How to do Subcontracting process cycle in SAP with planning run

1. Pre requisites: Master data setup for subcontracting

a. Material Master

T code: MM02
For subcontract material (Header material/ Finish material) use “special procurement
indicator” – 30 (Subcontracting) IN material master, MRP2 Tab.

b. Info record
T code: ME11
Create an info record for the subcontract material (Header material) with info type “Sub
contracting”.

Maintain subcontracting price in “purch. Organization data 1” section “Net price” field
as shown below.

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 c. Source List
T code: ME01
Create a source list for subcontract material with the info record created in the previous
step. Keep the MRP relevant indicator as 1 to consider this source to planning run
(MRP).

d. Create BOM to link subcontract material to component material

T code: CS01
Enter header material (Sub contract material), Plant and BOM Usage 1- Production as
shown below. Hit Enter key.

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 Enter component material, quantity and click enter key. Hit to save BOM.

2. MRP run (Planning run) and Purchase requisition creation.

Use T code: MD02 (Single item multi-level), MD03 (Single item single level) for MRP run for the
material.
NOTE: In material master for subcontracting material- MRP1 Tab: I used MRP Type VB (Re order
point planning) and a reorder quantity of 100 to create a demand for 100 quantity. After MRP
run system should generate a purchase requisition for 100 quantity from subcontract material
to fulfill above requirement.

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 After MRP run is done go to the T Code: MD04 (Stock requirement list) to check the purchase
requisition.

Double click on purchase requisition and following screen will be appeared.

Select to view the purchase requisition in change mode.

Purchase requisition will be display with Item category – L (Sub contract).

3. Convert and create a purchase order

Purchase requisition can be converted to a purchase order either in MD04 (Stock requirement
list) or ME21N (Purchase order create).
Double click on the purchase requisition in MD04 and following screen will be appeared.

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 Click on to convert purchase requisition to purchase order.

Drag and drop the requisition number to the to pull purchase requisition data to purchase
order as shown in the bellow screen.

Complete the additional data and click to save the purchase order.

Overview of subcontract purchase order. Purchase order can be open again in ME22N (Change
mode) or ME23N (Display mode)

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 Purchase order item category is L- Subcontracting. Components will be shown
in item details level “Material detail” tab. Click on “components” to vise component details.

Component material and requirement quantity details will be shown as bellow.

4. Check Component stock

Click to run the MMBE stock report.

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 250 quantity of component stock is available in storage location 0001.

5. Issue component goods to subcontractor

T code: ME2O
Menu path: Purchase Order →Reporting → SC Stocks per Vendor

Enter vender code and click

System display current stock of 251 from the component material and requirement of 200 for
the vender.

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 To issue the components to subcontract vender tick and select the material and click on

Click to confirm.

Above massage will be displayed to confirm posting is complete. Click to confirm. Click on

to check the component stock overview.

200 quantity from the component material will be shown as “Stock provided to vender” as
shown below.

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 6. Post the Goods receipt for the subcontracting Purchase order
Receive a partial delivery of 50

T code: MIGO
Menu path: SAP Menu → Logistics → Materials Management → Inventory Management →
Goods Movement → Goods Movement (MIGO)

Select Goods receipt, Purchase order and enter the subcontract purchase order number. Keep
the MOV 101. Hit Enter.

Go to “quantity Tab” and enter the receipt quantity as 40. Change the component quantity as
80.

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 Tick the in the bottom of the “Material” Tab. Click to check for
errors and click to post the goods receipt.
MOV 101 has happen for header material (Finished product received from subcontractor) and
MOV 543 has happen automatically for the component material.

40 qty from finish product material has come to the stock in MMBE stock report as shown
bellow

80 qty from the component material stock “provided to vender” has been reduced in the stock
report for the component material.

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