sub-contract sales

[Former Member]

hello, friends.

company A issues a PO to us and sends us a component. we receive the component under consignment. we issue a sales order and start work.

the finished goods uses up the component. we deliver only the finished goods to the customer company A.

my question:

1. in SD, what sales order type do we use?

2. what item category group and item category should the finished good have?

3. any special set up we need to do?

many thanks.

regards.

[Lakshmipathi · Accepted solution]

Dear Jonathan

My company is having a typical scenario and let me try to explain the process.

Customer A who places the order will supply one component (let us say x1) on FOC basis and we need to assemble the same in our final product (let us say ABC) which we are selling to him.

We are maintaining the x1 component as ROH with material value as INR 0.01 and assigned to the respective FERT in CS01. While doing MIGO, we are manually changing excise duty value (equivalent to 16% of assessable value) and while doing MIRO, the invoice price would be excluding the component price whereas, excise components are calculated including the component price.

As regards item category for fert, you can retain as NORM. Whenever production entry is made through MFBF, the stock of x1 will reduce.

For selling price of ABC, we are maintaining a seperate condition for assessable value towards the landed cost of the component received from customer A, for excise duty apart from the unit price. So the net value would be PR00 plus assessable value for which we would be paying excise duty @ 16%.

Thanks

G. Lakshmipathi

[Former Member]

Hi John,

Interesting scenario to discuss...but few things that comes to my minds are...

1. when u say that u receive component from customer as consignment....should i assume then that during this u r treating customer as vendor and its vendor consignment

2. Ur scenario suggest that u issue the components to get the finished product....that means its 'kind' of manufacturing finished good using row material ....then how u r doing this...r u using Production order? and if production order then r creating this production order explicitly (without refer to sales order)?

3. U will also have to consume components from consignment....how u r doing this...through MB1A...may be 261...?

becoz what i feel is, from taking component to consuming component...if ur sales order doesnt come into picture then i guess it should be standard sale...one more thing whether ur finished goods will be special sales order stock?

I know more then answering iam asking question...but considering scenario..i got all these question....may be other expert have proper light on this

Regards

Jagdish

[Former Member]

hello, jagdish.

perhaps i need to correct some earlier statements. the component is sent by the customer to us when he orders a finished good from us. the intention is for us to use this component to assemble the finished good. whether this component comes in as consigned stock or other designation will depend on what is more practical.

and, yes, the sales order leads to production order. and the finished goods is issued to sales order stock.

i am trying to see if there are any special expectations from the SD consultant. right now i also see that the sales transactions will be pretty standard.

however, will appreciate your valued comments.