
manufacture any tools but for the production/sales requirements we need the
final product to be assembled.
we will take the 3 child materials from 3
different vendors and we will maintain a BOM with parent material, after that
creating subcontracting order for parent material (BOM will be taken
automatically with child materials in components).
Do the GR for all 3 materials, and do the
transfer posting for all child materials to vendor through MB1B or ME2O
Now do GR for subcontracting vendor, where you
can see movement types 101 and 543.
Child materials
1. L-shaped metallic plate
2. Spring
3. Bolts for fitting
Parent Materials
1. Metallic plate with full furnished.
Implementing:
·
First,
we need to procure the materials which are required to prepare the parent
material, here we need to procure L-shaped metallic plate, Spring, Bolts for
fitting from the respective vendor.
·
We
can create 1 PR, with 3 lines mentioning 3 materials in each line individually
with respective vendors or same vendor (based on your requirements)
·
Create
PO for above 3 materials and as per the respective quantity and do the MIGO
(Goods receipt), so that stock will be stored in the plant premises.
·
Complete
all 3 material MIGO as mentioned above
·
Now
create a BOM for the parent material, so here BOM is very important for all
Parent materials.
·
CS01-Create
BOM
·
Enter
parent material following with all child materials inside
We are maintaining BOM
for-what are the components that required to create a one complete parent
material.
·
Now
create New PO with Item category L-mention the parent material number, so that
automatically child materials will go to Material Data-Components (BOM -we
maintained)
·
Now
in components we have 3 materials (Child)
·
Al
the 3 child materials will go to sub-contract vendor for assembly, to send
those materials to vendor we need to perform the movement type.
·
MB1B-stock
transfer- we need to transfer the stock of all 3 materials to vendor stock by
using the movement type 541,
·
Once
the stock is transferred, we can see those stock in MMBE-stock under vendor.
·
Now
vendor will deliver the assembled goods to plant and we need to perform the
MIGO
·
Perform
the MIGO with 101- now the stock should be available in MMBE for parent
material
·
Remaining
child materials quantity will be 0
Vendor
to vendor material shifting through Subcontracting process:
Scenario:
We need a parent material which will get from
subcontracting vendor and child material from another vendor, the child vendor
should send the material directly to subcontracting vendor.
Eg: we would like to order a cell phone battery
from child vendor, and he will directly send that battery to subcontracting
vendor and subcontracting vendor will deliver the fully furnished phone. We need
this to be implement in the SAP.
Step 1: Create a normal PO with cell phone
battery and go to the delivery address tab in PO, here you can find SC vendor,
check the SC vendor and mention the vendor number in the vendor field.
o
So
that SAP will pick the delivery address as vendor address automatically.
o
Now
the child vendor will deliver the cell phone battery directly to subcontracting
vendor (to view this action in SAP, follow below)
o
Now
post the GR for the child material PO, MIGO and mention the PO number and date.
o
Enter
the quantity, system will not ask for storage location and tick OK and post the
GR.
o
Now
check in MMBE (Stock Overview), you can see the material is maintained with
vendor.
Step 2:
Now create subcontracting PO for the parent material
(Phone) with item category L, as we maintained BOM the components will be taken
automatically (Child materials) and delivery address to plant in the PO.
Now process for GR for the parent material and
maintain the quantity.
If required explore the parent material with +
icon and you can see the child materials maintained with movement type 543.
§ 541- Sending the material to the subcontracting
vendor stock.
§ 543-Consumption of material which is
delivered to subcontracting vendor.
§ 545-scrap material while consumption
or vendor material used for the parent material.
Ordering
Material and scrap from the subcontracting vendor:
Subcontracting material with scrap.
As we know when the material is manufactured by
the vendor, scrap will generate automatically and few of the scraps will be
costly or needs to be moved to plant scrap process, so in this case we need to
implement such that vendor should provide the parent material along with the
scrap.
E.g.: we are ordering a material of sofa; we
procure wood from one vendor to plant and will move that material to
subcontracting vendor through 541 and will order a subcontracting order along
with scrap.
Step1:
o
Create
a normal PO for procuring the wood from the vendor and once we receive that
wood to plant(warehouse), we can follow the remaining process as mentioned
below.
o
Maintain
BOM for parent material, while maintaining we will update child materials with specific
quantities, basically it will multiply with PO quantity. So, maintain accordingly.
o
Here
for scrap, we are taking the scrap from vendor which are consumed for the child
materials. If we want that material to plant, we need to create a new material
with the name “Scrap” and maintain in BOM as 1- and save the BOM.
·
Meanwhile
create a subcontracting PO with parent material with item category L, where BOM
will be taken automatically with 1- quantity and child materials.
·
Now
do the goods transfer in MB1B with movement 541, so that stock in the warehouse
move to vendor stock and now the subcontracting vendor will perform the
manufacturing process of sofa.
·
He
will create the sofas as per the quantity and delivers the goods to plant along
with scrap.
·
Now
do the MIGO with 101 movement and post the sofas quantity and click on + icon
in parent material, you will see the child materials with scrap.
·
Child
materials – means consumed and will be used for sofas.
·
Scrap+
means waste generated and needs to bring to plant as per the PO.
Now go to MB1B and mention the movement 542,
bring back the scrap to plant (SAP stock overview)
Final: if we are procuring one material with
subcontracting vendor, we need to go with 3rd example, where we need
to process the BOM with -quantity instead of scrap we need to post procuring
extra material number.
No need to do 542 movement, where this will be
consumed for the parent material.
Please like and comment if you like the content.
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