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Former Member

subcontracting with vendor furnished material

Hello everyone,

I hope you can help me with that:

We have several items that are produced by our vendors according our design/specifications. Through a purchase order we send them the BOM component (standard 541 mov) and we receive the final assembly. So far so good.

It gets complicated when we have vendor furnished material.

- If we put them in the BOM it happens that the MRP plans their requirement (purchase/production whatever) and those are expected to be sent to the vendor.

- If we do not put them in the BOM it works fine with subcontracting but it is not properly correct.

What my colleagues did was: create a BOM for production (1) to use in subcontracting and create a BOM for cost calculation (6) that contains all the item

Is there another way to identify and plan accordinly the vendor furnished material ?

I read few post about duplicating the material version and specify it in the purchase info record.

I thought we could have one BOM for internal production with all the data and one BOM for subcontracting that exclude the vendor material, but I am not sure it is ok for cost calculation... unfortunately I am not a PP expert and I am afraid I am missing something.

thanks everyone in advance!

valentina

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2 Answers

  • Best Answer
    Nov 04, 2015 at 09:11 AM

    Hello Valentina,

    Are you saying that this material can be manufactured in-house as well as procured from a subcontracting vendor?

    And if this is the case how should it be costed?

    there are various ways you can approach this, it dependants on the business policy viz..

    1. You can have an standard cost estimate base on just the production process or the Subcontrating process. This can be achieved via the solution described by expert Rupesh above.

    2. Do you want to tack the cost and stocks separately for inhouse and Subcontrating. You can explore the split valuation Split Valuation - MM - Material Price Change (MM-IV-MP) - SAP Library

    Product Costing at Valuation Type Level - Product Cost Controlling and Valuation - SAP Library

    3. You want to have a predefined weight-age for inhouse and external procurement and have a single cost estimate having components of both sources, then you can explore mixed costing Mixed Costing - Product Cost Planning (CO-PC-PCP) - SAP Library

    Regards,

    Abhishek Rai

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    • Former Member Abhishek Rai

      Abhishek,


      I have to further investigate on this "Production Relevant" field and understand if it works for me.


      I would guess that if I have this BOM


      Item A bike

      - item B number 2 wheels ----> not relevant for production

      - item C number 1 structure ---->  relevant

      - item D number 1 seat ----> relevant

      - item E number 1 moving mechanism ----> relevant


      MRP would plan purchase of item from C to E and not consider item B.

      My subcontractor would then take care of purchasing the wheels.


      At the moment the item is not produced internally but my boss told me that it will be so I have to come up with some idea.

      Thank you very much for your help, I apreciated 😀

  • Nov 04, 2015 at 08:52 AM

    Hello,

    In this case you can have the multiple BOM and production versions.

    In costing tab of your material master you can define the default production version for costing.

    So while  costing system will consider the BOM assigned to that production version.

    Best Regards,

    R.Brahmankar

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