Reverse Subcontracting of customer with Receiving RM that same as our RM

[Former Member]

Hi,

The COMPANY is producing A, B, C finished goods with using raw material named X.

The COMPANY now facing a problem: a CUSTOMER sends RM as same as X which the COMPANY already uses, but now CUSTOMER sends it free of charge.

CUSTOMER says: "with my RM, produce A and send me".

Here is the problem: COMPANY does not have to use the RM that CUSTOMER sends him to produce finished good A, also does not have to produce A for him if the COMPANY has enough stock. Namely it is possible that COMPANY can use the RM that CUSTOMER sends him to produce B or C finished goods for his stock.

COMPANY buy raw material X. But CUSTOMER sends it free of charge. Than how can CO handles Standart Price of the raw material ?

Additional information:

* Raw Material X is managed in batches.

Please help me.

Regards,

Uğur Serli

[former_member197616]

Hi,

Your situation be broadly be understood as follows .

Your company produces a,b, c using X . At the same time you have got your own sale for your a,.b,c and you produce a,b,c as per that .

Your customer also wants A and send X free of cost . Are you going to sale A for a cost to for your customer or not ?

As work around , for this material X create split valuation as a cust and proc . Your procurement will have the cost . but not the customer sent . .

One more question is do you sale at differrant prices for the A to difft customers especially to this customet who send freee and to oher cistomers ? The go for split to A also .

Regards,

[jagdeepsingh83]

As you have material X.. Do you get any sales order from the customer ?.. if you create sales order before you receive them against sales and make it sales specific .. you can have it valuated sales stock  if you want Check settings

Valuated Sales Order Stock Configuration - ERP Financials - SCN Wiki

You need to explore customer consignment process - which means stock belong to customer it can be valuated or non valuated.  Check Best practice on Customer consignment process.

119 – Customer Consignment Processing

[JL23]

Jagdeep, in customer consignment process the stock does not belong to the customer, the stock is own by your company and only stored at the customer.

Ugur, from an integrated process point of view your business process cannot be covered by SAP. You are physically mixing customer owned stock with your own stock. This is not possible in SAP, you cannot have a single stock quantity with separate valuations. You certainly get a situation where SAP shows either the stock different to the physical situation or if you mix the quantity in SAP then the value is mixed too and does not reflect the real ownership in SAP anymore. I do not even want to talk about storage capacity and MRP impacts.

Keeping the stocks in SAP separate may result in some difficulties with quality management, especially as it is about foodstuff it should be traceable and accurate.

I know about such situations from long ago when we used to subcontract something for a customer which had the same chemical raw material as we used in our own production.

At that time we did not have SAP, not even a computer system, noted all movements on index cards, but even then it was difficult to keep the quantities calculatory separate.

Whatever the solution for your case is, it is certainly a workaround with some more effort and probably loosing some accuracy on integrated processes.

[BijayKumarBarik]

Hi,

Your A, B, C are finished goods and  raw material is X

You can have three BOM for A, B, C  finished goods where raw material is only X.

BOM1  for A with X, BOM1 for  B with X and BOM1  for C with X

As CUSTOMER sends X free of charge and also COMPANY buy raw material X from other vendor- you can go for maintaining split valuation by maintaining different price for same material X.

Regards,

Biju K

[jagdeepsingh83]

hi Ugur

is it specific any industry or general manufacturing industry, ?  You can also check stock type E available in SAP.

Sales Order Stock - Managing Special Stocks (MM-IM) - SAP Library

[Former Member]

Raw Material is milk.

So that, the raw materials almost always mixing in huge milk tanks.