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Subcontracting

The document outlines the process of subcontracting, including the creation of a Bill of Materials (BOM) and the steps for issuing components to a vendor for product manufacturing. It details transaction codes for maintaining and displaying BOMs, creating purchase orders, and managing goods receipts and invoice verification. The final steps involve confirming the issuance of components, receiving finished goods, and processing vendor payments.

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Jancy Sunish
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10 views6 pages

Subcontracting

The document outlines the process of subcontracting, including the creation of a Bill of Materials (BOM) and the steps for issuing components to a vendor for product manufacturing. It details transaction codes for maintaining and displaying BOMs, creating purchase orders, and managing goods receipts and invoice verification. The final steps involve confirming the issuance of components, receiving finished goods, and processing vendor payments.

Uploaded by

Jancy Sunish
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Subcontracting

In subcontracting, you give components to a vendor from which a product is produced.


The product is then ordered by your company through a purchase order. The
components required by the vendor to manufacture the ordered product are imported
in the purchase order through the BoM (Bill of Materials), and they are provided to the
vendor. After the contractor has produced the finished product, we can post the goods
receipt.

Create BOM (Bill of Material)

BOM is used to maintain list of components required to manufacture finished products.


T. code: Path: Give final product code→ Maintain plant→ Maintain BOM usage 1→
Press enter→ Maintain item category L→ Maintain Qty, maintain valid date BOM→
Press enter→ And save it.

➢ CS01- Maintain BOM.

➢ CS02- Change BOM.

➢ CS03- Display BOM

Creation of subcontracting info record

Subcontracting info record will be created for final product and vendor combination. ➢
Go to T. code- ME11.

➢ Give vendor.

➢ Give material.

➢ Give purchase order.

➢ Give plant.

Select info category→ Subcontracting enter→ System will copy date from vendor if
required edit the information and save the info record.

Step 1) Create a standard purchase order for the material that has a BOM maintained.

1. Create a PO with item category L.


2. Enter the storage location where the material should be placed upon goods
receipt.
Step 2) On the Material Data tab, click the Components or Explode BOM icon.

On the component screen, enter storage location from which the components should
be issued.

I have created a fake BoM for our material (we sure can’t create LCD TV 40″ from two
components called semiconductors and plastics), but it’s enough to serve the purpose
(you can create a BoM in CS01 transaction if you don’t have it for your test material).

Save the PO.

If your PO needs to be released, release it by using ME29N.

Step 3) In stock monitoring transaction, we will provide the components for vendor.

1. Execute the transaction ME2O.


2. Enter Vendor.
3. Enter Plant.Execute.
Step 4) You will get a list of open item for transfer towards the vendor. You can see
the components from our purchase order.

1. Select the components (click the boxes next to components material numbers).
2. Post goods issue.

Step 5) You will be prompted to confirm the items being PGI’d.

Just confirm the right storage location and quantity. Do that for all of the components.
Step 6) You should see this kind of screen confirming that your PGI was done
successfully for 2 items.

Step 7) The next screen should look like this.

You can see that there is a material document for the components, with movement
type 541.
Or

Issuing the components to the subcontractor through 541


movement type. (MIGO)

The next step is the issuing the components to the subcontractor. This is
done via MIGO. Select transfer posting against the purchase order. Even
though the goods are issued to the subcontractor, the ownership of the
stock is still lying with the manufacturer because the actual stock
consumption will happen only when manufacturer receives the finished
goods. Due to this, there is no accounting document created for this
material document. This issued stock will be shown in the MMBE as stock
issued to the vendor. This is a special stock in SAP and called as parts
provided to the vendor.
Step 8) Goods receipt. (MIGO)

In this step, the manufacturer will receive the finished goods from the
vendor. When the finished goods are received from the subcontracting
vendor that means that the components are consumed at the vendor
premise for making the finished goods.

You can post a goods receipt against a purchase order to receive the finished goods
from the vendor.

Now you have issued the components to subcontractor, received the finished product.

9. Invoice verification.

The accounting clerk in the accounts payable can do the invoice


verification (SAP T code- MIRO).

10. Vendor payment.

The baking team in the accounts payable department will do the vendor
payment.(SAP T code- F-53)

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