Third party- Subcontracting using SC Vendor concept

  

Introduction

The following scenario can be used where the third party supplier need to get the semi-finished material from a subcontractor –> assemble/configure again and then deliver it to the customer directly.

Master data – For Example

 

Master Data

Value

Comments

Material

Computer

Finished material

Material

Monitor

Semi- finished material

Material

RAW12

Raw material

Vendor

VENDOR

Third party Vendor

Vendor

SC_VENDOR

Subcontracting vendor

Customer

Z06_CUST

BOM

BOM – COMPUTER

Component – Monitor

BOM1

BOM

BOM – Monitor

Component – RAW12

BOM2

Info Record

Info record created for Computer-
  Vendor combination

Configuration Steps :

Customizations required at Sales and Distribution :-

For the Item category group ERLA , the system shows price for the BOM item but not for components.

For this following customizing setting is required.

  

– The item category of BOM item is TAQ, which is relevant for pricing, so the BOM is priced.

– The item category of components is TAE which is not relevant for pricing, so the components are not priced.

1.   Check item categories.

In Customizing for Sales and Distribution choose Sales –> Sales Documents –> Sales Document Item –> Define Item Categories.

Example: Item category

 

Item Category

 

 

Description

 

 

Comments

 

 

TAQ

 

 

Item category of BOM item

 

 

Relevant for pricing, so the BOM is priced

 

 

TAE

 

 

Item category of components

 

 

Not relevant for pricing, so the components are not priced.

 

TAQ.png

/wp-content/uploads/2013/12/tae_346083.png

2. Check whether item category group to be maintained in Material master is created

For the BOM item/Finished material maintain the item category group as ERLA .

In Customizing for Sales and Distribution choose Sales –> Sales Documents –> Sales Document Item –> Define Item Category Group

ItemcategoryGroup.png

3.Check whether the item categories are assigned to sales order type.

In Customizing for Sales and Distribution choose Sales –> Sales Documents –> Sales Document Item –> Assign Item Categories

Assignitemcategory.png

4. Define Schedule Lines

In Customizing for Sales and Distribution choose Sales ® Sales Documents ® Schedule Lines ® Define Schedule Line Categories

ScheduleLines.png

Inorder to create the purchase requistion, maintain the Order type, item category and account assignment.

The mapping of item category (from 3 to L) can be found in IMG:  MM->Purchasing->Define External Representation of item categories.

ItemcategoriesMM.png

The definition of account assignment category can be found in IMG: MM->Purchasing->Account assignment->Maintain account assignment categories

5. Assign the Schedule lines to the item category

In Customizing for Sales and Distribution choose Sales –> Sales Documents –> Schedule Lines –> Assign Schedule Line Categories

Assignschedulelines.png

Configurations to be maintained in Material Master

1.Go to MM02 –> Enter the finished material ( COMPUTER ) –>Choose the sales org.2 View –> enter the organisational data –> Maintain the item category as ERLA.

2. While creating Bill of Material , maintain the BOM usage as 5 ( Sales and Distribution ).

Process

1. Create third party sales order via tcode VA01

  Note down the Purchase requisition number from schedule line
tab from sales order ( VA03 )

SalesOrder.png

Go to item details of the BOM material ( COMPUTER ), check the schedule line category.

By Default , schedule line CP will be maintained change it to ZN.

2. Create Purchase order for the product/finished material COMPUTER

Purchase Order can be created via

  • Convert Purchase Requisition to Purchase Order ( ME59N )
  • Create Purchase Order with repect to Purchase Requistion ( ME21N )

POwrtPR.png

3.SC Stock Monitoring for VENDOR via ME2O

Monitor the material/Component MONITOR which is transferred to the third party vendor VENDOR

MONITOR1.png

4. Create a Purchase Order for the Sub-component MONITER via ME21N

  

  • As the material MONITER needed to be configured/assembled
    by the subcontracting vendor SC_VENDOR and to be delivered at third party
    vendor VENDOR, Create a subcontracting PO for the material/component MONITER.
  • Note :- Go to Item details –> Delivery address –> Enter Vendor
    and check mark the indicator SC Vendor

PO_SCVENDOR.png

5. SC Stock Monitoring for SC_VENDOR via ME2O

Monitor the raw material/component RAW12 at SC_VENDOR

ME2O_RAW12.png

6.Create Transfer Posting w.r.t Purchase Order via MIGO (A08/R01) Mvt Type 541

Do a transfer posting for the subcontracting Purchase Order to transfer the component RAW12 to SC_VENDOR

TransferPosting541.png

7. SC Stock Monitoring for SC_VENDOR via ME2O

Monitor the component RAW12, now it’s available at SC_VENDOR

ME2O_RAW12_1.png

8. Post Goods Receipt for Purchase order with sub-components

Now the Semi-finished material MONITER is assembled and need to be transferred to the third-party vendor VENDOR.

Material MONITER will be posted against 101 mvt.type and component RAW12 will posted against 543 mvt.type with Special
indicator O (GI issue subc. Stock).

Semi-finished material MONITER will be delivered at third-party vendor VENDOR.

MONITER_101_vendor.png

9. SC Stock Monitoring for VENDOR via ME2O

    In ME2O , Component/material MONITER is now at third-party VENDOR’s stock

There will not be any stock under the subcontracting vendor SC_VENDOR as its moved to VENDOR

ME2O_MONITER.png

10. Post Goods Receipt for Purchase order with finished material

  Once the material/product computer is manufactured/assembled using the component MONITER, Post a Goods receipt ( 101) for Third
party PO.

GR_FINISHED.png

From MM side, Invoice can be created for the two Purchase orders created.

From SD side , Billing document can be created for third-party sales order.

Regards,

Sheetal

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24 Comments

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  1. Jürgen L

    unfortunately not more than an end-user documentation. There is a lot room for improvement.  As we are a professional forum I expect some info about customizing which may be needed to achieve this process. e.g. it could be explained what the difference is between the item categories TAQ and TAE in the sales order (remember we are MM here and have less SD knowledge) What do they control?

    What has to be done to get item category L with account category X in the purchase order, and why is it X?

    And from a process point of view, how do you create the paperwork for the delivery from Subcontractor A to third-party vendor?

    (0) 
    1. Sheetal Premnath Post author

      Hi Jurgen,

      Thanks a lot for your valuable feedback.

      This is my first document.

      As suggested by you, I have updated the document with the customizations involved in this process.

      Regarding the paper work for the delivery from subcontractor to a third party vendor, I will get back to you soon.

      Thanks & Regards,

      Sheetal

      (0) 
  2. manu m

    HI Sheetal,

    Thank you for sharing – good effort.

    If possible show the accounting entries where ever it hits and if further  possible – give some more scenarios  .

    very good doc.

    regards

    manu

    (0) 
  3. Nitin U Kaple

    very good doc Sheetal

    I have doubts here normally in third party PR is creating when we create SO from schedule line category, Are PRs creating here automatically for item category TAQ and TAE?

    Thanks

    Nitin

    (0) 
    1. Sheetal Premnath Post author

      Hi Nitin,

      Thanks a lot.

      Even in this process, the third party PR is created at schedul line category ie only one PR is created.

      Regards,

      Sheetal

      (0) 

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