Subcontracting process in Production

[former_member184574]

Scenario: In house production material (Header material) is produced with three operations out of which second operation is performed outside (provided to vendor) due to various reasons like Machine breakdown, capacity problems.....

BOM of the material contains three components. First operation uses first component, Second operation which is performed externally, uses second component and Third operation uses third component.

Process Flow :

Create BOM for header material as shown below with CS01 with three components as input materials.

Create routing for material with three operations and for second operation assign control key PP02 as shown below with Transaction code CA01 and no need to maintain the work center….for the second operation

Assign the materials to the respective operations as shown below

For the second operation assign external processing parameters as shown below.

Enter details of Purch. Organization, Purchasing group, Material Group and others as per the requirement.

Create the production order for the header material with CO01 as shown below

Save the Order

Go to the created Production order in change mode and select the second operation and go to operation details as shown below.

Check for the generation of Purchase Requisition in the Ext. Processing Tab.

Now release the Production Order and save the order

Issue the First and Third components to production using transaction code MB1A

Now save and components are posted

Now confirm the first Operation with transaction CO11N after completion of the same as shown below and save

Create Purchase Order with the Purchase requisition generated for the second operation with transaction ME21N

Enter all the required details and save the document. Now the purchase order created 

Check whether the second component is attached to this Purchase order or not by clicking on the Components button

Now issue this component to the purchase order with movement type 541 through transaction MB1B as shown below.

Now check the stock of second component appearing as Stock provided to vendor as shown in the below screen shot

Semi-finished product along with second component sent to vendor for executing the second operation. Once the operation completed by the vendor semi-finished product is sent back to plant for execution of third operation

Now make GR for material with the purchase order with 101 movements and during this GR second component stock is consumed which is provided to vendor 

Now check for the stock of the second component in the stock overview and it is consumed.

No need to confirm the second operation (Now confirm the Second Operation in the Production Order). When you do GR against subcontract PO, system automatically will change the external operation status as "EODL" External Operation Delivered.

Now confirm the Third Operation in the Production Order after completion of the same...

   Make the goods receipt for the production order through MB31. check the stock in mmbe

[kalyana_chakravarthy2]

Hi Kumar,

  Nice document. Keep sharing.

Thanks

Kalyan

[Ritz]

Kumar,

"Semi-finished product along with second component sent to vendor for executing the second operation. Once the operation completed by the vendor semi-finished product is sent back to plant for execution of third operation"

Do you mean , material which is output of operation 0010 & the component allocated to operation 0020 will be sent out to vendor?

or it will be only component allocated to operation 0020 ?

Also as once this component is back after processing done at vendor end , how do we distinguish between componet with before processing & after processing.

If you can include this information it will be more useful document.

Thanks

Ritesh

[Former Member]

Dear Kumar,

Excellent job. Keep sharing such documents.

Regards

Qazi Raheel

[former_member209265]

Hi Kumar,

Nice and very helpful.

Regards,

Krishnendu.

[Former Member]

Hi Kumar,

Thanks for sharing knowledge....

Is there the provision to send the received Operation to quality check? how do i ensure that assigned job to vendor is successful completed before accepting again on my production line and releasing the payments.

Rgds,

Abhijit D.

[former_member184595]

Hi Kumar,

Thanks for sharing this to all. Points Awarded. :smile:

[former_member184574]

Thanks..Kalyan

Kumar

[former_member184574]

Hi,

Thanks for your compliment

Thanks

Kumar

[former_member184574]

Hi,

Thanks

Kumar

[former_member184574]

Hi,

You need to activate the relevant inspection type 0130 in the material master in QM view. If this is done when we make the GR for Purchase Order you will get inspection lot...

Thanks

Kumar

[former_member184574]

Hi,

Thanks for your compliment...

Thanks

Kumar

[sap_pp13]

Kumar(in IDES) and Consultants working in Release 605 and later, Just an observation to share if your MMBE screen display/layout looks as in the document screenshots with the Unrestricted use stock moving to the 3rd column.

   Although there is no negative impact the layout has been affected.

These days are the days of enhancement packages and this error is because of an activated business function in 605 and other reasons for later releases.

If using 605 read SAP KBA 1604242 and implement the correction note 1528781 mentioned in it.

For later versions look for the appropriate note.

Sorry for deviating from the topic.

[nitin_jinagal]

Nice document :smile:

ntn

[former_member184666]

Hi Kumar,

Good document. Keep on sharing.

Regards,

Ramgiri

[former_member184574]

Hi,

Thanks for your feedback...

Regards

Kumar

[uma_pathy3]

Hi Kumar,

• I am assign the inspection type 0130 :Receiving inspection from external processing that particular second operation material master in QM view and also assign the particular operation external processing tab.

After that GR no raise the inspection lot in QA32, if any other t.code having this checking.

• I need one clarification: This second operation component go for vendor so the same process flow to create subcontract Challan, excise invoice capture, all those things correct.

• If it is any damage for material in subcontract vendor side so what happen and what is the procedure to follow.

Thanks with regards,

N.Umapathy.

[Former Member]

Hi Kumar,

     This doc is very help full for us but can it possible in subcon po material component quantity is 30 ea then user only issue to vendor 30 or less then 30 but not  sent more then 30 through 541 can it possible if user sent more then 30 then get the error msg.

[former_member209265]

Hi Rashi,

yes. It is possible. Check for any user exit. ABAP person can help you.

Regards,

Krishnendu.

[Former Member]

again it's nice kumar.

[former_member185379]

Hi--- I tried to run this scenario. I followed all steps as per document. but When i create a production order, purchase requistion is not creating in external processing tab. Please guide. Thanks

[eswar_hi]

Nice document, its useful.

[eswar_hi]

Nice docs Kumar...

Its useful.

[former_member221091]

Very well explained Kumar.

Also, you could maintain an Info record within the operation.

Many a times cos. want to send the material to an external vendor for say painting; finishing activity (any other value addition process). At that time, not necessary to have a PReq created with item category 'L'. It can be AA='F' and item category blank. You pay the vendor for the service only.

[Former Member]

Very useful and brilliantly explained.

[vladislav_sanikovich]

Thank you for this detailed guide.

[former_member195779]

Hi Kumar,

Good document on Operation subcontracting.

[Former Member]

Hi Kumar,

 

nicely explained

very useful documents.

 

[payal_mehrotra2]

Dear Kumar,

We have a similar scenario in process industry and I have created the recipe same as explained by you.

However I am facing below issues:

1. PR created does not have the component assigned thus I get the error ME154 - not possible to determine components.

In you example I see the components get assigned to the PR and PO, if the component has been allocated to the operation which is being externally processed.

Can you please let me know if there is any special setting which takes care of this? Do you create a BOM for the component provided to the vendor?

In my case for making FG 'A', component B is used. This component 'B' is subcontracted to the vendor for external processing. Vendor returns the material as component 'B' only. That is the sap material number remains the same.

2. in the BOM of FG 'A' for component 'B' I have set Material provision indicator as 'L' because if I do not do this, I am unable to convert the planned order to process order due to error 'movement type not specified for component B in production order customizing'

Appreciate your help.

 

[caio_cabral]

Nice article, thanks

[Former Member]

Hi,

I have a question. If the material is already issued to production order, how would issue that to subcontractor? It is not available in inventory for doing transfer posting.

[former_member762371]

Hi Mr. kyatam.vinamrathkumar

It is very details and very helpful to get understand the process.

 

I have a query here - how to process if i am sending my 1st operation's material to vendor for subcontracting to perform 2nd operation process without any component.

Thanks in advance.

Regards

Rohit

[Kiran_Aghav]

Dear PP/MM Experts ,

-While executing operation level subcontracting, I created Purchase Requisition after releasing the Production Order.

- Using ME21n I converted this PR into PO.

-Now for sending material to vendor I am trying ME2O and ADSUCON. Material is getting transfer to vendor (using 541 movement type) and can be seen in MMBE but if checking the material document the purchase order reference is blank and I think due to that its not allowing to do GR in MIGO and giving error "No goods receipt possible for purchasing document 4500000186". So due to this error the status of external processing operation is not updating.

- Error in MIGO while doing GR

-Material document for 541 Movement type not having reference of PO

MAN Production Planning (PP) MM (Materials Management) @rupesh_brahmankar3 SAP ERP 

[rajkumar2151]

Hello,

check whether you have released the Strategy implemented. if not released then release the PO first.. If it has not been released, please release the purchase order first.

Please review the following:

No provision has been made for goods receipts for this purchase order or order item.

Possible reasons for this are:

- The purchase order contains no items in the specified plant.
- The specified item does not exist.
- Currently, the scheduling agreement has no open schedule lines, or the schedule lines have not yet been transferred.
- The item category of the purchase order items in the plant does not allow goods receipts.
- The purchase order items in the plant have been deleted or are blocked.

For confirmation control for the order item(s) to be carried out, a confirmation (shipping notification) must have been received, and this has not yet been entered.