Intercompany scenario in manufacturing

[Jelena]

We're in the manufacturing business with several companies in US and Mexico. As we roll out SAP at a Mexico location, we need to prorotype an intercompany scenario. Manufacturing of some of our products is started in the US and is completed in Mexico. We were hoping to use Intercompany functionality, but it seems that it is working only with finished goods. I.e. if we sell one product from US and one product from Mexico then it would work. But we sell one product, it's just manufactured in two locations.

We explored an option to enter 2 materials instead of one (IS and Mexico pieces separately), but this would mess up the reporting, require customer service re-training, etc.

In another company on a different SAP box we use the following process:

- sales order and production order are created in the US company

- subcontracting purchase order is created for Mexico company

- Mexico company creates their own sales order/delivery/invoice and completes their piece

- US company completes their delivery and invoice.

Since in this case US and Mexico companies will be in the same box, we were hoping to avoid implementing the same scenario because it involves many additional documents (POs, SOs, etc.).

Is there any way to utilize Intercompany functionality in our scenario? If not, is there any way to simplify the process described above?

We've done a lot of research and are at the end of our wits right now. Any suggestions would be appreciated.

Thank you.

[former_member184555 · Accepted solution]

Hi

Manufacturing of some of our products is started in the US and is completed in Mexico.

I understand that the manufacturing of the material will be partly done at the mexican plant and the balance will be done at the US plant to get the finished/final product....am I correct?

Mexico company creates their own sales order/delivery/invoice and completes their piece

- US company completes their delivery and invoice.

Is there any activity inbetween the above two steps?

Mexico company creates the SO/DO/Invoice on whom?

Thanks,

Ravi

Edited by: Rob Burbank on Oct 20, 2011 3:18 PM

[Jelena · Accepted solution]

Thank you for a reply. To clarify - Mexico completes the manufacturing process and either ships the finished product back to the US warehouse or to the end customer.

Mexico invoices back to the US company (US company is a customer to them and Mexico company is a vendor for US company). Currently there is no activity in SAP between the two steps mentioned. Both companies simply complete their own document flow.

[former_member184555 · Accepted solution]

Hi

This is just a wild thought about the process to be mapped...

I am thinking about using both Intercompany and Third Party sales processes to map the requirement.

Scenario 1: If the Mexican plant has to make the delivery to customer...the Mexican plant will be selected as the delivering plant in the sales order and the availability check happens as per the lead time required to receive the partially processed material (raw material for Mexican plant) from US and other lead times and the finished goods should be delivered to the customer directly.

Scenario: If the US plant has to make the delivery to customer...the US plant will be selected as the delivering plant in the sales order...a different item category should be determined (like TAS) and a PR should be generated automatically like third party process and the non SD people should take care of getting the finished good from Mexican plant to US plant (sending the semi finished product and getting the finished good).

This can just be an input for your thoughts.

Thanks,

Ravi

[Shiva_Ram · Accepted solution]

Manufacturing of some of our products is started in the US and is completed in Mexico.

But we sell one product, it's just manufactured in two locations.

You have mentioned that a product is produced in US, sent to Mexico for further production involving the US semi produced material. This means it is NOT just cross company sales as US company must account for the semi finished (or raw material) that they send to Mexico in the accounting/inventory books. If my assumption is correct, then I recommend posting this in MM forum also as it looks it may involve cross company sub contracting process.

Regards,

[Jelena · Accepted solution]

Thank you, everyone, for your input.

Shiva Ram, you were spot on. This indeed looks exactly like our scenario. We were too focused on the "intercompany" keyword. Now we have searched for the cross company subcontracting and found many informative posts. Thanks again, you just made my day!