Subcontracting Process

[#1]

Hi,

During subcon process of doing GR of finished product via 101, I am unable to view movt type 543 in MIGO-Display docs even though components are consumed and stock has increased

[Former Member]

answered

[Former Member]

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

Steps involved in Sub-Contracting PO: (BOM Material will be supply from Plant)

1. BOM Material Stock to be maintain in plant.

2. BOM to be maintain for child components (or) using MB1C u2013 561 Initial entries to be made.

3. Create PO to Sub-Contractor with Item Category (L) for Sub-assembly & explode BOM.

4. Use MB1B u2013 541 Movement type issue material from Plant to Sub-Contractor.

5. Then do MIGO, MIRO.

BOM Mat. will be supply from Mat. Vendor to Sub-Contractor Vendor directly:

1. BOM to be maintain for child components.

2. Create PO to Mat. Vendor for supplying of child mat. (Choose sub-cont. vendor In Item level PO Delivery Address

Vendor SC Vendor).

3. Create PO to Sub-Contractor with Item Category (L) for Sub-assembly & explode BOM.

4. Do MIGO for child components.

5. Do MIGO for Sub-assembly to transfer mat. from sub-cont. to Plant

6. Do MIRO for both Sub-Contractor GR & Mat. Vendor GR.

[Former Member]

Hi,

What Is Subsequent Adjustment In Process Of Subcontracting

After the subcontractor (as vendor) had delivered the ordered material (end product), you posted the goods receipt to the subcontract order. The system determined the necessary components for each purchase order item and created for each component a goods issue item with the quantity that was determined in the purchase order.

If the vendor informs you after these postings that a greater or smaller quantity of the subcontracting components was actually consumed than planned in the purchase order, you must post a subsequent adjustment to correct the component consumption.

If the component is a by-product, you must post the corrected by-product receipt (excess receipt) or by-product issue (short receipt).

"In Simple Words, suppose you have sent xx material 100 kgs to subcontractor for processing of 100 yy component. The subcontractor has produced 95 yy by using 100 kgs of xx. That means he has used 5 kgs excess material. But it was not of his fault. It was done on account of die / mould or some other reason.

So you have to post a subsequent adjustment for 5 kgs of xx material and reconcile using J1IFQ for making subcontracting challan complete. Similar case can be understand when subcontractor processes 105 yy using 100 kgs of xx. That means 5 kgs of xx short consumed. These types of adjustment can be known using t-code mb51 and movement type 121."

In the transaction for goods movements MIGO, select the business operation Subsequent Adjustment from the list box. The system automatically chooses Purchase Order as the reference document. Enter the document number of the purchase order and the item number for which you want to post a subsequent adjustment.

So in the case of system, we have to choose the movement type 121 as and as automatically the system chooses the HIDDEN movt type 543 or 544 based on our requirement and itu2019s clear that both the movts 543 & 544 are Hidden movements and we cannot execute those movts.

For the selected item, enter the difference quantity specified by the vendor and determine with the Under consumption/Short Receipt indicator, whether a receipt or an issue is concerned. If you set the indicator, it is an under consumption or short receipt. If you do not set the indicator, it is an excess consumption or excess receipt.

Post the subsequent adjustment.

The specified quantities of the originally posted goods receipt are corrected by the system to the subsequently adjusted quantities.

pherasath

[Former Member]

HI,

The Subcon Process in SAP Purchasing Modules

Subcontracting Processing

When a main BOM item is a subcontract 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 view point, 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 receieved 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 requistion was created by MRP or manually, the item category will be "L".

• BOM items for the main part has been setup to contain all the materials which must be supplied FOC to the vendor.

• There is no need to setup 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 difference 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 palce the cursor on a PO number and display the PO details giving rise to this SC issuing requirement.

Subcontract Posting

Material Document

101 + Receive in the new Material after sub-contract

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

pherasath

[Former Member]

Hi,

Still I have not been able to display 543 movt type when I completed doing GRN using 101.

[Former Member]

Dear,

In the GR line item there have + mark. you expand/Click the + mark then it will open the consumed components.ir

Also you use transaction code MBLB there you can check stock report for Subcontracting.

Regards

Aam

[Former Member]

It can be found in purchase order history,click list icon,select SC Consumption,It will list all 543 material movements of parent material.

[Former Member]

Hi Indraneel,

Above detailed data you can find icons Distribute Qty,Explode BOM,Stock Determ.for all,Non-ordered item, Transport Equipment. Click on Nonórdered item and then check Where tab you can find the Movement type details.

Regards,

MBKM

[Former Member]

Hi,

In the GR line item there have + mark. you expand/Click the + mark then it will open the consumed components.

SAM