SD-3rd Party Warehousing and Transportation

[former_member233130]

Hi all,

i am trying to understand a process which involving 3PL vendor that handles all warehousing and transportation.They take my goods,store in their warehose and via my  notification(delivery note) they transport the goods to the customer.Here i  am really wondering how i am tracking the stocks in my system?Actually there is no goods movement in my location but i have to check and see my inventory.,if i set a normal IM then goods movements will post to FI.In the other hand i need to create a delivery note.i am really confused,i need a help.Please?

Thanks for all Support.

[former_member213836 · Accepted solution]

Hello Ahmet,

This should be a Third Party Sales Scenario:

1. Create a Sales Order for the Customer using Third party Item Category (Item Category TAS). This will generate 3rd party requisition in the  system with Delivery Address of Customer (Item Category S & Account Assignment X)

2. Convert PR to PO (Vendor = 3PL)

3. You can make use  of Confirmation Control Key (Order Acknowledgement) from vendor to confirm the Schedule Lines in the SO

4. You can post  the GR via  shipping Notification.

   This will have following effects

    GR quantity will be posted to Consumption (Stock account will not be updated)

    Offsetting entry will be  posted  to GR/IR clearing

    Consumption will be updated in material master

5. Vendor invoice will be posted against the Third party PO

6. Customer billing cannot happen until Vendor Invoice is posted

Additional information:-

Material  Master: Item category Group (BANS)

Outbound Delivery and PGI not needed for SO

Accounting Modifier (VAX) from Account Assignment Group controls the Consumption Posting Account

Regards,

Niranjan

[former_member233130 · Accepted solution]

Thanks  for your time Niranjan,but it's not an actual 3rd party cuz the goods are mine so it is not BANS.But anyway with NORM items  this process u defined works for me i guess.

Thanks for your contribution.

[former_member213836 · Accepted solution]

Hi Ahmet,

I got your point. I have few  questions though. If this  is  standard scenario why the standard process wont work. Like create SO for 3PL Plant/Sloc, Outbound delivery and PGI? Whats the difference?

If  3PL is not setup as Storage Location you must set it up as Storage Location and do storage location transfer. 3PL can also be setup as plant. In this way you will still own the inventory even tough 3PL is storing them. Let me know if  I am missing anything.

Regards,

Niranjan

[former_member233130 · Accepted solution]

actually that is my question.what would be the difference as it sounds to me so.if there is no difference between my goods in my location and my goods in 3PL location other than PR/PO&GR process,you are rite.Normal so-dn-gi-billing with edi int. with wms works for me.i think GR process should be like u explained and gi  should be done the same as normal sales process.what do you think?

[former_member213836 · Accepted solution]

By the way are you manufacturing the goods or buying from another vendor?

Regards,

Niranjan

[former_member233130 · Accepted solution]

i am transfering them from one of my plant which is also mine.3PL takes them and stores them in its place.

[former_member213836 · Accepted solution]

This should be standard process. You should not post GR to consumption since this will clear the Inventory from System. You will need Inventory for PGI against delivery. As suggested by TW this should be a standard Sales Process where 3PL is just another Plant/Storage location.

Regards,

Niranjan

[former_member233130 · Accepted solution]

Thanks man.one last thing;isn't that a good idea to create PR/PO from so item,then gr just to close PO,not gonna increase the stock,customer billing(normal sales),then 3pl IR against the PO?this is not sounding like this process made me a little confused,rite?:)

[former_member213836 · Accepted solution]

Standard PR/PO can be created only when we are buying the inventory from external vendor. Since you already  have  the inventory in the Plant (i.e Stock Accounts) there is no need to create the PR/PO.

You may create a stock transfer requisitions from SO if you would like to trigger  the movement between Plant and 3PL based on Sales  Order. Goods Receipt for STO will then move stock from your plant to 3PL.  You can use that stock for SO PGI against delivery.

Regards,

Niranjan

[former_member233130 · Accepted solution]

Hmm ok but one last doubt here for me if u dont mind.

i m not gonna have transportation so how can i integrate vendor IR in this process whereas i cannot have po here?

[former_member213836 · Accepted solution]

Can you tell me the complete (Physical) process steps for your Sales Order Cycle including Inventory Movements between Plants & 3PL. I need to know where IR is coming into picture. If you are procuring anything from vendor include that too. Also let   me know which of these Process Steps involves SAP Transaction and which does not.

[former_member233130 · Accepted solution]

okey.i have my goods in 3PL warehouse.

SO-DN-GI-3PL Transportation-Billing(automatic PO/IR is out as u said so)

After billing the customer,vendor sends its invoice for that shipment and receives payment.

Thanks.

[former_member213836 · Accepted solution]

When you say vendor is that 3PL? Also, the invoice is for shipping and transportation cost incurred by 3PL right?

[former_member233130 · Accepted solution]

Oh yes,sure.

[former_member213836 · Accepted solution]

Here are few good documents containing details of how to handle Freight & Shipment Charges in Sales

Regards,

Niranjan

[former_member233130 · Accepted solution]

Thanks for your interest Niranjan.That helped.

[Former Member]

Hi

I'm a little confused. Are you saying that you do not have any inventory in SAP at all ?

As the stock belongs to your organisation and not the 3PL provider and as such, should be on your SAP system.

Cheers

A

[former_member233130]

Hi,

stocks belong to me but stored in a 3PL warehouse and delivers directly to the customer with my notification.i am saying that this is not a normal sales scenario which i deliver to the customer from my warehouse.So i am thinking that there should be some differencies in GI process or item category deffinition or in material master,wherever.

regards

[Dilli]

Hi Ahmet,

Though this can be treated as a standard Sales process, you should create your 3PL as one of the plant in your SAP system. The system still requires inventory transactions to be processed from this plant ( Both Inwards and Outwards ). Your planning system should be intelligent enough to categorize these as Virtual plants and assign it to the Sales order based on business rules.

Hope this helps.

Regards,

Dilli

[former_member233130]

Thanks a lot Dilli.

[former_member182378]

ahmet,

This is a common scenario. Many manufacturers will outsource their 3PL (warehousing and transportation) activities.

In SAP the manufacturer will create sales order and delivery. The inventory will be maintained in SAP, plant and storage location.

1. delivery information from manufacturer to 3PL :

Once the delivery is created, via interface this information will be sent to the 3PL system. They will do the 3PL activities, once the truck has left the warehouse.

2. pick, pgi information from 3PL to manufacturer:

An interface will send information with picking and PGI. When this inbound to SAP message is processed, the delivery will be picked and PGI. The inventory will be reduced accordingly.

After delivery process is over, then the next step i.e. invoicing will take place like it generally does. It can be done manually by VF04 or automated by setting up a daily (night) job.

TW

[former_member233130]

Thanks for the answer.

due to not doing inventory management in my location,it sounds me like there should be something different in GR and GI processes like accounts and account assignment categories  also.i mean,to me everyhing should not be the same as normal otc scenario.So you 're saying it should be designed like normal sales scenario with 3pl wms-sap edi integration?

thanks again

[former_member182378]

ahmet,

Your company is taking the order from the customer and then delivering the products to it. The only difference is that you are not doing the 3PL activities, you have a vendor for it.

It is a normal sales process.

The delivery will be created in SAP.

And based on the 3PL's information, the picking and PGI will be completed for that delivery.

You need to maintain inventory in SAP, even though the inventory is in the 3PL warehouse. By keeping inventory in SAP, your company will know how much is there and promise to customers accordingly. To identify if the inventory is in one of your own warehouses or in the 3PL warehouse, you can created different plants in SAP.

TW

[former_member233130]

Thanks TW for your contribution.

that helped me indeed.