Outsourced Manufacturing in ERPOperations

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In-Time Component Consumption (incl. WIP Cost Tracking) 1

In-Transfer Stock for Subcontracting 3

Direct Provisioning from Another Plant 4

Subcontracting Monitor 5

Inbound Delivery with Component Information 7

Material Number Tracking of External Operations 9

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1 In-Time Component Consumption (incl. WIP Cost Tracking)

Description

The new functionality allows you to post the consumption of subcontracting components separately fromthe goods receipt. As soon as the subcontractor provides the information that they have used a certainquantity of components in the production process, these components can be booked out in the ERPsystem.

Customers need to decide and (and define in Customizing) whether separate consumption postings arepossible for given supplier-material combinations. If so, separate consumption information is alwaysexpected in this process (that is, the goods receipt and the consumption postings are always decoupled inthis process variant). Additionally, a cost object is needed to track the WIP costs. Per default, a COproduction order is used (created automatically when saving the purchase order) to collect the materialcosts of the components.

Preparation

- You have activated the Purchasing and Inventory Management functions in your ERP system andcreated master data for vendors, materials, and info records.

- You have set the CO order flag in the info record.

Execution

1. Create a subcontracting purchase order.

2. Provide the components to the subcontractor.

3. Maintain the component consumption in transaction MIGO (Goods Issue->Purchase Order).

4. Display the corresponding CO production order for your purchase order. It shall contain the materialcosts of the consumption posting executed before.

5. Post the goods receipt for your purchase order.

6. Additionally post partial goods receipts to check if the system correctly manages the componentconsumptions.

7. Additionally post the component consumption after the goods receipt. This simulates situations inwhich the subcontractor forgot to send the consumption information in time (or there were othertechnical issues in the communication with your subcontractor).

Check

- Check each of the steps to ensure that the functions work properly.

- Check the component consumption in report ME2SC.

- Check that the correct documents are displayed and check the navigation to the individualdocuments. In particular, check that the material costs are displayed in the CO production order andthat these costs are settled after goods receipt.

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- Check the stock overview after the goods movements.

- Check that the goods receipt is always posted correctly.

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2 In-Transfer Stock for Subcontracting

Description

With this functionality, customers can now track subcontracting components to establish whether they arestill on the road or have already been delivered to the subcontractor.

Preparation

You have activated the Purchasing and Inventory Management functions in your ERP system and createdmaster data for vendors, materials, and info records.

Execution

1. Create a subcontracting purchase order.

2. Post the components to the subcontracting in-transfer stock using the transactions MIGO and ME2O.

3. Post the components from in-transfer stock to subcontracting stock.

4. Change the quantity in the second goods movement to see how the system manages the process.

Check

- Check the stock overview transactions (MMBE, MD04) after each step to see what happened withthe components.

- Check the system reaction when changing the quantity in the second goods movement.

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3 Direct Provisioning from Another Plant

Description

With the current business function, it is now possible to transport components directly from another plantto the subcontracting stock of the target plant. The whole process can be monitored using a stock transportorder.

Preparation

You have activated the Purchasing and Inventory Management functions in your ERP system and createdmaster data for vendors, materials, and info records.

Execution

1. Create a stock transport order.

2. Specify a vendor and set the SC Vend checkbox on the Delivery Address tab page.

3. Post the transfer of the components with reference to the purchase order using the MIGO or ME2Otransactions. Use an outbound delivery to manage the transfer process.

Check

Check the stock overview transactions (MMBE, MD04) before and after the goods movement.

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4 Subcontracting Monitor

Description

The new subcontracting monitor provides improved usability and new features with which to execute thesubcontracting process steps.

Preparation

- You have activated the Purchasing and Inventory Management functions in your ERP system andcreated master data for vendors, materials, and info records.

- The following documents can be processed and tested in the new subcontracting monitor:

- Purchase orders

- Purchase requisitions

- Outbound deliveries with open goods issue

- Reservations

- External deliveries (components provided by third-party vendor)

- You have ensured that some of these documents already exist in the system.

Execution

1. Execute transaction ME2ON and specify some selection criteria, for example vendor number orplant.

2. Transfer components in ME2ON to your subcontractor using goods issues and deliveries.

3. Try to delete reservations.

4. Select several component lines for one material number (or for multiple materials) and post a goodsissue or an outbound delivery.

5. Post some of the component to SC in-transfer stock first.

6. Post components from SC in-transfer stock to subcontracting stock.

7. Sort the list output according to different fields.

8. Access certain POs, deliveries, and so on directly from the content table.

9. Export the list output content to Microsoft Excel.

10. Refresh the list output after executing goods issues or deliveries.

Check

- Check that components are transferred correctly to subcontracting stock or SC in-transfer stockusing ME2ON and stock overview transactions.

- Check that traffic lights have been set correctly for each component section.

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- Check that the refresh functionality works correctly.

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5 Inbound Delivery with Component Information

Description

Many customers use delivery documents to manage the inbound delivery process. When receiving therequested products from the subcontractor, ERP inbound deliveries can now store information aboutwhich component batches were used to produce the finished product. This information is either enteredmanually in the ERP inbound delivery or automatically sent by the subcontractor using an IDoc or anXML message.

Preparation

- You have activated the Purchasing, Inventory Management and Logistics Execution functions inyour ERP system and created master data for vendors, materials and info records.

- The subcontracting components are batch-managed.

- The system contains subcontracting purchase orders with an expected inbound delivery.

- Several components have been placed to subcontracting stock.

Execution

1. Create an inbound delivery for a subcontracting purchase order. Also create several inbounddeliveries for a certain subcontracting purchase order.

2. In the component overview of the inbound delivery the system defaults the components from thesubcontracting purchase order. Display all batches for the components that are currently insubcontracting stock.

3. If component batches are already entered in the purchase order: Try to select a (different) batch inthe component overview!

4. Try to split an existing component line to enter another batch number for this component (as aprerequisite, the new batch number must also exist in the vendor's subcontracting stock).

5. Try to delete an existing component line.

6. Save the inbound delivery.

7. Post the goods receipt for the inbound delivery.

Check

- Check that each function within the component overview works properly.

- Check that the relevant components are displayed.

- Check that only the relevant batch numbers are displayed in the stock overview within thecomponent overview.

- Check that the goods receipt posts exactly the batch numbers specified in the inbound delivery.

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6 Material Number Tracking of External Operations

Description

For customers using the External Processing scenario, it is now possible to track and monitor theoutsourced production operations at material number level. This is made possible by a new BAdI with anexample implementation. When activating the BAdI, the current example implementation transfers theheader material number of the production order to the subcontracting purchase requisition.

Preparation

- You have activated the Purchasing, Inventory Management and Production Planning functions inyour ERP system and created master data for routings, BOMs, vendors, and info records.

- You have activated the Define Purchase Requisition Header Material(PP_OM_BD_BANF_HEADER_MATERIAL) BAdI. For information on how to implement thisBAdI, see the PP_OM_BI_BANF_HEADER_MAT_DEMO example implementation.

Execution

1. Create a routing for a certain material containing at least one external operation. Set up the externaloperation as a subcontracting operation.

2. Create a production order for the material in question.

3. Release and save the production order.

4. Perform the process as well with process orders.

Check

- A subcontracting purchase requisition should have been created automatically when releasing/savingthe production order.

- The header material number should have been transferred to the purchase requisition item line.

- Check that this purchase requisition item and purchase order item is not considered in MRP andATP.

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