Issue in Subcontracting Process

[Former Member]

Hello All,

     I have doubt in Subcontracting process, here we have two child parts for a semi finished material. "child part A" is procured by us and issued to vendor, But "Child part B" is procured by the vendor itself.

     When doing GR both the child parts A and B are appearing, as we have both the child parts in BOM. And as we have not issued the "chil part B", so the stock it is zero with the vendor, as indicated in MBLB and ME2O. Due to this, I am getting this error "Deficit of stock W. vendor unr . 256000 PC XXXXXXXXX XXXX 0"

Kindly help me out to proceed further.

Regards,

Manoj

[shyam_shinde2 · Accepted solution]

Hi Manoj,

Goto to item detail tab in Parent BOM (CS02) and update indicator part provided by vendor,after updating this such item will not appearing during good issue.

Regards,

Shyam

[Prasoon]

Hi,

   I would suggest you to create a separate PO / line item for the component for the vendor with the required BOM qty. In item level - delivery tab, maintain the vendor name as well as "sc vendor" indicator. Maintain the price in PO if the vendor is charging it separately or maintain it as "free" item.

    Now, do GR for the PO before GR of the subcontract PO. The movement type will be automatically 101 O  , so that the goods will be posted to subcontractor stock. After GR, if you check the stock of component B, it will be shown as "stock provided to vendor".

    After that, do GR for the subcontract PO and proceed as in normal case.

Regards,

AKPT

[Former Member]

Hello All,

I created PO with SC vendor. what are the next process i need to follow.

Process followed:

• Created separate PO only with the "child part B" (which vendor had procured)
• With standard item category and blank Account assignment.
• In item level - delivery tab, maintain the vendor code as well as "sc vendor" indicator
• And gave the Quantity.
• while doing MIGO which movement type should i use. is it 101

How the material cost of child part B will be taken into consideration?

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Thread locked

Message was edited by: Jürgen L

[former_member183424]

Yes, you have to use 101 movement type, System will post the 101 O movement type automatically..

The material cost will given by vendor...

At the subcontracting, he will must tell you that what charges he will take for material B.

You have to give the same charges in PO price field as material cost.

After doing 101 O movement type, you can see the stock of material B will provided to vendor in MBLB.

Then create your subcontracting PO and give the component for material A and material B.

[Former Member]

HI,

Please perform an initial stock upload of certain quantity to avoid the error.

Sagnik

[sudeep_a]

Guys,

Never ever suggest initial stock upload other than during cutover. (I guess this is not IDES). Generally offsetting entry for stock account in 561 mvt (GBB - BSA) will be legacy balance account. If you upload initial stock just like that, legacy balance will keeps on crediting and your TB never match.

Regards,

Sudeep.

[former_member183424]

Yes... I totally agree with you..

So that I have given the option but I had already mentioned the caution in (Note) portion.

[former_member183424]

I hope you have to pay the full material cost to the vendor for material B.

And you have to pay only service charges to vendor for material A.

Now you can see the difference..

The main process is that

You have already sent material A to the vendor..

And for material B, you should create a standard PO for material B, and then you have to do goods receipt with delivery address the same vendor..

If the vendor will take the payment for only subcontracting, then you can do a process.

Either use movement type 202 and give the stock from cost center..

Or use movement type 561 O..

(Note : 561 O is may be harmful for your accounting entry, before doing this please consult with your FI team)

[bisweswar_sahu]

Hi,

As per subcontract process, material need to issue & byproduct to be received, should part of components of Subcontract Purchase Order.

Hence ignore the "Child part B" in your PO, which is not belongs to your IM. If vendor raising Invoice for the same, as per agreement give along with Subcontract Charges.

Regards,

Bisweswar

[sudeep_a]

Hi,

There are 2 options. If component B is non excisable, need not to show in any challans and if you dnt need to keep stock of this, you may create BOM with component A only and add the price of B in subcontracting charges.

But, the best solution will be, create a PO line item for component B (with standard item category). In the delivery address tab, enter the vendor name and put SC Vendor indicator. So, when you do GR against this PO item, the material will be moved to Stock provided to vendor. Then you can do GR for subcontracted material.

Regards,

Sudeep.