Sub-contracting for the Customer

[Former Member]

Friends,

Here is one scenario where I need your suggestions

Scenario

Client A is subcontractor for their customer B

B receives 10 Components from A along with a subcontracting order from B to assemble material X (consisting of the 10 components supplied by Customer).

Part Number of the 10 components are also used by B for their other finished products which are sold against Customer Purchase Orders. This means they are Quantity and Value managed material. They are valuated material for them

Q1. How does B receive 10 components from A (T Code and movement type)

Q2. How do we prevent valuation of these 10 components in my plant. (Because the same part numbers are used by me and valuated in my plant)

Q3. Is there any implication if I include them in the BOM and the cost roll will not include the cost of those 10 components.

Thanks in advance for your response.

[Former Member]

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 be created for the material(2) calling for material(1)

4. Info record 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.

Q1. How does B receive 10 components from A (T Code and movement type)

see above

Q2. How do we prevent valuation of these 10 components in my plant. (Because the same part numbers are used by me and valuated in my plant)

Use split valuation so for sub contracting compenent will be one valuation and other component is other value

Q3. Is there any implication if I include them in the BOM and the cost roll will not include the cost of those 10 components.

No, costing is depend how you do costing

[Former Member]

Thanks Charlie for the support.

You mean to say that split valuation is the only way to receive the goods for assembly and return to customer ? Will there be any FI related complications for this ?

Also receiving the goods are done with 501 movement in MIGO ?.

Regards

[Former Member]

Hi

Split valuation is concept used inorder to differentiate good with respect to procurement etcc.. so it is nothing to do with FI complications.

Finished goods are recived using tcode - migo and 101 movement type .

501 is used to recive goods with our purchase order.since you are creating purchase order for finished product therefore use movement type 101 with tcode -migo

hope it solves

[Former Member]

Thanks, that is a good info.

But my requirement to receive components supplied by customer alongwith the subcontracting order raised by the customer. Here I am the subcontractor and I need to receive the goods and they should be non-valuated and I also have same Part number in my stock (for my own Finished goods manufacture) and Only the customer supplied components for assembly and return should not be valuated.

I would like to know if there is any other method other than going for split valuation and if YES what is the movement type and transaction.

Regards,

[Former Member]

Have you find any solution to your problem?