SAP AG Subcontracting: Overview

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Subcontracting: Overview
This document gives you an overview of subcontracting in the R/3 System. It comprises the following
sections:
Basic terms
BOM explosion
Transfer posting to SC stock
Goods receipt
Materials planning
Subcontracting monitoring list
Special topics
Tables and programs
Basic Terms
Subcontracting (SC)
In the SAP System, the term "subcontracting" describes the process of procuring a material from an
external supplier (the subcontractor) who, however, requires certain components (provided by either
the ordering firm or a third party) to manufacture this material.
Bill of Materials (BOM)
A bill of materials is a list of the components that are provided to the subcontractor, together with
details of the relevant quantities. The quantities may be negative, in which case by-products are
involved (these are products created during the manufacture of the ordered product and which are
returned to the ordering firm). The ordered item to which the BOM belongs is sometimes also referred
to as an "assembly".
ltem Category "Subcontracting"
A subcontracting item is denoted by the item category Subcontracting (identifier L, represented
internally by the number 3). The item category must have previously been entered as "allowed" for the
document type used (Customizing, document types). SC items may occur in requisitions, purchase
orders, and scheduling agreements. When we refer to "subcontracting (SC) purchase orders" (also
termed "subcontract orders") in the following, we also mean SC requisitions and SC scheduling
agreements wherever appropriate.
In the standard SAP System, this item category is not defined for requests for quotation (RFQs) or
contracts. However, you can also enter SC items in an RFQ or a contract by copying the field
selection keys PT0A and/or PT0K to create the keys PT3A and/or PT3K respectively. In this case,
however, no BOM explosion is carried out and no component screen is offered.
In the case of the SC scheduling agreement also, a BOM explosion is not carried out until delivery
schedule lines are created (ME38). You cannot enter or display any components from within
transactions ME32L or ME33L.
In purchase requisitions, the components are assigned to the requisition item, whereas in purchase
orders (POs) and scheduling agreements the BOM is attached to the schedule line (that is to say,
different schedule lines for the same item may have different BOMs). This does not usually occur in
purchase orders, but in the case of long-running scheduling agreements the BOM may change in the
course of time.
Notes:
21697 Termination of ME028 When Creating RFQ with Item Category L.
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SC lnfo Record
The price for a material procured on a subcontracting basis can be stored in a subcontracting info
record. In the source determination process for a subcontracting item, only SC info records and SC
scheduling agreements are taken into account.
SC Stock Segment
Stocks of components provided to subcontractors are managed in a separate stock segment with the
key "material, plant, vendor (and batch)" (SC stock). SC stock is part of the unrestricted-use stock
belonging to the ordering firms own plant. (It can nevertheless be excluded from availability checks,
for example.) You can view the SC stock situation by calling up the stock overview (transaction
MMBE). When doing so, set the Also select special stocks indicator. Double-click on the Stock prov.
to vendor line to get a breakdown by vendor. (You can also display the stocks using transaction
ME2O see below.) Negative quantities can also be allowed for SC stocks (Customizing, Inventory
Management, Goods issue/Transfer posting -> Allow negative stocks, choose the Plant level,
transaction OMJ1).
Third-Party (Triangular) Subcontracting
In this case, the necessary components are provided to the subcontractor not by the ordering firm's
own plant but by a third party, another external supplier. A third-party SC order contains an order item
of the category Standard above the components and is issued to the external supplier A. The
subcontractor B is entered in the Vendor field in the delivery address and the Subcontracting vendor
indicator set. In the case of a goods receipt against such a PO, the relevant component is posted to
the stock of material provided to vendor B. As of Release 4.0, third-party SC requisitions are also
available, and as of Release 4.5 such requisitions can also be generated via Materials Planning
(section MRP Areas below).
Release Notes:
3.0A Purchasing -> Purchase Orders: Subcontracting/Third-Party Order
Notes:
120163 Message to Subcontractor for Third-Party SC Order
BOM ExpIosion
Normally, the list of components to be provided to the subcontractor is not entered manually, but is
already stored in the system as a master BOM (Logistics -> Production -> Master data -> Bills of
material -> Bill of material -> Material BOM -> Create/Change/Display; transactions CS01, CS02,
CS03).
If just one BOM exists for a material, this is drawn when you create a subcontracting item. You can
view the components (and change them, if necessary) via Item -> Components -> Overview. In order
for a BOM item to be taken into account in the explosion, the Relevant to production indicator must
have been set, but the Material provision indicator must not be set. You can access both indicators in
the BOM transaction via Goto -> Item -> Status/Long text. The Material provision indicator, especially,
is sometimes erroneously set to L.
Alternative BOMs
If several alternative BOMs exist, there is no possibility of selecting the desired BOM interactively.
Instead, selection can be controlled via the following mechanisms:
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Selection by quantity: A lot size interval for which the BOM is valid can be entered in the BOM
header. A prerequisite is that the Selection method indicator is not set in the material master
record (MRP 4 view).
Selection by date: Can be set in the IMG under Production -> Basic Data -> Bill of Material ->
Alternative Determination -> Define Alternative Determination for Multiple BOMs (transaction
OS32). A prerequisite is that the Selection method indicator the is set to 1 in the material master
record (MRP 4 view).
Selection by production version: Can be used if the same material has different BOMs with
different suppliers. You create different production versions in the material master record of the
assembly (pushbutton in MRP 4 view) and assign an alternative BOM to the versions on the detail
screen. You then enter the valid production version in the info record in each case.
If no selection mechanism has been defined and several alternatives exist, the first one found is
drawn.
Release Notes:
3.0B Purchasing -> General: BOM Determination in Subcontracting Items
Notes:
13023 Why was a BOM not Exploded?
27169 Subcontract Order: Rounding Error in Component Quantity
81200 Incorrect Requirement Dates in Subcontract Orders
83085 BOM from PReq is Exploded Again in Purchase Order
90632 ME38 ME22 BOM Explosion of Schedule Lines
123961 ME21 Bill of Material is not Exploded
New BOM Explosion
If the BOM is changed in the master data for a certain material, the BOM can be updated in purchase
orders for which no GR has yet taken place. This is done via the menu option Item -> Components ->
New BOM explosion. The function can also be used if the BOM has been changed manually and you
wish to revert to the original BOM.
Notes:
16029 "New BOM Explosion" - Error Message
Components from Another Plant
Although the BOM item contains a plant, the latter cannot be maintained when the BOM is processed.
During the explosion process, the plant for which the BOM has been created is always assigned to
the components. By means of a trick, you can cause a different plant to be drawn at the time of
explosion. A special procurement key for which the Withdr. altern. plant indicator is set in Customizing
is assigned to the relevant component in the material master record (IMG: Production ->
Requirements Planning -> Master Data -> Define Special Procurement Type, transaction OMD9).
Transfer Posting to SC Stock
Subcontracting stocks (stocks of material provided to the subcontractor) are built up through transfers
from "restricted-use" stock (transaction MB1B, movement type 541, transfer posting from Restricted to
Subcontracting). This can be done manually, with reference to an SC order (function To purchase
order...) or via the SC stock monitoring list (see below).
Note: Since there is no order-related SC stock (as in R/2), transfer postings can be carried out as
often as you like with reference to one and the same purchase order. The link to the purchase order is
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merely an entry aid for the components. In particular, no PO history records are written in the case of
such transfer postings.
Notes:
76823 MB1B Subcontract Order: Sign Display not Possible
84505 MB1B: Negative Components are Proposed
133427 MB1B Components Grouped Together from Different Plants
Goods Receipt
In the event of a goods receipt against an SC order, the system suggests the components to be
booked out (with movement type 543; for by-products, where an inward movement is involved,
movement type 545 is suggested). If there is only one delivery schedule line, the suggested (default)
quantity is proportional to the GR quantity. The case where the GR covers several delivery schedule
lines and different BOMs exist is more complicated. The precise logic behind the default quantities is
described in Note 110158.
The default quantities can be changed manually prior to posting (if the subcontractor has used more
or less of the material provided, for example). In particular, they can be set to 0. This is done, for
instance, if no SC stock exists. The components must then be booked out subsequently (see below).
The quantities withdrawn are updated in the reservation when the GR is posted. These are basically
proportional to the GR quantity. A manual change to the quantity used or consumed has no effect.
Example: GR of 100 pc of material A; the BOM contains 10 pc of material B. However, only 9 are
booked out because the subcontractor did not use more. The quantity withdrawn is nevertheless
updated by 10 since otherwise a residual requirement of 1 pc would be left and would appear in the
stock/requirements list (wrongly, because the requirement de facto no longer exists).
Components are also suggested for posting back to the relevant stock in the case of a GR reversal or
a return delivery (movement type 544 or, for co-products, 546). Again, refer to Note 110158 for the
logic behind the default quantities.
The consumption/usage figures for components are updated in the PO history (transaction/event key
7) and can be displayed in list form from the basic PO history list via Views -> SC consumption.
After a goods receipt, the BOM in the purchase order can no longer be changed. This is because no
reasonable default quantity could otherwise be determined in the event of a reversal. In the case of a
partial goods receipt, you can get round this as follows: you can reduce the scheduled quantity (as
per the schedule line) to the GR quantity and enter a new schedule line covering the remaining
quantity. You can change the BOM in this new schedule line.
Subsequent adjustment (transaction MB04): If it transpires that the subcontractor has used more (or
fewer) components than planned, or if no components were booked out at the time of goods receipt
due to lack of stock (see above), you have the option of booking out components retrospectively using
the "subsequent adjustment" facility. No default quantities are provided in this case.
Notes:
81928 SC Order: By-Products Posted as Outward Movement
109939 Display of PO History for Components in Different UoM
110158 New Proposal Logic for GR for SC Scheduling Agreement
120306 MB01 Rounding When Proposing SC Components
132835 Subcontract Order: Problems During Reversal or MB04
Valuation at the time of GR: The value of the finished product, which is debited to the material
account, comprises the value of the SC order (that is, the price for the processing/assembly work,
normally stored in the info record) and the material/component costs. Example: The manufacture of
product P by vendor L from the components K1 and K2 (1 pc of P from 1 pc of K1 and 3 pc of K2)
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costs 50.00 per pc. If a GR of 1 pc of P is recorded, the value of the stock account increases by 50 +
10 + 3 x 5 = 75.
MateriaIs PIanning
Generation of SC Requisitions or SC Scheduling Agreement Schedule Lines
via MRP
If a material is procured externally and supplies are planned automatically, you can stipulate via the
special procurement key in the material master record that SC requisitions or (if an appropriate source
list entry exists) SC scheduling agreement schedule lines are generated in the course of the planning
run. For the special procurement key, the Special procurement indicator must be set to L for
subcontracting.
At the time of the MRP run, a BOM explosion is also carried out. However, requisitions are also
generated even if no valid BOM exists the components are then missing (see "SC Items Without
Components" below).
SC Requirements in the Stock/Requirements List
The requirements of components in a plant arising through SC orders (sometimes also referred to as
dependent requirements) can be displayed in the stock/requirements list (transaction MD04). They
can be identified through the MRP element LB-BED. By double clicking on the line, you can display
the document behind the requirement (planned order, requisition, purchase order, scheduling
agreement).
Notes:
104270 Requirement in the Incorrect SC MRP Segment
Planning of SC Stocks
As of Release 4.5, so-called "MRP areas" enable you to carry out separate requirements planning for
SC stocks. An MRP area can cover a plant, one or more storage locations, or an SC stock. The
following settings are necessary:
In Customizing, you must activate the MRP areas at client level (IMG: Production ->
Requirements Planning -> Master Data -> Define MRP Areas -> Activate Requirements Planning
for MRP Areas, transaction OM01).
In the subsequent workstep "Define MRP Areas" (transaction OMIZ), you can then define an MRP
area of the category 03 (vendor) for each subcontractor/plant.
When MRP areas have been activated, the pushbutton MRP areas appears in the MRP 1 view of
the material master record. The MRP parameters must also be maintained for the individual MRP
areas in the material master record. In particular, you can stipulate via the special procurement
key whether supplies of the SC stock are to be maintained through transfers from your own plant
or through deliveries by an external supplier (via third-party subcontracting orders).
If MRP areas are active, the planning run or the stock/requirements list is invoked for each MRP area.
Depending on the setting in the material master record, the MRP run generates either stock transfer
reservations (planned transfer postings to SC stock) or third-party SC requisitions for an SC MRP
area.
Release Notes:
4.5A Requirements Planning -> Planning Execution:
Requirements Planning with MRP Areas
MRP Area: Subcontracting/Third-Party Processing
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Subcontracting Monitoring List
The subcontracting monitoring list (which can be accessed in Purchasing under Purchase order ->
Reporting -> SC stocks per vendor, transaction ME2O), gives you an overview of subcontracting
stocks (stocks of materials with subcontractors) grouped by vendor, material, plant. You can see the
current stock figures and which outward movements are to be expected due to open SC orders. As of
Release 4.0, inward movements stemming from open deliveries are also shown (see below). As of
Release 4.5, planned receipts through stock transfer reservations and third-party SC orders or
requisitions and outward movements through open SC requisitions are additionally shown.
The report is documented, with a link to the documentation in MM Inventory Management.
Via the list, the user can do the following:
Post a transfer of components from unrestricted-use stock to SC stock (Post Goods Issue
function)
Create a delivery for the components in SD (as of Release 4.0).
When the GI for the delivery is posted, the components are booked out of "unrestricted-use" stock
and into "SC" stock.
The following pre-settings are necessary before you can create an SD delivery:
A sales organization, a distribution channel, and a division must be assigned to the plant from
which the components are to be delivered (Customizing for Purchasing: Purchase Order -> Set up
Stock Transport Order -> Plant, transaction OMGN).
The components must be created for the sales organization, the distribution channel, and the
division of the supplying plant.
A customer (a/c payable, or debtor) record must be assigned to the SC vendor in the latters
master record. This record must be created for the sales organization, distribution channel, and
division of the supplying plant.
A delivery type must be entered for the provision of components to the subcontractor (Purchasing
IMG: Purchase Order -> Set up Subcontract Order, transaction OMGM). Delivery type LB is
available in the standard system. The Preceding document required indicator must be set to L for
this delivery type in Customizing for Shipping (Deliveries -> Define Delivery Types, transaction
0VLK). Furthermore, a partner schema containing the partner role Vendor should be assigned to
the delivery type (Shipping IMG: Basic Shipping Functions -> Partners -> Partner Determination -
> Define and Assign Partner Determination Procedures, transaction VOPA).
A shipping point must be assigned to the combination "shipping condition" (from the
customer/debtor master record assigned to the SC vendor), "loading group" (from the material
master record of the component), and "plant" (Shipping IMG: Basic Shipping Functions ->
Shipping Point and Goods Receiving Point Determination -> Assign Shipping Points, transaction
OVL2).
The system generates a log both in the case of a transfer posting and when a delivery is created. In
Release 4.0 this log can be displayed from the list via Environment -> Goods issue -> Processing log.
As of Release 4.5, it is displayed to the user immediately after the GI or deliveries is/are posted. The
log contains useful messages (explaining why a delivery could not be created, for example). In
Release 4.0, the individual deliveries can be displayed via the Open deliveries function. As of Release
4.5, they appear directly in the list.
If stock transfer reservations are displayed, a GI or a delivery is generally posted with reference to the
reservations. The reservations are thereby cancelled out and disappear from the list. You can also
explicitly choose the reservations you wish to convert. (Selecting no reservations is the same as
selecting all reservations.) Note that when a delivery is created with reference to a stock transfer
reservation, the reservation is not closed with regard to materials planning until the GI for the delivery
is posted.
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Remarks concerning data selection for the report:
In the case of selection via the assembly, only those components that occur as dependent
requirements covered by an SC requisition or an SC purchase order in one of the selected
assemblies are listed. That is to say, a complete BOM explosion is not carried out for the assembly. If
there is currently no dependent requirement for a component, the latter will not found in selections via
the assembly.
The selection criteria additionally available up to and including Release 4.0 under the "dynamic
selections" facility are no longer supported as of Release 4.5 because, under certain circumstances,
they only filter out certain requirements and can thus lead to an inaccurate representation of the
stock/requirements situation. For the same reason, no authorization check is now carried out at the
time of document selection.
Release Notes:
4.0A Purchasing -> Purchase Orders: Delivery for Materials Provided for Subcontracting
4.5A Purchasing -> Purchase Orders: Monitoring of Subcontracting Stocks
Notes:
114724 Undesired Delivery Split (Deliveries of Components Provided for Subcontracting Work)
131707 ME2O Termination DYNPRO_CONVERSION When Posting Goods Issue
SpeciaI Topics
Subcontracting and Make to Order
It is possible to assign an SC purchase order to "make to order" (individual customer) or "make for
project" (individual project) production (in the standard system, with the account assignment
categories E and Q). Via the Individual/collective indicator in the material master record (MRP 4 view),
you can determine whether the components are to be withdrawn from SC stock (as in the case of an
unassigned SC order) or from individual customer or project stock. The details are explained in Note
68908.
Notes:
68908 Subcontract Orders Assigned to Individual Customers
69460 ME2O Components in Special Stock Offered
78165 WBS Element Not Written to Component
103912 Booking SC Components out of Sales Order Stock
121540 SC Order with Make-to-Order: ATP Check Components
Checking Availability of Components
If you switch from the component overview screen to the detail screen for a component, you can
confirm the availability of the component using the Availability check function. In the process, the
checking group is drawn from the material master record and the checking rule is derived from the
MRP group of the ordered part (in this connection, refer to Note 114547). The availability check must
be initiated manually. There is currently no means of initiating the check automatically.
Notes:
114547 Availability of Components: Incorrect Checking Rule
117807 Availability Check when Converting Subcontracting Requisition
121540 SC Order with Make-to-Order: ATP Check Component
SC ltems without Components
In the case of purchase requisitions that are generated by other applications, it may happen that an
SC requisition has no components. In the case of requisitions generated by MRP, this only occurs if
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no valid BOM could be determined. In the case of requisitions generated from sales orders or
networks, this is always the case. There are technical reasons for this: the function module that
generates the requisitions does not cater for subcontracting.
Although the missing components temporarily lead to wrong information with regard to requirements,
if the requisitions are speedily converted the missing BOM explosion is provided in the purchase order
(however, for this to happen, Note 127705 should be installed).
Notes:
76785 Subcontracting Requisitions and POs w/o Components
83854 Component w. SOBSL f. Stock Transfer/Subcontracting
102595 Subcontracting Requisitions Generated from SD/PS have no Components
116571 Outline Agreement Requisition with Item Category "Subcontracting"
127705 Conversion of SC Requisition w/o BOM: Error Message ME154
External Processing Operations with Subcontracting
As of Release 4.0, it is possible to make available the components for operations of the category
"external procurement" as SC components in production orders. To do so, you must set the
Subcontracting indicator on the external processing screen for the operation. When the order is saved
(or released), a subcontracting requisition without a material number, assigned to the production order
and having the operation components as "components to be provided" is created. The components
cannot be changed in the requisition. When the requisition is converted into a purchase order, the
components are copied and can then also be changed.
Release Notes:
4.0A Production Planning and Control -> Production Orders: Provision of Components for External
Processing
TabIes and Programs
Technically, the link between purchasing document and BOM is established through the pointer
RSNUM in the purchase requisition (table EBAN) or delivery schedule line (table EKET). The
components are in table RESB under the reservation number RSNUM and are numbered according
to the item number (RSPOS). In turn, the reservation points to the requirement source document via
the fields BELN, EBELP, EBELE (schedule line) or BANFN, BNFPO (requisition).
Further tables in connection with subcontracting:
MSLB SC Stocks
MAST Material to BOM Link
STPO BOM Item
VRSLI Index: Stock Transfer Reservation - Delivery
Programs:
The function group for component processing in Purchasing is EINK (most important function module:
ME_COMPONENTS_MAINTAIN). The function modules are invoked from the routines in the includes
MM06BFLB (requisition) or MM06EFLB (purchase order/scheduling agreement) (most important
routine: MDPM_MAINTAIN). The component screen is invoked from the detail screen in each case
via the module CALL_KOMPONENTEN.
The rest of the component processing (component screen, BOM explosion, update) is handled by
function modules from Requirements Planning, of which the most important are:
MD_AUFLOESEN_MDBA (BOM explosion)
MD_BEARBEITEN_KOMPONENTEN (component screen)
MD_HINZUFUEGEN_KOMPONENTEN, MD_VERAENDERN_KOMPONENTEN, ...
The associated function groups are M61Z, M61Q, and M61P.
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Further Programs
FB ME_READ_COMP_GOODS_ISSUE: Provision of Components (GI with Ref. to Purchase Order)
FB ME_READ_COMP_GOODS_RECEIPT: Suggestion of Components (GR against SC order)
Report RM06ELLB: SC Stock Monitoring List