Pegging material supply lines for operation and item subcontracting

For project pegged production orders, operations can be subcontracted. The material delivered to the subcontractor can be project pegged or anonymous. The subassemblies that are sent and retrieved are always project pegged. Costing breaks can apply to direct the costs of the subcontracted operation to a specific project cost account. If (production material) costing breaks are used, a purchase order line's peg can differ from the peg on the material supply line.

For item subcontracting, the subcontracted purchase orders can include materials that inherit the project pegs, or can include anonymous materials. The pegged materials are stored in inventory and are shipped to the subcontractor with project pegged orders.

In case of a project pegged order, a peg distribution is linked to the Purchase Order Material Supply Line in the Purchase Peg Distribution (tdpur5100m000) session. For a specific purchase order line (detail) and material sequence, the material supply line's Order and Consumption quantities are distributed across the peg distribution lines for combinations of project/budget, project element, and/or project activity. The peg information in the Purchase Peg Distribution (tdpur5100m000) session includes the line number for the peg in the distribution, the peg (project, element, activity), and the material supply line quantity by peg. The peg distribution cannot be manually created and must always be generated using the parent.

For operation subcontracting, the purchase order line, the material supply line, and the linked peg distributions are generated by Job Shop Control and can only be updated by Job Shop Control.

For item subcontracting, the purchase order line, the material supply line, and the peg distributions are generated by Procurement. A material supply line's peg distribution can be updated only from the parent, that is the purchase order line, the purchase order line peg distribution, or the material supply line. If a purchase order line's distribution line is changed, and no quantities are received or consumed yet, the pegged fields on the linked material supply lines are synchronized to the updated distribution line in the Purchase Order Material Supply Lines (tdpur4116m000) session. However, if a different quantity distribution is applicable, the quantities of the material supply lines' distribution lines are redetermined in the Purchase Peg Distribution (tdpur5100m000) session.

Consuming pegged components

If the Project Pegged Inventory check box is selected in the Purchase Order Material Supply Lines (tdpur4116m000) session, pegged consumptions are performed.

For operation subcontracting, consumptions are handled by Job Shop Control. For item subcontracting, consumptions are handled by Purchase Control. The consumptions are updated using backflushing, consumption messages, or through manual consumption.

  • Backflushing

    The distribution line number constitutes the link between the pegs of the received end item and the components that must be backflushed. Therefore, the received purchase order line-pegs are used to backflush the quantities of the material supply line-pegs.

  • Consumption messages

    If consumption messages are used to inform the manufacturer about the consumption of components, the subcontractor does not know whether the order is pegged.

    The total consumption quantity of the consumption message is assigned to the following levels, in descending sequence of priority:

    1. Priorities from Enterprise Planning, based on the planning details of the purchase order line receipt. The peg with the oldest need date is consumed first.
    2. Priorities from Enterprise Planning, based on planning data from Enterprise Planning. The peg with the oldest need date is consumed first.
    3. Distribution line number. The peg with the lowest distribution line number is consumed first.

  • Manual consumption

    If backflushing is used, you can manually adjust the consumed quantity of the material supply lines. The inventory is increased or decreased using the pegs.

    • Positive adjustment

      More components are used than calculated by the backflushing mechanism. The total adjustment consumption quantity is divided pro rata across the pegs.

    • Negative adjustment

      Backflushed inventory is returned to inventory.

      The adjustment quantity is distributed across the pegs, based on:

      1. Priorities from Enterprise Planning, considering the planning details for the purchase order line receipt: the peg with the lowest priority is returned to the inventory first.
      2. Receipt date: the peg with the latest receipt date is returned to the inventory first.
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