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Sub Contract Manufacturing

Dear Experts

I have a requirement as follows:

Plant A - Is the Inhouse Vendor from Other company

Plant B - Is the manufacturer and does the conversion of the product

Plant C - Creates Sales Order and Delivers to the customer

Requirement is:

Plant C raise the Sales Order, Requirement should go the Vendor to supply the raw material from Plant A to Plant C

Plant C will then do sub contracting of material to Plant B

Plant B then converts the raw material and supply the Finsihed goods to Plant C

Following are my questions:

a. How planning have to be done in SAP so that Plant A is informed when to send the material

b. How Plant B understands when Raw material will be received from Plant C

c. Document flow across these plants and the process

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  • What does Plant A do in this scenario, exactly? Plant C does the sale, plant B does manufacturing. Why do you need Plant A?

    Also - are they all in the same SAP system?

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1 Answer

  • Mar 06 at 01:13 PM

    Since the material code should be different in sale order to the one which is there in PO to plant-A, this is ideally, two separate process. Once the sale order is created, based on the production BOM, plant A will start producing the raw materials and supply to plant B who would then, do conversion. Once this activity is over, the material code would get changed and with that material code, plant-B to transfer to plant-C who, then, have to follow the normal SD process

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    • Hello

      You would set up a stock transfer special procurement, telling that plant B is the supplying plant for plant C, then MRP will drive the stock transfer requirements to plant B and generate requirements.

      You will also define the special procurement for the components in plant B, so that they can be brought from the other plant.