To perform subcontracting without material flow support

In the subcontracting process without material flow support, the transportation of materials and subassemblies from the manufacturer to the subcontractor and the return of the completed subassemblies to the manufacturer are not registered.without material flow

Outgoing and incoming subassemblies are not maintained.

Consequently, the subcontracting purchase order line has no subassembly, but an administrative item of item type Subcontracted Service, and the subcontracting purchase order has no material lines.

A subcontracted service item is not a physical item. It has no standard costs, cannot be stored in inventory and thus it has no inventory valuation method.

If multiple operations are subcontracted, with more than one subcontractor involved, a purchase order is generated for each subcontractor.

The procedure for operation subcontracting without material flow similar to the procedure for operation subcontracting with material flow.

Detailed instructions about the steps in the following procedure, such as creating and handling a production order, issuing materials, handling operations, and handling purchase orders are provided in To perform operation subcontracting with material flow support.

To perform subcontracting without material flow support, complete these steps:

  1. Create production order

    In the Production Order (tisfc0101m100) session, manually create a production order or transfer planned production order.

    In the Production Order (tisfc0101m100)without material session, the operations of the routing selected for the production order are displayed in the Operations tab after specifying the routing. An indicator for subcontracted operations is present.

    The data specified on the routing determines that material flow is not supported for the subcontracted operations of this production order.

    See the sections about the job shop Bill of Materials and the job shop routing in The setup of operation subcontracting without material flow for details.

    In the Materials tab, no subassemblies are present for the subcontracted operations and the operations preceding the subcontracted operations.

  2. Release production order

    Issue materials for the first operation.

  3. Generate subcontracting purchase order

    You can generate the subcontracting purchase order when the production order is released, or after completing the operation preceding the subcontracted operation.

    On the subcontracting purchase order line, the subcontracted service item is specified.

    The subcontracting purchase order has no material supply lines, because the transfer of components and subassemblies is not supported.

    Instead, you can add a text on the subcontracting purchase order line that what the subcontractor is to do, for example, add a component to the subassembly.

  4. Complete subcontracted purchase order

    When the subcontractor has completed the subcontracting operation and the physical subassembly returned by the subcontractor has been received in the warehouse, you complete the subcontracting purchase order in LN according to the applicable order procedures, which may include automatic steps.

    The receipt is performed in the Warehouse Receipt (whinh3512m000) session if, for the subcontracted service item, the Release to Warehousing check box is selected in the Receiving tab of the Items - Purchase by Site (tdipu0181m000) session. If cleared, the receipt of the item is registered in Purchase Control.

  5. Complete subcontracted operation
    When completing a subcontracted operation, the operation costs of the subcontracted operation are assigned directly to the production order. This is displayed in the Job Shop Financial Transactions (ticst3500m000) session. This session is accessed from the Production Orders (tisfc0501m000) session via the References menu, option Costs, option Job Shop Financial Transactions.
  6. Issue materials

    Issue the materials of the completed subcontracted operation to production.

    Because the flow of materials is not supported, issuing the materials to production is a mere administrative step. Therefore, this is done after the subcontracted operation is completed.

  7. Complete subsequent operations
    Complete any subsequent operations.
  8. Process purchase invoice and post integration transactions

    Before closing the production order, you must match and approve the subcontractor’s invoice and post the integration transactions in Finance.

    This is because the costs of aSubcontracted Service are booked to the Work in Process of the production order, since Subcontracted Service items have no inventory on which to book the costs.

    For details, see Invoice matching and integration transactions and Processing purchase invoices.

  9. Complete and close production order
    To complete the logistic and financial bookings, complete and close the production order.