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Subcontractin in SD

Former Member
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Hi Experts,

We have a subcontracting process where RM/PM is issued by Parent company and other company charges processing fees and sends back FG to parent company.

So this is typically a subcontracting process in SAP where one company sends the material to vendor( 2nd company ) and vendor processes the goods for 1st company and charges processing fees. In 1st company stock will be reflected as stock with vendor and in vendor books (2nd company), this stock will be not appear.

Both the companies are on SAP and using same client.

Now our requirement is as under -

1. Parent Company needs Inventory tracking which is being issued to Vendor for their materials ( because both the companies are on SAP )

2. Vendor needs to generate an invoice for processing fees with following details:

1. Material Produced

2. Quantity produced

3. Batch details

This is legal requirement where Invoice should capture Processing charges details at the time of dispatch..

Kindly advice how this scenario can be mapped with above details. Issues which we are facing are :

1. If we use simple sub contracting process, material tracking is not possible in Parent Company

2. When material is issued to Vendor (Company Code 2), How to receive/dispatch FG material in Vendor so that complete processing in PP can be mapped.

With Warm Regards,

Accepted Solutions (0)

Answers (1)

Answers (1)

Former Member
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HI

For example take 2 companies 1000 and 2000

1000 sends goods to 2000 company(vendor) for sub contracting so in 1000 we can know the stock position that the stock is with vendor 2000 for sub contracting

In 2000 you have to create a separate material code for that material which is received from 1000 and for this material should be non valuated stock for this you can maintain BOM and routing but i think cost estiamte may not be possible

After the process is over you can send the the finished product to company 1000 and here i think the material code will be differenet

now 2000 can raise the invoice with only processing charges

regards

Former Member
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Dear rithvika,

Thanks for replay,

How i would receipt material in 2000.

Former Member
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hi

in 2000 u have to take MIGO without PO

when RM comes from 1000 to 2000 go to MIGO and do GRN with movement type....501 and special stock indicator E

means GR without PO 501 E Receipt w/o purchase order into unrestr. sales order stock

and in 1000 company code u have to create 2000 as vendor

and in 2000 company create 1000 as customer

regards

Lakshmipathi
Active Contributor
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1000 to raise a PO on 2000 for carrying out subcontract process and against this PO, material should be delivered to 2000.

Based on this PO reference, 2000 will have to carry out MIGO and receive the material.

Here the receiving plant can consider the following:-

1) Create the incoming component (let us say ABC) with material type UNBW

2) While doing MIGO, only stock quantity will get update

3) Create a BOM in CS01

4) Confirm the service with one operation in PP with material code as ABC1 with material type as HALB

5) While doing PGI, stock at servicing plant will get reduced.

6) HALB being sold to manufacturing plant with no ED, Cess, Tax etc.

7) Raise an invoice (charging ONLY for service charges)

😎 TDS not applicable due to plant to plant transaction

thanks

G. Lakshmipathi

Former Member
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Dear rithvika,

I will take MIGO, ok but i need to take migo w/o Purchase order. here i wll take through 501 e movement type what ever the material receipt from 1000 customer (treated as a vendor in 2000 at the time of RM receipt) then there what is the account setting in OBYC.

the process order should be generate and RM should be consumption and i need FG. Could u suggest this