Sub Contracting Cycle (1) You have a material that can be procured externally, and you have maintained BOM

with components. Any waste generated and received during subcontracting process can be maintained as component with negative quantity. (2) You create a subcontracting PO (PO with Item Category L). You can also maintain Purchase Info Record for Subcontract category for material and subcontractor. (3) You make a transfer posting to issue components for SC PO. Material is sent to subcontractor. As material remains under your ownership, system does not make any value entry. But quantity is shown as "Material Provided to Vendor" (4) You receive finished material against SC-PO. You also specify components consumed in manufacturing of finished goods. Additionally, if you have negative components in BOM, now you'll also receive subcontracting by-products. There are three events, so three accounting entries are generated: DR FG Stock/ SC By-Product Stock CR Change in Stock (FG/ SC By-Product ) (for finished goods received) DR Subcontracting Charges CR GR/IR Clg (for moneys payable to Subcontractor) DR Consumption (Components) CR Change in Stock (FG/ SC By-Product ) (material provided to Vendor is now charged to expense) (5) You do the IV for SC Invoice, and the process is complete. Process of Subcontract in MM Sub-contract business process: You want to buy material from the supplier (processed material/ assembled item) , but for some reason (quality of certain item / price ) you will give some component to vendor . Vendor shall process the item / use the item provided & supplies the final item. SAP process: 1.Create the finished goods material code. 2. Maintain the BOM for the material. 3. Create PO with item category as "L”. 4. Issue material to vendor with movement type 541

and payment will run in FI. 4.( item category K).Consignment stocks are not valuated. Steps: 1.Consignment materials are settled through MRKO. 2. what process should i follow ? Consignment Process steps Consignment stock is special kind of stock .to plant in Enterprise assignments (IMG) 2. You enter purchase requisitions for consignment materials in exactly the same way as for other materials.. When the material is withdrawn it is valuated at the price of the respective vendor.The stock is lying at your storage location but the responsibility vendor . Create Info record for the material & vendor with info category consignment and maintain the price which will be used for the valuation and accounting entries.e Dyeing) has to be given to subcontracting. Info records with info category Consignment are created before creating the PO (you must maintain the consignment price for the vendor in an info record). Consignment Info record Activate in IMG material's management. 6.The price is required for material valuation and accounting purposes. 2. Create PO with item category K (consignment) 3. Creat Purchase Orders / Outline Agreements for Consignment Materials in the similar way (item category K). Maintain consignment process through consignment info record (ME11) 2. 3. Can anybody tell me how a process has to be given to subcontracting? Suppose. Assign Standard purchase org. MIRO to account for vendor's invoice for the service charge& material used by him.5. Goods receipt with 101 as its item Cat K it will not create the AC doc.. I have 3 operations 1)weaving 2)dyeing 3)cutting & packing if no 2 process (i. You can transfer stock to your storage location or goods issue for the consumption whatever may the case with movement 411 6. Vendor liability will arise at the moment when you are withdrawing the stock or transfer the stock to your own stock. OR The followings are the typical vendor consignment process steps: 1.Receive the material against the PO with movement type 101. 5. Perform goods receipt against PO (movement 101 through MIGO or MB01) from step ..

4. This will place the material into consignment inventory. The consignment settlement is based on the quantity of stock that was consumed (or transferred to company stock) in step 4. No account posting at this time since the material still belongs to the vendor.GI and IR are as follow. Alternatively. Goods Receipt: No Accounting Documents B. 5. Perform transfer posting (movement 411 special stock K through MB1B) on the material when the stock is ready to be transferred to company's own inventory. The account entries in GR.MRKO Consignment (Liability Account )Payable: DR.2.Goods Issues: Consumption A/C: DR. C. Vendor Account A/C: CR .Transaction Code . A. consignment stock can also be consumed by production order through movement 261 with special stock K.Consignment Settlement: . Consignment(Liability Account ) Payable: CR. Run transaction MRKO to settle consignment liability and pay the vendor. Think of this transaction as a self service invoice.

Sign up to vote on this title
UsefulNot useful