Internal subcontracting between two plants

[subramanian_subramanian]

Dear All,

Please help me with the below Internal subcontracting scenario

1. I have two plants 1000 & 1100 (Company code 1000)

2. 1100 plant buy raw material for FG1, due to machine unavailability, It give Sub contracting PO to 1000 plant to manufacture the FG1,

3. Material master, BOM, Routing maintained for FG1 in plant 1000.

4. Raw materials RM1 ,RM2 were issued to plant 1000 using 541 movement & Subcontracting challan.

How the same raw materials RM1 ,RM2 material can be received in plant 1000 & How the manufactured FG1 can be delivered back to plant 1100.

pls suggest a better process.

Subbu.

[Former Member · Accepted solution]

Hi Subbu,

You are treating plant 1000 as a vendor for plant 1100 so in this case the raw material in plant 1000 needs to be maintain as a non valuated material so using mov. type 501 you can bring the stock of material also finished product is also needs to be maintained non valuated only. You can maintain the routing and BOM for the same. Service charge or processing cost will be charged in this case by plant 1000 so SD will create a service invoice against the plant 1100.

Also take a help of FICO consultant

I think this will help you.

With Regards

Anant

[nilesh_malvi]

Hi Subbu,

Dont close it. We were facing same problem.

But we found a work around for that. See, actually when you use 541 mvt, you are not able to transfer material to plant 1000. So what we did is we maintained locations for plant 1000 in plant 1100 by having some special type of codes.

For plant 1000 we maintain locations wich starts with 1xxx

For plant 1100 we maintain locations which starts with 2xxx, but for this scenario we maintain locations which starts with 1xxx, to identify that these locations are of plant 1000.

Now we configure mvt 311 for subcontracting challan. Means when we have to send material to plant 1000 we do movement through 311 and by using that document we can prepare 57F4 challan.

Steps are as follows:

1 - Maintain Subcon PO

2 - Transfer material with MB1B with 311 mvt (customized with fields PO and vendor code) to location 1xxx in plant 1100.

3 - J1IF01 challan preparation.

4 - MIGO for GRN

5 - J1IFQ for reco challan

6 - J1IF13 complete challan.

We found it's better way to use as it does not contain any excise implecation.

If it's usable, dont forget to give points...!

Thanks dear.

Nilesh M.

[Former Member]

Hi All,

I am facing the same problem wit my current client. Please tell how the subcontracting plant(Subcon vendor) wil do the receipt of the raw material. Let me know how excise implication of the raw material is solved.

Its very urgent please provide some solutions.

Regards,

Nandkishor Nachane

[subramanian_subramanian]

closed, thanks to all

[former_member196530]

Sub-contracting between two plants is not supported by SAP .You can not Map the subcontracting PO scenario for these 2 plants of same company code because in Subcontracting PO you need to pay to the vendor, but for same company you cannot do like that.You may have to use STO with special procurement Key -40 to send the material to other plants

For this you need to process through Stock transfer b/w 2 plants of company code.

1) Create the subcontracting materials & finished material in both the plants9plant 1 & plant 2) and do customizing for set up stock transfer in IMG settings.

2) Create the STO in job processing plant(plant 2) first and do the Stock transfer of the material from one plant to other based on stock transfer order, so no net price here only stock transfer of the subcontracting material.

3) Other plant 2 (job processing plant) receives the material based on STO.So STO is closed, then stock is updated at the job processing plant then PP process will take care like creation of BOM, Production order, confirmation and finally finished product is updated in the Job processing plant.The subcontracting material gets consumed during PP process.

4) Then create another STO in plant 1 for recieving the finished material from the plant 2

so again Plant 2 will do the stock transfer of the finished material to plant 1.

5) So finished stock is updated in the Plant 1.

here there is no payment transactions as all the process is through the STO no conditions here, no subcontracting challen , only stock transfer documents.

Refer :

Regards

JH

[former_member187989]

How do you recieve raw material in Plant 1000 ?

[Dsk]

Hi,

1. for this scenario it is better for you to use the STO with Special procurement key.

2. Kindly let us know if there was any specific reason to do subcontracting btn plants /

reg

dsk

[sundaresan_velayudam]

Dear Subbu,

I feel this scenario will come under" STO" Stock transport order instead of Subcontracting.

please refer this thread abt STO

[subramanian_subramanian]

Hi sundaresan,

When we use Sub contracting challan, there is no need to pay excise for 180 days that is the benifit customer feels.

If we opt for STO excise needs to be paid even though it is within the plants.

Subbu

[former_member187989]

Good receipt raw mateiral using MIGO in plant 1000.

Do production confirmations.

Send FG material using Sales process(Sales order --> Delivery --> PGI ---> Billing(proforma)) if you treat

both plants as customer & vendor relationship.