1 Scheduling Agreement for Subcontracting Procurement Process

M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Scheduling Agreement for Subcontracting Procurement in SAP S4 HANA

The use of scheduling agreements can shorten processing times and reduce the amount of
paperwork you are faced with. One delivery schedule can replace many discrete purchase orders or
contract release orders.

A purchase requisition of type Outline Agreement Requisition can be created with subcontracting
line items (Item Category – L Subcontracting) manually by a requestor. The purchase requisition can
be converted into a scheduling agreement or else we can create manually . The scheduling
agreement is subject to approval based on predefined parameters before you generate delivery
schedule or schedule lines (manually or via MRP run) and communicate them to the subcontractor.
With the supply of the finished material, the goods receipt is created. The invoicing process is then
triggered.

Let’s see the process

Here, 100 Anil Trading Steel Pvt Ltd is my sub-Contracting Vendor

➢ Create Finished Product Via MM01 (i.e., Finished by Sub-Contractor)

Must be select all MRP Views, and at MRP View 2: Special Procurement: 30

MRP View -4
2 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Material 7501141: WNRF Flange 10" CL150# SCH 40 SA105

➢ Create Raw Material Via MM01 (i.e., We need to provide to the sub-contract vendor to get
finished Goods)

Material 7501142: Ms Square Bar 100 mm SA105

➢ Create Info-Record for Sub-Contracting material with Info-Category – Subcontracting via
ME11

Here, must need Info-record, why because net price will not allow the manually at scheduling
agreement without release (LP).
3 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Here, I have saved with machining /service charges Rs.8 and also tax code: M0

Purchasing info record 5300000761 5000 L 5001 created

➢ Create BOM Via CS01

Creating BOM for material 7501141

4 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Create Production Version for Sub-Contracting Material Via C223 or program

(CS_BOM_PROVDER_MIGRATION)

T code : SE38 Program : CS_BOM_PRODVER_MIGRATION

Select line, and then click on Approve all

5 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Now check whether production version created or not via MM02/MM03 at MRP View -4

Look here, production version has been created.

➢ Create scheduling agreement for subcontracting manually Via ME31L or convert from PR

Agreement Type: LP

Scheduling Agreement created under the number 5500000027

6 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Generate delivery schedule manually Via ME38 or by MRP run

Select the line item, and next go to Item -→ Delivery schedule

7 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Position the cursor on a schedule line and choose Item Component Overview to display the
screen for processing components. You can enter or change the individual components in the same
way as an order item.

Here, we can see the child components for each delivery schedule
8 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Enter the quantities and dates.

If the ordered material has a bill of material, the components are copied from the bill of material.
If you do not use bills of material, you must either enter the components manually or refer to an
existing purchase requisition. You have to enter the components for every delivery schedule.

Scheduling Agreement 5500000027 & Print scheduling agreement via ME9E

➢ Create post goods issue Via ME2O

9 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Look at here, for each finished good we need to spend approx. 1000 kgs of raw material and those
will give to the subcontract vendor

Here, I have sent 4000 kgs of raw materials to the sub-contractor at a time, so he able to supply as
on my delivery schedules
10 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Material Document list Via MB51

➢ Check the Stock Via MMBE

Look at here, I have provided raw material of 4000 kgs

11 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Post goods receipt Via MIGO to receive the finished product

Enter the schedule agreement number

Here, we just get the confirmation from subcontracting vendor how much quantity of raw material
he has utilized from among them. So here we need to enter the manually after getting confirmation.
Otherwise, it’s taken full quantity from BOM.

Let’s suppose, he has utilized 900 Kgs from given 1000 kgs.
12 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

Material document 5000001751 posted

➢ Check the stock via MMBE for Raw Material

Among 4000 kgs sub-contracting vendor utilized 900 kgs for 1st delivery schedule of 50 number
13 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Check the stock via MMBE for Finished Product

➢ Create supplier invoice Via MIRO

Schedule agreement number

Document no. 5100000524 created

14 Scheduling Agreement for Subcontracting Procurement Process
M.Jayababu(SAP MM /S4 HANA Sourcing and Procurement Consultant)

➢ Now check the status of Delivery schedule Via ME38

1st delivery has completed

Benefits

Reduce effort for discrete purchase order creation

Increase the automation of delivery schedule generation and accuracy of planning with MRP run

Enable suppliers to plan and allocate their resources more efficiently with long term planning

Name: M. Jayababu (SAP MM / S4 HANA Sourcing & Procurement Consultant)

e-mail id: jayababu1010@gmail.com