Vendor - Subcontractor - Customer Direct Shipping

[Former Member]

Hi,

Need your expert advises on a small issue. The scenario goes like this

There's a vendor who manufactures the product after the order is placed by us. The vendor then directly ships to a subcontractor for some additional work and once the processing is done, the subcontractor ships directly to our end customer. The goods are not received by us physically at any point of time. We invoice the end customer upon goods receipt.

Could you guys kindly propose a method to track the above process on SAP in accurately keeping stock records to aid accurate invoicing.

Thanks in advance!

[Former Member]

Hi,

You can do it on purchase order using delivery address tab.

But for customer you have to do PGI.

Thanks

Dibyendu Patra

[raviraj_sharma]

Your Scenario has  two parts:

1-  PO for Components ( which are to be shipped directly to the Subcontractor) .

    Here in your PO Line Item, under delivery address tab, you need to  specify  the subcontracting vendor code  and also tick "SC vendor".

At time of MIGO, system will automatically post this to Subcontractors stocks  with  Mvt typ 101-O.

2nd PartL  :  3rd party subcontracting (for the Main Header material) :

This  is  a new functionality  available in Ecc 6.0 EHP5, for which you have to  activate a Business function in LOG_MM_OM_2: Third-Party Order Processing for Subcontracting (New) ( RELNMM_605_LOGMMOM2_DS ).

you can find more info here on http://www.consolut.com/en/s/sap-ides-access/d/s/doc/YP-RELNMM_605_LOGMMOM2_DS  .

You need to activate a business function, and create new Item category assignments in Sales .(Saurav has described the steps  in the above post well)

Please note that in this process,  a Goods receipt (although statistical)  is Mandatory for the consumption of the components at the vendor location.

Note:

There is also  a Document on SDN wiki, by someone who has mapped "direct subcontracting" process  in earlier SAP versions  by configuration alone  :  http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/d0dbde93-6fa4-2c10-edb9-e477fa85b...

[Former Member]

Depends on if you place a PO on the sub-contract vendor or if that element is handled by the first vendor.

If you place a PO on both vendors, then set the sub-contract vendor as the delivery address (item delivery address tab) on the first PO and select the SC vendor tick box.  The second PO is standard sub-contract.

[Former Member]

Thank you for the reply Nick. both PO's should be raised by us. If this is the case can we connect the dots from vendor to customer via subcontractor??

[former_member207541]

What would if be if you would make both PO's as third-party? 🙂 The subcontractor would be your client for a HALB... but it will also be your vendor for the FERT... theoretically, it is possible and everything would be traceable, or not?

Horatiu

[Former Member]

I think so.  You need a BoM for the final component, that specifies the component produced by vendor 1 as a required component.  A Sales Order for end component will then produce a requirement on the sub-contract vendor 2 (which is different to how I stated it originally) and also a requisition (after MRP) to procure the initial component from vendor 1 for direct delivery into stock at SC vendor i.e. at vendor 2.  Provided your lead times are right all falls in place.

You obviously also need your SC BoM etc.

[saurav_sarkar3]

Here's the process flow:

PO 1 to the supplier: Place a normal purchase order for the manufactured goods. In the delivery address tab, mark the SC vendor check box and put in your subcontractor vendor number. When the supplier has shipped goods to the subcontractor, do the GR. On GR of this PO, stock will come to subcontractor stock. Do your Invoice as usual. Process flow complete.

Create a sales order for the final end product to the customer. Use item category TADS (this is available in EHP6). TADS is a combination of third party and subcontracting flows. This sales order will create a subcontracting PR (instead of normal PR). Have you usual subcontracting data/setup ready. The delivery address will be customer address, same as third party.

Convert this subcontracting PR to a PO. We'll call this PO 2. Component stock is already available in you subcontractor stock as a result of GR against PO 1, so PGI is not needed. You can monitor this in ME2O or ME2ON.

When you subcontractor ships the goods to the customer, and sends you a pack list, component consumption advice and invoice, do a GR against PO 2. Its a statistical GR and records the fact that goods have been sent to customer. Do you MIRO to pay off the subcontractor. Subcontracting process flow complete.

Now invoice the customer against the sales order. Sales process complete.

This is a standard way and you have traceability all the way through and at each stage.

Thanks,

Saurav.

[former_member207541]

Hi,

You can use the standard third-party sales scenario, it will partially solve your problem. You will not be able to keep track of the stock & invoicing process between your vendor and its subcontractor, but it could be a starting point to find a way to accuratelly cover the process. If needed, you will find a lot of documentation on the third-party sales scenario - SAP Help or scn, as here

https://scn.sap.com/message/8877098

Kind regards,

H.

[Former Member]

Thank you Horatiu, just to clarify. We pay the subcontractor and the vendor directly. The only relationship between then is the vendor delivering stocks directly to subcontractor bypassing our DC.