Scribd
Upload
11 views12 pages

5 Subcontracting Process

Uploaded by

Gaurav Chaudhari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
11 views12 pages

5 Subcontracting Process

Uploaded by

Gaurav Chaudhari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 12

Subcontracting process

Subcontracting process is mainly used in most of industries. In subcontracting


process, raw material is providing to subcontracting vendor. It’s being processed
by subcontracting vendor. It’s being processed by subcontracting vendor, convert
it into semi-finished material and deliver back.

BOM (CS01)
Goods Receipt MvT= 101
Component consume MvT =543
Finished material
(1300016)

Raw Mat
Raw Material
(464822)
Raw Mat Subcontractor
Raw Material /Vendor
Plant/SLoc Raw Transfer posting MvT= (101046)
(Z005) M(4a6t4823) 541

Raw Material
(464824)
Business scenario:

Raw material: Rotor Semi finished: Disc

Raw material: Wheel

Raw material: Brake

My company is manufacturer of disc brake of two wheeler and four wheeler and
in my premises I produce raw material of rotor (disc), wheel material, and brake
pad and I want this material to performed of drilling, boring and assembling
activity from my vendor so in that case I need to generate subcontracting process
in my system

Subcontractor
Raw Material Quantity Price Semi-Finished Material Quantity
Price
Rotor Disc (464822) 100 2000
Disc Brake Assembled
Wheel Hub (464823) 50 5000 50 5000
(1300016)
Brake Pad (464824) 50 3000
STEP 1: Create Bill of Material (BOM)
“A bill of material (BOM) describes the different components that together create a product.”
It contains list of Raw material with quantity against which we can get a semi-finished material

I will put semi-finished material here

This semi-finished product I required


after doing all operation by vendor.

These Raw materials I need to send to This quantity will multiply in PO as per
the vendor against which vendor will semi-finished material ordered Qty.
provide me semi-finished material.
STEP 2: Create subcontracting PO with item category “L”

Item category must be “L”


for Subcontracting

Semi-Finished material

PO order
quantity

As per the BOM, Raw material


Quantity is multiplied automatically with semi-finished quantity.
T-CODE: MMBE

Let’s first check the stock overview for our raw material it is necessary that stock should be available
physically as well as in system, otherwise while transfer posting I could get error of deficit stock
quantity.

Raw material is available to transfer to the vendor.

STEP 3: Transfer Posting


T-CODE: MB1B/MIGO

In this step I use special MvT i.e. 541 to transfer the goods from company stock to vendor stock
In this step I enter storage
location, where my raw stock is
available.

T-CODE: MMBE

Here we can see our raw


material is transfer to stock
provided to the vendor
No accounting documents are generated after transfer posting because I am responsible to
provide the stock to the vendor.

No accounting Document gets generated after transfer posting.

STEP 4: Goods receipt of Semi-finished material.

While posting goods receipt here system show me how semi-finished material send to vendor
During goods receipt, final product is received with MvT 101.

Here we can see component/raw material consumed automatically with special MvT 543 (O).
T-CODE: MMBE stock Overview for Raw material

Raw material stock

T-CODE: MMBE stock Overview for Semi-Finished material


Accounting Document
Likewise for other raw materials same accounting entries are generated.
Invoice verification (MIRO): Verifying invoice of vendor and Payment to the vendor against services
vendor was performed.

Payment to the vendor against services for 50 pc.

You might also like