Subcontracting with Scrap

[Former Member]

hello gurus,

In subcontracting process i am sending 105 kg of Raw material (Material A)

subcontractor is returning me Finished product 100 kg of material (Material B)

then please tell me how can i Receive 5 kg in scrap from Vendor

I want maintain Scrap as Material C,

Scrap has some Value which will be sold later...

Pls tell me in Step by step

Thanks a lot/Regards

[Former Member · Accepted solution]

Hi

While Creating BOM for youe Finished Product Material B....in Components List, Maintain The Scrap Material C Qty. as a Negative Component.....

Then While you do GR for your Finished Product, Material B in MIGO......the Scrap Material C - 5.0 kg will be generated in 545 O+ M.Type......and it will be lying at SC-Vendor's Place.....Then you have to separately take back this Scrap Material C in MB1B useing M.Type:542 in to Company's stock and sell...

Reward if useful

Regards

S.Baskaran

[Former Member]

Hi

When u r making a subcontracting you will be defining a BOM

For example as per u r scenario

You r sending a material of 100 Kgs and u r product is B of 100 Kgs and the scrap is 5 kgs

Maintain the scrap Mat C in your Bom has negative value(-5 Kgs)

Bom For B

Mat A 100Kgs

Mat C -5 Kgs

Then make a usual subcontracting purchse order with item category L then issue the material.

Once the vendor has supplied the product B 101 Mvt. type will be for Product B and 543 movt. will take place automatically and 545 mvt. will take place Rcpt. for SC byproduct automatically it will get updated in your stock and your inventory value grows up and the scrap will be valuated.

Regards

[Former Member]

Hi Veera,

Please refer the following link

http://help.sap.com/saphelp_46c/helpdata/en/4d/2b900743ad11d189410000e829fbbd/frameset.htm

Below gives you the step by step Sub Contracting process.

(1) You have a material that can be procured externally, and you have maintained BOM with components. Any waste generated and received during subcontracting process can be maintained as component with negative quantity.

(2) You create a subcontracting PO (PO with Item Category L). You can also maintain Purchase Info Record for Subcontract category for material and subcontractor.

(3) You make a transfer posting to issue components for SC PO. Material is sent to subcontractor. As material remains under your ownership, system does not make any value entry. But quantity is shown as "Material Provided to Vendor"

(4) You receive finished material against SC-PO. You also specify components consumed in manufacturing of finished goods. Additionally, if you have negative components in BOM, now you'll also receive subcontracting by-products. There are three events, so three accounting entries are generated:

DR FG Stock/ SC By-Product Stock

CR Change in Stock (FG/ SC By-Product )

(for finished goods received)

DR Subcontracting Charges

CR GR/IR Clg

(for moneys payable to Subcontractor)

DR Consumption (Components)

CR Change in Stock (FG/ SC By-Product )

(material provided to Vendor is now charged to expense)

(5) You do the IV for SC Invoice, and the process is complete.

Thanks

Murtuza