Skip to Content
author's profile photo Former Member
Former Member

Acting as a subcontractor

Hi all,

I am aware of the subcontracting process where we are sending raw materials to vendors, however in my case, it is the other way around and we are the vendors and receiving the raw materials.

Would this process make sense?

1. Create sales order

2. Create PO with 'free item' checked so there is no accounting impact and MIGO goods into inventory

3. Make-to-Order production

4. Deliver goods

5. Invoice

My issue is with the 'free item' on the PO and whether it is the standard way of approaching this or not.

Thanks

Add a comment
10|10000 characters needed characters exceeded

Related questions

3 Answers

  • Best Answer
    author's profile photo Former Member
    Former Member
    Posted on Nov 02, 2011 at 04:45 AM

    Hi,

    What you mentioned is correct. That is how the scenario is handled.

    Some points which will make the process better.

    1. Maintain seperate storage location for these materials

    2. If possible maintain seperate MMR for these materials so that regular materials are not considered by the system while processing MRP for the sale order.

    3. For Sale order processing, manitain new pricing procedure where "Conversion charges" are to be charged from the customer instead of normal price.

    Hope this helps.

    Regards,

    Sharan

    Add a comment
    10|10000 characters needed characters exceeded

  • author's profile photo Former Member
    Former Member
    Posted on Nov 01, 2011 at 09:03 PM

    I would recommend you to go through this process.

    http://wiki.sdn.sap.com/wiki/display/SCM/Subcontracting+Process

    Assign Text Removed

    Thanks

    Aman

    Edited by: Lakshmipathi on Nov 2, 2011 12:32 PM Please dont ask for points

    Add a comment
    10|10000 characters needed characters exceeded

  • author's profile photo Former Member
    Former Member
    Posted on Nov 09, 2011 at 02:57 AM

    Hi,

    Have you considered using the following process:

    1. Use of the MM consignment procurement process to get the raw materials from your customer. You would need to maintain a vendor record for this consignment PO process.

    2.These materials would be managed as special stock in your plant, giving visibility to the partner stock lying at your locations. These would be managed as the same material number.

    3. These materials would be transferred to your stock before being issued for production.

    4. The settlement for these stock is done at periodic intervals and would depend on the stock withdrawn. It is possible to maintain consignment info records to help with this process.

    5. The sales order is created as agreed by the customer, delivered when stock is made available and billed.

    You can fine-tune this process to match your requirements. The advantage would be the visibility of stock, ability to undertake physical stock inventories and the determination of settlement amounts for stock issued.

    Regards

    PD

    Add a comment
    10|10000 characters needed characters exceeded

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.