S/4HANA Subcontracting with MRP Area

[lingaiahvanam]

In subcontracting, the vendor is provided with materials (components), which he uses to produce the finished product. From the point of view of materials planning, subcontracting is initiated by the special procurement key Subcontracting.

The special procurement key is allocated to the finished product or the assembly in the material master ( MRP 2 view).

In order to plan specific material requirements for each individual subcontractor, you can use MRP areas. You can thereby create an individual MRP area for every subcontractor

Main differences between S/4HANA and ECC.

ECC - with vendor segment

S/4HANA - without vendor segment

If you do not use MRP areas for components to be provided to the subcontractor, there is no separation of provision stocks and subcontracting requirements. The system displays the provision stocks and requirements to be provided as usual stocks and requirements in the net requirements segment of the plant. The provision stock that is already available for a subcontractor (supplier) will be considered as unrestricted-use stock in the plant. The system uses this stock to cover all requirements inside the net requirements segment, not only the requirements for components to be provided to the subcontractor (supplier).

S/4HANA subcontracting process redefined with flexible functionality. In SAP S/4HANA MRP uses default planning parameters if MRP-area-specific material master records do not exist. You only have to create an MRP area for every subcontractor. Of course, it is still possible to create MRP area/supplier-specific material master data if required.

This simplification has the following advantages:

• Separate planning of every subcontractor is possible without having to create an MRP-area-specific material master record.


• The planning logic is simplified. There are two rather than three different ways to plan parts to be provided to a subcontractor.

The default way of planning parts to be provided to subcontractors is based on MRP areas. A subcontracting MRP area should be created for every subcontractor. It is not required to create an MRP-area-specific material master record for every part to be provided to the subcontractor, but of course, it is possible if you want to overrule the default planning parameters.

If you have several subcontractors requiring the same component materials and if you do not yet use MRP areas to plan the required components then proceed as follows:

• Create MRP areas for every subcontractor (can be done before or after upgrade)


• Run regenerative MRP after the upgrade

Subcontractor MRP area configuration

You can follow SAP navigation path or transaction code OMIZ directly to configure MRP areas.

Click on New Entries and create MRP area as below.



After maintenance of MRP area click on double click on Subcontractor (one entry per MRP area) and maintain the vendor details as below.

Components Planning with Subcontracting Process

Master Data MRP Area

MRP area called SUB_001 available to plan separately associated components. SAP suggested maintaining the MRP area parameters to all components which are planned under the MRP area in MRP 1 view (Material R-100-101).



Click on MRP areas and maintain the MRP parameters as like plant parameters.



It is important to maintain MRP 2 special procurement to 45 - Stock transfer from plant to MRP area.



Make a note that you need to adopt data while entering MRP area parameters and save material.

Subcontracting Process Execution

Demand Flow

Forecast updated for subcontracting header material called F-100-101.

MRP Live

After forecast updated runs MRP live.



Based on MRP live log total of 4 materials planned 1 material with classic MRP and another 3 with MRP on HANA.

Analyzing MRP results

After MRP run completed purchase requisitions created for header article based on planning horizon.



Now go to component R-100-101 and analyze the result at a plant level and MRP area level.

Plant level - Stock transfer reservations from the plant to the provision stock of the subcontractor.



MRP area level - Procure the components that you provide to a subcontractor for the production of an assembly, by transferring stock from a plant to the MRP area of the subcontractor.

Mass maintenance

Mass processing reports RMMDDIBE and RMMDDIBE02 can be used for maintenance of MRP areas.

Additional references:

https://launchpad.support.sap.com/#/notes/2586059

https://launchpad.support.sap.com/#/notes/2227532

https://launchpad.support.sap.com/#/notes/2268044

https://launchpad.support.sap.com/#/notes/2516504

https://help.sap.com/viewer/fe39e10a9a864a8f8dc9537704f0fa13/1709%20000/en-US/60adce5314894208e10000...

https://blogs.sap.com/2017/10/19/5-reasons-to-use-subcontracting-mrp-areas-in-s4hana./

Best Regards,

Lingaiah

[former_member567077]

Thanks for sharing the information

[former_member534770]

Thanks for sharing! This really simplifies the configuration of the subcontracting process.

[senthilraja_ramasamy2]

Thank you. it is clear. Also I have a question regarding sending the components to sub-contractor vendor. in Me2O will it be possible to create outbound delivery against the sub-contractor vendor ( This is the case in ECC). But in S/4 System have only options to select only Stock Transfer Reservation to create Outbound Delivery?

 

Regards,

Senthil

[lingaiahvanam]

Thanks for your message pruth_v

[lingaiahvanam]

Thank you for your comment rickkonings89

[lingaiahvanam]

Thank you for your comment senthilraja.ramasamy2

I would suggest to check the SAP documentation for multiple ways to handle components to be provided in subcontracting.

https://help.sap.com/viewer/fe39e10a9a864a8f8dc9537704f0fa13/1909.000/en-US/eba9ce5314894208e1000000...

[former_member649284]

Thanks for sharing the information. It's really helpful.

[former_member603259]

Good blog thanks for sharing.

[former_member655868]

Excellent and very Informative.

[former_member655912]

Nice blog about Subcontracting process in S/4.

[former_member657743]

Good blog and thanks for sharing information.

[rangaswamy_govindaraj]

Very Good write up. Appreciated.

Does the subcontract vendor always need to maintain in the configuration (OMIZ) and move to other clients ? If we need to maintain the subcon vendor in development system we need to create all the BP master in development also ?  How do you manage this ?

Thank you

[former_member350108]

Very good blog and new topic in S/4HANA subcontracting process.

Vijay

[lingaiahvanam]

Thank you Chandramouli!

[lingaiahvanam]

Thank you Ravinder!

[lingaiahvanam]

Thank you Prathima!

[lingaiahvanam]

Thank you Suresh!

[lingaiahvanam]

Thank you Varesh!

[lingaiahvanam]

Thank you Vijay!

[former_member294637]

Found an issue, if no subcontractor specified MRP area for component, then the subcontactor dependent requirements are not avaiable to show on MD04, when tried to swtich the mrp area to subcontactor mrp area, it prompt that "No mrp area is defined for the material".

Not sure how the simplification item for subcontractor mrp area works.

[former_member544880]

Nice document prepared by you.

Here, I have small query with me 1 material is planned with Classic MRP & the remaining 3 with Live MRP.

1-Classic_3-live MRP issue in MD01N

 

What was the reason to force that material for Planning with Classic MRP instead Live MRP in MD01N.

How can we check the root cause & resolve the restriction so that it will be considered for Live MRP.

Thanks in advance,

Pradeep Khairnar

[former_member721047]

Hi,

Thanks for this very informative article. I also would like to understand as to how can we assign vendor during MRP area configuration (type 03) in golden client. Is there any work around for this? In our system, we can not maintain any master data in golden client.

Thanks,

Vinay

[former_member300135]

Hi,

it is good information for MD01N, thanks your sharing.

i have a question about MD01N and MRP area, can you help to check and analysis if you have free time. thanks.

my question is bellow link: https://answers.sap.com/questions/13230435/md01n-generates-purchase-requisitions-instead-of-t.html