MRP Type for Subcontract Material

[Former Member]

Dear All,

I want to create a Material 'A' which has 7 BOM . But this 'A' need to be subcontracted to a Vendor and supply him the BOM for Assembly. And, he need to supply back in 7 days from the date of receipt of goods.

1. How to create the material FERT/HALB..Do I need to maintain Purchasing Screen.

2.What would be my MRP Type in MRP-1

3.Strategy Group (if required) in MRP-3 . Since this material is sub-component of ''Z'..

4.When a MRP is run at 'Z' there should be a Automatic PO to Subcontactor along with its BOM issue.

How do I configure this

Your suggestions have been very very valuable ..please provide a solution for this question also. I tried to search the Forum, but could not find a suitable solution.

Thank you in advance,

Ravi

Edited by: Ravi Prasad on Sep 19, 2008 7:24 PM

Edited by: Ravi Prasad on Sep 19, 2008 7:29 PM

Edited by: Ravi Prasad on Sep 19, 2008 7:37 PM

[Former Member · Accepted solution]

1. How to create the material FERT/HALB..Do I need to maintain Purchasing Screen.

Either FERT or HALB (if this is the final product than FERT otherwise HALB)

2.What would be my MRP Type in MRP-1

you can put PD ( you need special procurement key in MRP 2 view for this material as Subcontracting.

so when ever you run the Z material mrp that time system will generate the sub ocntracting req for this material

3.Strategy Group (if required) in MRP-3 . Since this material is sub-component of ''Z'..

no need

4.When a MRP is run at 'Z' there should be a Automatic PO to Subcontactor along with its BOM issue.

It will create the sub contraction PR then you can convert in the PO and based on the BOM it will add the component to the PO.

Sub Contracting Cycle

(1) You have a material that can be procured externally, and you have maintained BOM with components. Any waste generated and received during subcontracting process can be maintained as component with negative quantity.

(2) You create a subcontracting PO (PO with Item Category L). You can also maintain Purchase Info Record for Subcontract category for material and subcontractor.

(3) You make a transfer posting to issue components for SC PO. Material is sent to subcontractor. As material remains under your ownership, system does not make any value entry. But quantity is shown as "Material Provided to Vendor"

(4) You receive finished material against SC-PO. You also specify components consumed in manufacturing of finished goods. Additionally, if you have negative components in BOM, now you'll also receive subcontracting by-products. There are three events, so three accounting entries are generated:

DR FG Stock/ SC By-Product Stock

CR Change in Stock (FG/ SC By-Product )

(for finished goods received)

DR Subcontracting Charges

CR GR/IR Clg

(for moneys payable to Subcontractor)

DR Consumption (Components)

CR Change in Stock (FG/ SC By-Product )

(material provided to Vendor is now charged to expense)

(5) You do the IV for SC Invoice, and the process is complete.

Process of Subcontract in MM

Sub-contract business process:

You want to buy material from the supplier (processed material/ assembled item) , but for some reason (quality of certain item / price ) you will give some component to vendor .

Vendor shall process the item / use the item provided & supply the final item.

SAP process:

1.Create the finished goods material code.

2.Maintain the BOM for the material.

3.Create PO with item category as "L" .

4.Issue material to vendor with movement type 541

5.Receive the material against the PO with movement type 101.

6.MIRO to account for vendor's invoice for the service charge& material used by him.

Note:: At the Time of GR 543 Mvt is up dated for Raw Material.

Can anybody tell me how a process has to be given to subcontracting?

Suppose, I have 3 operations 1)weaving 2)dyeing 3)cutting & packing

if no 2 process (i.e Dyeing) has to be given to subcontracting, what process should i follow ?

The following process to be followed for subcontracting.

1. Item code(material master) to be created at the stage of before dyeing.

2. Item code(material master) to be created after Dyeing as subcontracted item.(F30)

3. Bill of material to becreated for the material(2) calling for material(1)

4. Inforecord and source list to be created for material(2) with the corresponding vendor

5. PO to be released for material (2)

6.Along with PO the material(1) to be issued to vendor

7.On receipt of material when GR is made the stock with vendor will get updated.

How to Create a Subcontract Order?

To create a subcontract order, proceed as follows:

Enter the material you want to order and the item category for subcontracting (L) in the order item.

Press ENTER to display the screen for component processing.

Enter the components that the vendor requires to manufacture the product.

Please note:

u2013 You do not need to enter the date required for the components. This date is proposed by the system when you press ENTER.

It is calculated as follows:

Delivery date of the item - Planned delivery time

u2013 If you do not want the quantity of the components to be changed if the order quantity of the end product is altered, set the indicator Fixed quantity (column F).

u2013 You can determine whether the components are available on the date required by selecting Edit -> Availability check.

If you entered a bill of material as the material in the subcontract order, the components are created automatically.

If you want to determine the components in the bill of material at a later date (for example, if the bill of material is subsequently changed), choose Item -> Component -> New BOM explosion. The existing components are deleted and redetermined in the bill of material.

Save the purchase order.

[Former Member · Accepted solution]

Dear Chalie,

Many Many Thanks to you. Problem Solved.

With Regards,

Ravi