Service subcontracting in Procurement

The service subcontracting functionality enables purchase requisitions, requests for quotation (RFQs), and purchase orders to include subcontracted items.

Service subcontracting is supported with and without material flow. When purchasing subcontracting service activities from Depot Repair or Field Service, materials can be supplied to the subcontractor. In case of Depot Repair, also the complete item to be maintained (subassembly) can be supplied to the subcontractor.

Master data

Before you can generate subcontracting purchase documents from Service, you must specify the master data.

For more information, refer to Data setup for service subcontracting with material flow (Depot Repair).

Generating purchase documents from Service

Purchase requisitions and purchase orders with subcontracted items are generated from Service; either from a work order activity in case of depot repair, or from a service order activity in case of field service.

  • Depot repair

    A purchase requisition or purchase order is generated of origin Maintenance when the Activity Status of a work order activity changes to Released in the Work Order - Lines (tswcs2100m100) session.

    The purchase requisition or purchase order can include a cost or service item, or a purchased or manufactured item.

    If the Supply Item to Subcontractor check box is selected in the Reference Activities (tsacm1101m000) session, the (purchased or manufactured) item must be supplied to the subcontractor.

    If the Supply Material to Subcontractor check box is selected for the item in the Reference Activities (tsacm1101m000) session, materials must be supplied to the subcontractor for the item.

    You can view the supplied items and materials in the Purchase Order Material Supply Lines (tdpur4116m000) session.

  • Field service

    A purchase requisition or purchase order is generated of origin Service when the Activity Status of a service order activity changes to Planned in the Service Order (tssoc2100m100) session.

    The purchase requisition or purchase order always includes a cost or service item.

    If the Supply Material to Subcontractor check box is selected for the item in the Reference Activities (tsacm1101m000) session, materials for the item can also be supplied to the subcontractor. You can view these materials in the Purchase Order Material Supply Lines (tdpur4116m000) session.

Purchase requisitions
Step 1. Generating subcontracting requisitions

A purchase requisition can be generated from a work order activity, or service order activity.

For a subcontracted requisition line:

  • The Subcontracted check box is selected in the Purchase Requisition Lines (tdpur2502m000) session
  • The work order, the service order, the reference activity, and the material supply information are displayed in, or the details can be accessed using the Linked Requisition Line Data (tdpur2502s000) session
Step 2. Approving subcontracting requisitions

If the Submit Generated Requisitions Automatically check box is selected in the Purchase Requisition Parameters (tdpur0100m200) session, LN submits the generated purchase requisitions for approval. Note: if this check box is selected, the purchase requisition cannot be updated before approval. Updates can be made only if the requisition is rejected by the approver.

For more information, refer to Purchase requisition approval process.

Step 3. Converting subcontracting requisitions

An approved subcontracting requisition can be converted to a purchase order or an RFQ in the Convert Purchase Requisitions (tdpur2201m000) session.

The following is applicable:

  • If a suitable buy-from business partner and price are retrieved for the subcontracted item, the requisition can be converted to a purchase order.
  • If no suitable buy-from business partner or price can be retrieved or the price requires negotiation, the requisition can be converted to an RFQ.

If an RFQ is generated for a subcontracting requisition, you cannot delete the requisition before the RFQ is converted to a purchase order.

For more information, refer to Purchase requisition conversion process.

Requests for quotation (RFQs)

After a requisition with a subcontracted item is converted to an RFQ, the generated RFQ's origin is set to Requisition.

For a subcontracted RFQ line:

  • The Subcontracted check box is selected in the Request for Quotation Lines (tdpur1502m000) and RFQ Responses (tdpur1506m000) sessions
  • The work order, the service order, the reference activity, and the material supply information are displayed in, or the details can be viewed using the Linked RFQ Data (tdpur1502s000) session

The generated RFQ must be converted to a purchase order in the Convert RFQs (tdpur1202m000).

An RFQ line with the origin Requisition cannot be deleted before conversion. If more than one alternative is available for a line, alternatives can be deleted. However, the first alternative (alternative 0) must remain.

Purchase orders

Purchase orders lines with subcontracted items can be generated from Service or from a converted requisition or RFQ.

For a subcontracted purchase order line:

  • The Subcontracted check box is selected in the Purchase Order Lines (tdpur4101m000) session.
  • The work order, the service order, and the reference activity are displayed in the Purchase Order Line - Linked Information (tdpur4502s000) session.
  • The material supply information is displayed in the Purchase Order Material Supply Lines (tdpur4116m000) session, from which supply orders can also be generated. A warehouse transfer order, or sales transfer order must be generated to transfer the material from the component warehouse (supply-from warehouse) to the administrative warehouse (supply-to warehouse), which represents the subcontractor's warehouse.
  • If the item to be repaired (subassembly) is serialized, the item with the proper serial number can be sent to the subcontractor and received. As a result, the purchase order line and material supply line include the lot and serial information.
  • A subassembly can be owned by a customer. As a result, a purchase order line and material supply line support sending and receiving customer owned items.

After the purchase order is generated, the linked service order or work order is updated with the purchase order number and the buy-from business partner.

Receipts and consumptions

For a subcontracted item of the type Cost or Service, the receipts can be processed in Procurement or Warehousing. This is determined by the Release to Warehouse check box in the Item - Purchase (tdipu0101m000) session.

LN generates a trigger from Procurement or Warehousing, to Service on the receipt of the item.

Based on the receipt information, Service issues the materials from inventory and updates the consumed quantities on the material supply lines.

Service subcontracting prices

If a requisition is generated from Service and the Source of Price field is set to Reference Activity in the Items - Purchase (tdipu0101m000) session, LN defaults the purchase price from Service on the requisition line. After the requisition is converted to a purchase order, this purchase price is also defaulted on the order line and no discounts are retrieved.

If the Source of Price field is set to Price Book / Contract, price data is not defaulted on the requisition line. When the requisition is converted to a purchase order, the purchase price and discounts are retrieved for the purchase order line, based on the general search logic utilized for retrieving pricing information.

For RFQs, the requisition line price is defaulted as the Target Price in the Request for Quotation Lines (tdpur1502m000) session. After the requisition (with or without the price) is converted to an RFQ, LN overwrites the requisition line with the price and discounts, specified by the bidders on the RFQ response.

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