Issuing material to Service order contractor and tracking it

[Former Member]

Hi Experts,

We are creating service activity PR, PO, Service acceptance as per standard SAP. We would like to issue materials to this contractor on free of cost and he would return balance material, if any.

We can reserve material for this activity and goods issue against this reservation (using movement type 221). But this material will be consumed in project.

Is there any solution for this?

Regards,

RSVRMurthy.

[kalpesh_agrawal · Accepted solution]

Hi Murthy,

There are two scenerios.

1) If you want to issue the material to contractor and this issue is not mean the consumptionm, then you can create a storage location for that contractor / seperate WBS for that contrator and transfer the stock to that storage lcoatjon / WBS. Then when it is consumed by contractor you can issue it to WBS / reservation

2) If you want to issue the material to contractor and this issue is to be treated as consumptionm, then you can issue it to directly to new storage location reservation / WBS as above

Regards,

Kalpesh

[Former Member · Accepted solution]

Hi Kalpesh,

Thank you for your reply.

I would like to explain in detail our scenar

We have Mechanical, Electrical, Instrumentation etc departments and under each dept., there'll be many service activities with different contractors.

We issue materials to contractors on free of cost but this cost should come on project. For example, if we issue 1000 meters of cable to contractor for laying in control room and if he would complete the work with 800 meters he'll return 200 meters to ware house. So, cost of 800 meters cable should come on project (respective WBS element/activity). We issue different materials to various contractors like this. How to track these materials? Can we map this in PS?

[Former Member · Accepted solution]

Hi Murthy,

From the scenario explaination I believe you make a common procurement for the project and provide it to the service executed by various departments such Electrical Instrumentation etc.

In that case create a Procurement WBS element in your project structure along with the mechanical,electrical instrumentation WBS structure.Make all project related procurements under this procurement WBS element by attaching material through dummy Internal activities(as you cannot attach material directly to WBSE).

Your department WBS element will have all the subcontractor service activities.When you want issue the material to a particular subcontractor activity,make a stock transfer from Procurement WBS element to the WBS element to which the service activity is attached(in your case 1000 M).Till now it will be in the inventory.When the subcontractor provides you the actual consumption data, make a goods issue to that service activity(in your case 800M).

In this way you can track the

1)total procurement of cable

2)Cable lying with each subcontractor

3) actual cable consumption by subcontractor

4)actual material cost realising against the actual execution activity.

But there are some points to be noted,

Hope you will be following Project stock concept, with procurement type being Res+PR for WBS.In this case the reservation will be in the internal activity under with Material(Cable) is attached.That is in the procurement WBSE.So while closing the project you have to clear those open reservation.You have option for clearing open reservations while confirming.As I mentioned earlier the internal activities are dummy, you should have a control key with cost irrelevant.

One more point to note, while issuing the material to the service activity, you have to make a manual issue as there wont be any reservation against this service activity(that is you cannot adopt details of the reservation).

regards

[Former Member · Accepted solution]

Hi Ravi Kumhar,

Thank you for your reply.

We would like to reserve material for that service activity for subcontractor, if material is availabe in stores else we'll procure (reservation for network or P.req + reservation for WBSE).

"while issuing the material to the service activity, you have to make a manual issue as there wont be any reservation against this service activity(that is you cannot adopt details of the reservation)" - this is your suggestion.

This above option is not our requirement.

Can we do like this? .............We'll do stock transfer from stores to project stock (movement type - 412Q) and we'll issue material to that activity for that reservation (MIGO/mb1a). Then, balance material if any we'll return to stores (movement type - 411Q).

Our requirement is the cost of the material should come on project and tracking of materials issued to different subcontractors/sercvice orders.

Please guide us.

Thanks & Regards,

RSVRMurthy.

[former_member203098 · Accepted solution]

if you want only cost of the material consumed against the project then you can do as you said.

regards,

[Former Member · Accepted solution]

Hi,

What I understand that the scenario you have mentioned is mix of subcontracting and service procurement. I would suggest you to use following steps, check if it is feasible for you:

1) Create first line item as Service item in the Purchase Order

2) Create second line item as subcontracting; in this item ytou cna use a dummy material or text material and mark it as 'free'(without any price). Insert all the components you intend to supply to the subcontractor in the components list of subcontracting PO line item. The items inserted in components list will create reservations relevant for MRP.

3) Buy the component items and send the components stock to the the subcontractor.

3) When the service is recieved, do service entry for first line item and GR for second line item(which will consume the stock supplied to subcontractor).

In above way, you can have subcontracting and service procurement in the same Purchase order.

Regards,

Mahendra

[Former Member · Accepted solution]

Hi Mahendra,

Thank you for your advice. We'll try this.

Regards,

Murthy.

[former_member203108]

If the materials are free issue materials, then i believe all those materials will be non-valuated. in that case, why do you worry about consumption? Issue the materials to the activity and whenever your vendor returns the balance material then do return delivery in MIGO, the material will be moved from activity to stock. search the forum you will find a thread where praveen speaks about return delivery.

[ashutosh_saraf]

Hi Murthy,

As per SAP standard practice , we can create internal order and capture material against it.So that we can track the material issued to particular sub contractor.Once maerial is issued to subcontractor then material is consumed, this is the standard practice.If you want to track in detail then issue material in multiple interval so as to evaluate consumption of materials.

Regards

Ashutosh