Contracts

(1) You have a material that can be procured externally, and you have maintained BOM with components. Any waste generated and received during subcontracting process can be maintained as component with negative quantity.

(2) You create a subcontracting PO (PO with Item Category L). You can also maintain Purchase Info Record for Subcontract category for material and subcontractor.

(3) You make a transfer posting to issue components for SC PO. Material is sent to subcontractor. As material remains under your ownership, system does not make any value entry. But quantity is shown as "Material Provided to Vendor"

(4) You receive finished material against SC-PO. You also specify components consumed in manufacturing of finished goods. Additionally, if you have negative components in BOM, now you'll also receive subcontracting by-products. There are three events, so three accounting entries are generated:

DR FG Stock/ SC By-Product Stock

CR Change in Stock (FG/ SC By-Product )

(for finished goods received)

DR Subcontracting Charges

CR GR/IR Clg

(for moneys payable to Subcontractor)

DR Consumption (Components)

CR Change in Stock (FG/ SC By-Product )

(material provided to Vendor is now charged to expense)

(5) You do the IV for SC Invoice, and the process is complete.

Process of Subcontract in MM

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.

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 becreated for the material(2) calling for material(1)

4. Inforecord 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:

– 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

– 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).

– 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.

When you print the purchase order, the components are printed per order item.

====

Reward if USeful

Thanx & regards

Naren..

Former Member · ‎09-17-2007

Hi

Refer below

Details about contracts:

Lets take standard CQ contract type:

First maintain customer - material info record in VD51 T-code

Secondly maintain pricing for customer / material or only material combination in VK31 / VK11 T-code

Then use VA41 T-code to create a contract

VA42 to change contract

VA43 to display / view contract

In VA41, enter the document type CQ, followed by the sales area details,

Enter Sold to party.

Enter PO number

Enter PO Date

Enter Validitiy from Date

Enter Validity to Date

Enter Material

Enter Quantity say 999,999,999 or any other higher quantity as it is referred again and again

Hit Enter.

Save.

For further info refer below

Message was edited by:

SHESAGIRI.G

sailaja_vadlamudi · ‎09-17-2007

Hi ,

Contract

In the MM Purchasing component, a contract is a type of outline purchase agreement against which release orders (releases) can be issued for agreed materials or services as and when required during a certain overall time-frame. (In the literature and in practice, similar concepts may also be referred to by a number of other terms, such as "systems contract", "blanket order agreement", "blanket contract", and "period contract".)

The contract consists of items defining the individual materials, material groups, or services with prices and in many cases quantities.

An item is assigned to an item category, which defines the type of procurement (e.g. item category K for consignment, or L for subcontracting).

An item of the procurement type "external service" contains a set of service specifications. Such specifications may be hierarchically structured. The summary view of such a hierarchical structure is termed an "outline", and the individual levels of the hierarchy are referred to as "outline levels". Quantities are specified in service lines. Services can be released (ordered, or called off against the contract) at item level or at the level of the service line.

Costs can be apportioned among various Controlling objects via the account assignment.

Release orders issued against the contract (see below) are logged in the release documentation.

Contracts can take the following forms:

Quantity contracts

Use this type of contract if the total quantity to be ordered during the validity period of the contract is known in advance. The contract is regarded as fulfilled when release orders totaling a given quantity have been issued.

Value contracts

Use this type of contract if the total value of all release orders issued against the contract is not to exceed a certain predefined value. The contract is regarded as fulfilled when release orders totaling a given value have been issued.

You can also set up corporate buying contracts with your vendors. These are valid for all plants and company codes within a client (see Centrally Agreed Contract).

Over the contract validity period, certain quantities of the materials or services covered are released (called off) against the contract as and when required through the issue of purchase orders referencing the latter. Such purchase orders are thus termed "contract release orders" or simply "release orders". (Outside SAP, particularly in the UK; they may also be referred to as "call-off orders".)

Sail

Former Member · ‎09-17-2007

Hi Rani,

Pl go through below link:

http://help.sap.com/saphelp_47x200/helpdata/en/06/57683801b5c412e10000009b38f842/frameset.htm

Master Contract:

The master contract is a document under which you can group contracts as lower level contracts. It contains the general terms which apply for all the lower level contracts over a specified period.

Use

You group contracts as lower level contracts under a master contract to ensure that

The terms in the master contract are granted in all the lower level contracts

The data in all lower level contracts remains consistent

You can group the following documents under a master contract:

Quantity contracts

Value contracts

Service contracts

The link between the master and lower level contracts is controlled by the referencing procedure which is assigned to the master contract type in Customizing. The referencing procedure determines which data is copied from the master contract into the lower level contracts

Structure

A master contract contains header data only. In the master contract, you can record:

Business data

Partner data

Contract data

Billing plan data

On the overview screen of the master contract, there is a list of all the lower level contracts which refer to it. You can branch from this list into the individual contracts.

--

Master Contract: The master contract is a document under which you can group contracts as lower level contracts. It contains the general terms which apply for all the lower level contracts over a specified period.

Check these links on Master Contract

http://help.sap.com/saphelp_47x200/helpdata/en/dd/55fd0d545a11d1a7020000e829fd11/frameset.htm

http://help.sap.com/saphelp_47x200/helpdata/en/dd/55fd34545a11d1a7020000e829fd11/content.htm

http://help.sap.com/saphelp_47x200/helpdata/en/dd/55fd27545a11d1a7020000e829fd11/content.htm

Please Reward if Really Helpful,

Thanks and Regards,

Sateesh.Kandula

Contracts

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