scenario: client is a sub-contractor

[Former Member]

hello, friends.

when we consign a raw material or component to a vendor for a project or production, and the output comes back to us as finished goods, this would be a sub-contracting scenario. the lead module here would be Materials Management.

but from an SD point-of-view, that is a reversal of roles, a customer sends his raw materials and/or components for us to work on and we return it to him as finished goods. with your patience, my questions:

1. is there a standard SD scenario for this, and what is the proper SAP term for this scenario?

2. if there is such a standard scenario, would the creation of a sales order for this type of scenario trigger an inbound delivery for the raw material/component while linking with a production order or a project?

3. should we assume that if there is such a scenario, this would be a make-to-order, and we would process the outbound delivery in a similar manner (i.e. from sales order stocks)?

if existing threads on this subject exist, i would appreciate the definition and i would take it from there.

many thanks!

[Former Member]

jonathan y ,

We can to extend MAP this scenario using Consignement Process.

1. We call it as SD Sub Contracting or Job work no specific term

2. Here the customer will be sending material with 57F4 Challan for us to do certain process and send it ti him

3. Through Consignment Fill up we bring in the customer material

4. DO the needed changes to the material

5. Send it or return it back to customer through Consignment returns

6. we will treat it as customer stock or consignment stock , we will send back to customer using consignement returns process

7. you use Annexure VI if you are returning partially to met Excise Regulations else if you are returning fully then Annexure vi is not required

8. ED is not applicable, Create a seperate pricing procedure which carrie normal pricing and send it to the customer

Regards

Sathya

[Former Member]

thank you very much. very helpful!

[Former Member]

P.S.

i've read a similar issue posted by SAPGURU, i think dated March 2009. although i think the answers are helpful, i am still wondering if there is a more extended solution.

thanks again.

[Former Member]

As per my knowledge,your senerio inline with JOBWORK.

1.material should be non-valuated since it is a customer material

2.Create sale order with MTO senerio

3.MIGO -Reciept the raw material or component with reference to sale order

4.After delivery,create JOBWORK Invoice which will have price per component

5.If it is a excisable material,you recieve 57 F4 challan from the customer.In standard SAP SD we cant able to monitor the 57 f4 challan.we can maintain text when we reciept the material.

Regards,

Murali.R

[Former Member]

hello, Murali.

very helpful, indeed. but i guess we don't have to define our own sales order type, because we will be using MTO, and the MRP strategy would be the key... interesting.

is still necessary that we issue a PO for a non-valuated customer material, which we reference when creating an inbound delivery (type EL)? in 0VLK, there is a setting for "order required", there are entries such as "purchase order required" and "inbound delivery for sub-contracting" - what is the significance of the latter?

when we MIGO the material, the movement type should be the one so that the components are kept as customer material. perhaps even store it in a special storage location...

if we are to automatically limit this to the specific sales order, i guess PP can configure the BOM so that the component is sourced from this stock? and is it properly described as "consummable"?

i know that these are extended questions... but i am very thankful!!!

regards...

Edited by: jonathan y on May 4, 2009 7:42 PM