Purpose
The plant has contractual agreement with vendor to manufacture product by providing necessary components. This is called subcontracting process. In some business scenario, subcontracting components are delivered directly to subcontractor from 3rd Party external vendor. The process can be mapped through 3rd party subcontracting process. The document explains on master data setup and planning process of 3rd party subcontracting process.

Overview
During the process of subcontracting, components are delivered directly to subcontractors from 3rd party external vendors. Purchase requisition generated for subreq demand of components can be updated automatically with subcontracting vendor address, so while posting goods with reference to PR for components; stocks are directly inflated to subcontractor location. This document explains on the master data setup and planning process for subcontracting process with direct delivery of components to subcontractors.

3rd party subcontracting process in PPDS

The demand of subcontracting product can be generated through header product or as dependent demand at own location. In APO, to cover demand, Purchase requisition (PR) is generated, through planning run, at own location, towards subcontracting vendor. The PR for subcontracting product creates purchase requisition release at subcontracting vendor for components to subcontractors.

To cover demand, purchase requisition release, at subcontracting location automatic planning run is executed to created planned order. Automatic planning run at subcontracting location is controlled through planning procedure maintained at production master at subcontracting location. At same time PDS maintained at subcontractors explodes and to create subcontractor requisition (subreq) for subcon components.

In 3rd party subcontracting component process, subcontracting component is directly delivered from 3rd party external vendor to subcontractors. During planning run for subcontracting component purchase requisition is created towards 3rd party external vendor. These PR are created with reference scheduling agreement maintained between 3rd party external vendor and own plant. So PR generated for subcon component at subcontractor can be processed at own location, in ECC. In scheduling agreement, delivery address is maintained as subcontractor address, so goods are posted directly subcontractors.

In ECC, PR for subcontracting component transferred from APO, have delivery address as subcontractor, which means goods are delivered directly to subcontractor. Manually, PR is converted to scheduling line, as PR is created with reference to scheduling agreement. Through MIGO, good receipt is done with reference to schedule line. In standard SAP, future date schedule line cannot be posted, either schedule line should be in current or past date.

Once good posting is completed for components, stock for subcon component at subcontracting location is inflated, both in ECC and APO components to subcontractors.

Below process flow explains of 3rd party subcontracting flow.

Master data setup in APO and ECC

Master data in ECC:

Material master for subcontracting product is maintained at own plant with production version.

Subcontracting component is maintained in the BOM for subcontracting product

A workcenter is maintained for operations at subcontracting location.

Vendor master is created for subcontractors and external vendor.

Subcontracting type Purchase info record is maintained for subcontract product between own plant and subcontracting vendor. Production version

maintained in subcontract product material master is assigned in info record, as well.

Scheduling agreement is maintained between own plant and external vendor for subcontracting components. In delivery address tab, maintain subcontracting vendor with check in “SC vendor”. This setting is mandatory to delivery subcon component directly to subcontractor.

Master data in APO:

Master data maintained in ECC are transferred to APO through CIF.

Subcontracting product material master at own plant is transferred to create product master at own plant in APO

Vendor master maintained in ECC is transferred to APO as location with location type 1011 (vendor). If subcontractor supplies to other than own plant, location master needs to be created location type as 1050 (Subcontractor)

Subcontracting info record is transferred to create transportation lane between own plant and subcontractor for subcon product

Transfer production version maintained in material master and purchase info record, creates product location master at subcontracting location for subcon product and component. At same time PDS is also created at subcontracting location for subcon product.

When we transfer subcontracting info record with production version, transportation lane between own plant and subcontracting locations is created in APO. Also transferring scheduling agreement for subcon component, creates transportation lane between external vendor and subcontracting location.

Now there are two transportation lanes for component, which are redundant. Please see attached not OSS note (1902523 – Subcontracting with Third-Party Provision of Components: Redundant transportation lane from plant to subcontractor for part provided) for solution, 1) either we can delete transportation lane between own plant and subcontracting location manually or 2) BADI /SAPAPO/DM_SUBCO_MD method MODIFY_TRPROD to prevent the TL gets created between own plant and subcontracting locations.

Below picture shows the setup of master data in APO and ECC for 3rd party subcontracting process

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