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Reverse Subcontracting of customer with Reciving of partial RW


My client is doing job work for customer. Customer sends the Raw material with respect to job work sales order.In some situation RW is not enough then my client use own RW material and Bill to customer for RW as well as Job charges.

I am stucking if customer send me partial material only.How to use own material to that particular production order and how to bill to customer.

Please help me.



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  • author's profile photo Former Member
    Former Member
    Posted on Jan 06, 2014 at 05:49 AM


    your own RM and customer RM mast have two material codes or valuation type, then according to production material consume quantity report to create sales order and bill customer manually.

    With best regards


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  • Posted on Jan 06, 2014 at 05:10 AM


    Billing some material to customer is something we all know. If there are two materials you can bill them or if there are two materials at two different stages then again you can bill them to customer using standard sales process. I guess your question is more related to production that how to charge materials to production order. Right? For this you can ask any PP guy or in Production forum in SCN.

    If I didn't get your requirement then you can explain a little more.


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    • Hi Lucky

      What scenario is it? Make to stock or make to order? I believe when we issue raw material to production order it becomes part of cost for this finished Goods and we don't bill raw material to customer separately. We bill finished good to customer.

      In your case if you are billing raw material to customer what is business requirement and logic behind that? Do you have some PP guy with you? You can take help from him and see how they are consuming raw material and how they can help you to differentiate between your own material and customer's provided materials.


  • Posted on Jan 06, 2014 at 07:46 AM

    Hi Lucky,

    Kent is going in the right direction here. You need to have two different Materials with different Valuation Types here - One for the Client's Customer and one for Client's own.

    Your client material would have a Finished Goods Valuation Type and regular Standard or Moving Average Cost where as the Customer Client would have a Zero Standard or Moving Average Cost.

    Assuming that you are only interested in the scenarios where your Client is directly using his Raw Material and not his Customer's Material you can do think of the following process.

    I am sorry it has been a while and I do not know the full details of the process. I had similar requirements and with the help of PP here is what we did as a solution:

    1) To Trigger the PP Process, use SOP[Sales & Operations Planning] where you enter the Planned Raw Material Usage for the Prod. Order. I think you create a Planned Order and then convert that to Production Order;

    2) Go through the regular Production Order Process and once the process is complete you would have the Material moved to Finished Goods stock

    3) Create a Sales Order for these goods as a regular Sales Order Process. You need to have no MRP for this so that there are no ATP Issues. Use the Material Code which is for the Client Own Material here.

    You can maintain the Selling Price of the Material like a regular Finished Goods in SD and Bill the Customer.

    I would advice to create a New Order Type for easy tracking. The same order type can also be used the scenario where the Raw Material is Client's Customer one.

    The charges for the job can be a separate condition type in the same line item price to distinguish between the Base Price and Job Work Charges.

    You should get the help of PP folks for sure.

    What we had as a solution was not perfect but was pretty effective.

    Is your Client a Process Industry Client where he is taking a Raw Material A and converting it to Finished Goods Material B ??

    Tell me if you need any more inputs.


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