In this blog, SAP Sourcing and Procurement consultant will be able to learn the concept and mapping procedure of Multilevel Subcontracting Process with Two Subcontractors in SAP system.
Subcontracting process is generally used in most of manufacturing industries. In subcontracting process, raw materials are provided to subcontracting vendor. It’s being processed by subcontracting vendor, convert it to semi-finish material and deliver back.
Also Read: What is SAP MM Certification?
Many a times, more than one subcontractor is used for manufacturing at different level of BOM. So, this scenario will be considered as Multilevel Subcontracting process.
Scenario :-
In this scenario as shown in below structure, two raw materials (SUBCON-RM01 & SUBCON-RM01) are provided to first subcontracting vendor (SC Vendor-01).
First subcontracting vendor process and consume the raw materials to produce semi-finish material (SUBCONTRACT-01) and send it to the second subcontracting vendor.
Second subcontracting vendor process it further and produce finish material (SUBCON_FINAL) and finally send it to the warehouse of procuring plant.
Mapping procedure of a given scenario in SAP system.
A] Master Data required
Material Master setting for Subcontracting Materials (MM01)
BOM 1 (CS01)
Subcontract material SUBCONTRACT-01(HALB) (Sp. Proc 30)
– Raw Material (SUBCON-RM01) (ROH)
– Raw Material (SUBCON-RM02) (ROH)
BOM 2 (CS01)
Subcontract material (SUBCON_FINAL) (FERT) (Sp. Proc 30)
-SUBCONTRACT-01(HALB) (Sp. Proc 30)
Update BOM in Production versions (MM02)
Maintain these BOM in production version (Material master MRP 4 view) of respective header material. So it will automatically explode when we create purchase order.
*Purchasing Info record is optional.
B] Step by step process :-
Subcontracting Purchase Order to SC Vendor-01
1) Create Subcontracting Purchase Order to SC Vendor-01 for material (ME21N)
2) Indicate SC Vend in Item Detail Delivery tab to SC Vendor-02 (also tick the check box)
3) Enter Net Price (Processing cost)
4) In the item detail tab,Material data click on components and Explode BOM 1
Goods Issue to Subcontractor (ME2O)
1) Post Goods Issue according to the Purchase Order number (4500000863) above.
Subcontracting Purchase Order to SC Vendor-02
1) Create Subcontracting Purchase Order to SC Vendor-02 (ME21N)
2) Keep delivery address to plant as by default.
3) Enter Net Price (Processing cost)
4) In the item detail tab,Material data click on components and Explode BOM 2
Goods receipt for first subcontracting purchase order items (MIGO)
1) This is generally done when SC Vendor-01 has sent confirmation of sending the goods to SC Vendor-02
As we have maintain delivery address of SC Vendor-02 in the delivery tab of first purchase order. System automatically selects movement type 101 O (GR to SC Vendor)
After saving this document system posts this material stock as stock provided to vendor.
Therefore no need to transfer the material through ME2O. (It is already delivered).
Do Invoice Verification for first subcontracting purchase order (MIRO)
Goods receipt for second Subcontracting purchase order items (MIGO)
This is done when SC Vendor-02 sent finished product to our warehouse. This material stock is posted in our plant storage location.
Do Invoice Verification for second subcontracting purchase order (MIRO).
