EXP_0007

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SAP AG 1999

External Procurement

External Processing

Subcontracting Without Controlling

Subcontracting with Controlling for ManufacturingOrders

Appendix: Contents

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External procurement

External processing

Subcontracting

At the conclusion of this unit, you will befamiliar with the process and costcontrolling of:

Introduction: Unit Objectives

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Introduction: Course Overview Diagram

AC510Introduction

Material Prod. OH Process

MaterialValuation

Preface

Product Cost by Order

Information System

Product Cost byPeriod

Schedule Manager

Appendix

Vendor

B: 40%A: 60%

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Introduction: Business Scenario

The manufacturing order contains components thatare procured from an external supplier.

Because of capacity problems in the paint shop, itwas decided to have a subcontractor perform thepainting operation. The subcontractor will be suppliedwith the required paint.

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Road Map: Outsourcing Parts and Services

SAP AG 1999

Outsourcing Parts andServices


External Processing

Subcontracting WithoutControlling

Subcontracting withControlling forManufacturing Orders

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Purch. Order

Order

SCL Item

Co.

Co.

Purchase OrderPurchase OrderPurchase Order

VendorVendorVendor VendorVendorVendor

Delivery

InvoiceInvoice Verification

InvoiceInvoiceInvoice VerificationInvoice Verification

VendorVendorVendor

InvoiceVerification

SCL Item

Co.

Co.

External Procurement for Nonstock Material

ManufacturingOrder

ManufacturingManufacturingOrderOrder

You are procuring the finished product from an external vendor. You can provide the vendor with the required parts.

When you post the goods receipt for the externally procured products, the goods issue for the provided part is posted simultaneously.

The invoice from the vendor is posted with reference to the delivery. A higher or lower consumption of the provided part can be taken into account at the time of the goods receipt and invoice receipt.

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Quantity Flow Pump Production

Value Flow

Pressure cover supplied by vendor

InvoiceDifferenceposted toorder

FI/COFI/CO

A

XX

B

XX

Goods Receipt

Act. costs postedCommit. canceled

FI/COFI/CO

A

XX

B

XX

Purchase Order

Commit. created

Purch. Req andPurchase Order

Item:Acct asgmt cat.F (order)

Comm-itment

Comm-itment

Shaft

Goods Receipt

GoodsReceipt

PressureCover

External Procurement - Process Flow

If the manufacturing order contains purchased parts, the system automatically generates a purchase requisition when the order is released.

If you have activated commitments management for the order type of the manufacturing order, the purchase requisition automatically posts a commitment for the manufacturing order. When the goods receipt is posted, the commitment is canceled and the costs in the purchase order are assigned to the order.

Any differences that arise when the invoice is posted are taken into account in the manufacturing order.

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External Procurement - Goods Receipt

Semifinished ProductsInventory

Semifinished ProductsInventory Change

Raw Materials Inventory Raw Materials ConsumptionGBB / VBR

VendorGR/IR

Clearing Account

External ProcessingFRL

( 1 ) Goods receipt for externally procured product - Valuation of raw materials 200

Price Difference

( 1 ) 200

( 1 ) 200

Acct Assignmt Mfg Order

The slide shows the posting of the goods receipt. The manufacturing order is debited with the costs of the externally procured material. The costs are determined on the basis of the valuation variant for the preliminary cost estimate of the order.

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External Procurement - Posting


Vendor

( 1 ) Goods receipt for externally procured material

- Valuation of raw material: 200

Price Difference

( 1 ) 200

( 1 ) 200

( 2 ) Invoice receipt - Invoice amount: 250

( 2 ) 200


( 2 ) 250

( 2 ) 50

Semifinished ProductsInventory Change

GR/IRClearing Account

Raw Materials Inventory Raw Materials ConsumptionGBB / VBR


Any price differences that arise when the invoice is posted are taken into account in the manufacturing order.

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External Processing



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External Processing

PurchaseOrder

Order

SCL Item

Co.

Co.

Purchase OrderPurchase OrderPurchase Order

VendorVendorVendor VendorVendorVendor

Delivery

InvoiceInvoice Verification

InvoiceInvoiceInvoice VerificationInvoice Verification

VendorVendorVendor

InvoiceVerification

SCL Item

Co.

Co.

External Processing

ManufacturingOrder


For external processing, you define the external service in the purchase order. You can send the materials intended for external processing to the vendor (provision).

When the goods receipt for external processing is posted, the goods issue for the provided parts is posted at the same time.

The invoice receipt is posted with reference to the goods receipt. Differences can be taken into account at this point (over- or underconsumption of the provided part).

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Purchaserequisition

Quantity % Conditions

$

Quantity % Conditions

$Info Record

Find source of supply

Info Record

?

Purch. Ord.

Price

Release

150.00

Further processing(goods receipt)

Invoice receiptInvoice10 units

170.00

External Processing - Process Flow

Operation 0030

Order HeaderOrder HeaderOrder Header

OperationsOperations

Control key PP02Indicator for externalprocessing +

Purch. info record 55000077Vendor PP-LIEFRequis. no. .......Target qty 1000Net quotation price 52

.

.

.

When you release a manufacturing order with external processing, the system automatically generates a purchase requisition.

The purchase requisition is of type NB (standard purchase order), which cannot be changed.

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Preliminary Costing - External Processing

Info RecordInfo Record

Standard value x Net quotation price = Production costs (planned)

ValuationVariant

ValuationVariant

Price Selectionfor External Processing

CostingVariantCostingVariant

Update ofOrder ValueUpdate of

Order Value

Routing

Op. 0030

Order categoryProduction

Order

The price used in the preliminary cost estimate for external processing is either the price in the operation or the price specified by the quota arrangement of the purchase order.

The control key in the operation determines whether the operation is relevant to costing.

The valuation variant specified by the costing variant determines which price is used to valuate external processing.

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External Processing - Goods Receipt

( 1 ) Goods receipt

- External processing costs: 300

( 1 ) 300

( 1 ) 300



VendorSemifinished ProductsInventory Change


Price DifferenceRaw Materials Inventory Raw Materials ConsumptionGBB / VBR


Account assignment for the costs of external processing is performed on the manufacturing order.

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External Processing - Invoice Receipt

( 1 ) Goods receipt

- External processing costs: 300

( 1 ) 300

( 1 ) 300


( 2 ) Invoice receipt - Invoice for external processing: 320

( 2 ) 320

( 2 ) 20*

( 2 ) 300






Price differences between the goods receipt and the invoice receipt also are updated to the manufacturing order.

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External Processing



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Subcontracting Without Controlling

Procurement

ProcurementProcurementProcurement

VendorVendorVendor

WarehouseManagement

WarehouseWarehouseManagementManagement

StorageLocation

Production atVendor

Production atProduction atVendorVendor

Deliveryof Processed

Material

Deliveryof

Components

InvoiceVerification

InvoiceInvoiceVerificationVerification

VendorVendorVendor

MRPMRPMRP

Order

SCL Item

Co.

Co.

StorageLocation

InvoiceVerification

SCL Item

Co.

Co.

For subcontracting, you define the external service in the purchase order. You can send the materials intended for subcontracting to the vendor (provision).



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Subcontracting Without Controlling - Goods Receipt

( 1 ) Goods receipt for subcontracted material - Standard price for subcontracted material 500 - Price valuation for raw material: 200 - Subcontracting costs: 300

( 1 ) 500 ( 1 ) 500

( 1 ) 200 ( 1 ) 200 ( 1 ) 300

( 1 ) 300






Posting the goods receipt of the subcontracted material results in the inventory for the provided part being charged off.

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Subcontracting Without Controlling - AccountAssignment

Subcontracted MaterialInventory

Subcontracted MaterialInventory Change

GBB / VBO

Raw Materials InventoryVerbrauch Rohstoffe

GBB / VBO

VendorGR/IR

Clearing Account

SubcontractingFRL

Preisdifferenz

( 1 ) 500 ( 1 ) 500

( 1 ) 200 ( 1 ) 200 ( 1 ) 300

( 1 ) 300

( 2 ) Invoice receipt - Invoice for subcontracting 320

( 2 ) 300 ( 2 ) 320

( 2 ) 20

Account grouping code VBO(consumption of provided parts byvendor) is used to post price differencesin subcontracting

Account grouping code VBO(consumption of provided parts byvendor) is used to post price differencesin subcontracting

( 2 ) 20*

( 2 ) 20*

Additional posting for subcontracting with price differences. Maintain tableT001K_LB -> price differences with subcontracting

Additional posting for subcontracting with price differences. Maintain tableT001K_LB -> price differences with subcontracting

( 1 ) Goods receipt for subcontracted material - Standard price for subcontracted material 500 - Price valuation for raw material: 200 - Subcontracting costs: 300

To post price differences with subcontracting, you must assign the accounts for account grouping code VBO in the context of account determination.

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Preliminary Costing - Valuation Variant

Change valuation variant

Subcontracting

Overhead on subcontracted materials

Priority Strategy sequence 1 Net order price 2 3

If you want to apply overhead to subcontracted materials, youmust create the appropriate cost elements. A special accountgrouping code must be used for the assignment of costs to theCO object.

If you want to apply overhead to subcontracted materials, youmust create the appropriate cost elements. A special accountgrouping code must be used for the assignment of costs to theCO object.

The check box Overhead on subcontracted materials enables you to include overhead in the costs of subcontracting.

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External Processing



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Subcontracting with Manufacturing Orders

ManufacturingOrder


StorageLocation

SubcontractingVendor

SubcontractingSubcontractingVendorVendor

Goods Receipt Service

Goods IssueProvided Parts

Procurement

ProcurementProcurementProcurement

VendorVendorVendor

Order

SCL Item

Co.

Co.

InvoiceVerification

InvoiceInvoiceVerificationVerification

VendorVendorVendor

InvoiceVerification

SCL Item

Co.

Co.

MRPMRPMRP

Delivery ofComponents

and Prov. Parts

For subcontracting, you define the external service in the purchase order. You can send the materials intended for subcontracting to the vendor (provision).



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BOM T-EX

Operation 0030: Masking, painting

...

100-804 Yellow paint(Eigenbearbeitung)

...

Routing T-EX...

...

Assignment

Subcontracting with Manufacturing Orders -Assignment of Part Provided

Change: Operation for pressure cover dropped.

Sub-contracting

Sub-contracting

For subcontracting when parts are provided and Controlling is performed on a manufacturing order, you make the following settings:

You use the control key to assign the external processing indicator to the operation that will involve subcontracting and provision of parts.

You assign the BOM item of the provided part to the externally processed operation.

The subcontracting costs are determined using the external processing data specified in the externally processed operation. You select the Subcontracting indicator so that the parts provided are included in the purchase requisition for subcontracting.

In MRP, or when a manually created production order is released, a purchase requisition is generated for the subcontracted operation.

When the goods receipt for subcontracting is posted, the goods issue for the parts provided is posted as well.

Repostings in Materials Management, such as reposting of unrestricted-use stock as vendor provision parts or goods issues for the components intended for subcontracting, is the responsibility of Logistics.

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Subcontracting with Manufacturing Orders -Process Flow

Provision ofParts

Subcontractingby Vendor

Paint

Goods Receiptfrom Vendor

Invoice

• Subcontracting: Painting by subcontractor

Purch. Req. andPurchase Order


GoodsReceipt


Actual CostsPaint

Price DifferencesAssigned to

OrderPlanned Costs

Component forSubcontracting

Painted pressure cover from subcontractor

Actual CostsSubcontracting

Goods Issue

• Paint

Quantity Flow

Value Flow

The planned costs for the manufacturing order can be calculated based on the following prices:

Price in accordance with purchasing info record

Price selected in accordance with price control in material master record (if stock material)

Price in accordance with entry in operation

The actual costs are assigned to the manufacturing order at the time of the goods receipt. These actual costs include the costs of subcontracting and of the parts provided.

Price differences between the goods receipt and the invoice receipt are updated to the manufacturing order.

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Preliminary Costing - Subcontracting

Info Record

Standard value x Net quotation price = Production costs (planned)

Valuation

VariantValuation

Variant

Price Selectionfor Subcontracting

CostingVariantCostingVariant

Update of

Order ValueUpdate of

Order Value

BOMBOM

Routing

Op. 0030

Paint(Yellow)

Paint(Yellow)

+ Material costs

= Total costs

Order categoryProduction

Order

You establish the parameters for calculation of the subcontracting costs using a strategy sequence for price selection. The basis is either the price in the purchasing info record or the price in the purchase order.

With subcontracting, the quota arrangement indicator determines the rules for selecting the vendor for costing. You select either the vendor with the highest planned quota, the vendor with currently lowest actual quota, or the cheapest vendor.

You can apply overhead to the subcontracting costs.

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Subcontracting with Manufacturing Orders -Goods Receipt

( 1 ) Goods receipt for service

- Valuation of raw material: 200 - Subcontracting costs: 300

( 1 ) 200 ( 1 ) 200 ( 1 ) 300

( 1 ) 300

Acct Assignmt Mfg OrderAcct Assignmt Mfg Order

Check the field status variant for movement type 543/O in table T156B.Additional account assignment for PP orders must be set to optional.





SubcontractingFRL

The subcontracting costs are assigned to the manufacturing order at the time of the goods receipt.

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Subcontracting with Manufacturing Orders -Invoice Receipt

( 1 ) Goods receipt for subcontracted material - Standard price for subcontracted material: 500 - Price valuation for raw material: 200 - Subcontracting costs: 300

( 2 ) Invoice receipt - Invoice for subcontracting: 320

( 1 ) 200 ( 1 ) 200 ( 1 ) 300

( 1 ) 300

Acct Assignmt Mfg OrderAcct Assignmt Mfg Order

( 2 ) 300 ( 2 ) 320

( 2 ) 20





SubcontractingFRL

Price differences between the goods receipt and the invoice receipt are updated to the manufacturing order.

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Explain the process of external procurement

Explain what external processing is

Describe the process of subcontracting both withand without Controlling for manufacturing orders

Explain which settings must be made for externalprocessing and subcontracting

You are now able to:

Introduction: Unit Summary

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Documents

vendor vendor sap ag

sap ag ac510

external vendor

vendor vendor vendor

order ficob

order type

manufacturing orders

purchase order item