Subcontracting with Source Location in SNP (SAP Library

Subcontracting with Source Location in SNP

Purpose

Subcontracting involves the procurement of a product from a supplier (the subcontractor) to whom the procuring entity provides components for the purpose.

Example

A screw manufacturer makes screws in his own plant. However, the screws are packed by an external service provider – a subcontractor. The screws are sent to the latter, who duly packs them and returns the packed screws to the screw manufacturer.

In planning with a source location, an SNP planned order is generated for the supplier (source location) who acts as a subcontractor. During the manufacture of the screws, the subcontracting component “packaging” is managed from the legal and cost standpoints as part of the manufacturer’s stock on hand. When the goods receipt against the PO is recorded for the packed screws, the screw manufacturer’s consumption of the subcontracting component is also posted.

You can make use of this scenario if you work with several subcontractors or if you allow both in-house manufacture and procurement on a subcontracting basis for a product.

Note

● Only one plant per subcontractor is currently supported (for each product) in SAP APO. This means that always only one plant can order from one subcontractor and the subcontracting components (materials/components provided to the subcontractor) can only come from the plant to which the ordered product is supplied. If you have modeled several plants per subcontractor in SAP R/3, you can transfer these relationships to the SAP SCM system via CIF (Core Interface). They are then represented as one-to-one relationships between subcontractors and plants in SAP APO. For more information, see Location Type Subcontractor.

● In SNP, the heuristic-based and optimization-based planning approaches are available for the subcontracting process. The planning procedures deployment, transport load building (TLB), and capacity leveling are not possible.

This graphic is explained in the accompanying text

Prerequisites

The system plans in the source location if a location-specific product master record exists for the ordered product (for example, packed screws).

Caution

If the master record for the ordered product is created retrospectively, stock inconsistencies may arise.
A report is available to correct this error. Further information is available in SAP Note 544161.

Data in the SAP R/3 System

The following data must have been created in the SAP R/3 system and transferred to the SAP SCM system via CIF (Core Interface):

● The end (finished) product
The procurement indicator F for external procurement must have been set in order for the source determination facility to be able to find the subcontractor.

● The subcontracting components belonging to the end product
The procurement indicator F for external procurement must have been set in order for the source determination facility to be able to find the subcontractor.

● The supplier who is to manufacture the end product as subcontractor

● A purchasing info record of the category subcontracting which documents the subcontractor as the source of supply of the end product

● If necessary, an SNP production data structure (SNP-PDS), if you are using this instead of a production process model (PPM) and wish to generate it from SAP R/3 data (see also Production Data Structure in SNP)

Integration Model

The integration model of the CIF with which you wish to transfer your data from the SAP R/3 system to the SAP SCM system must contain all the above-mentioned data.

If you are using an SNP PDS and wish to generate it from SAP R/3 data, you must choose the option SNP Subcontracting in the integration model. In this case, all master data in the subcontractor location, such as the product master data and the transportation lane from plant to subcontractor, is automatically created in the SAP SCM system.
For more information, see Integration of Master and Transaction Data.

Data and Settings in the SAP SCM System

The following data and settings must exist in the SAP SCM system:

● External procurement relationships and transportation lanes

From the purchasing info records, the SAP SCM system automatically generates an external procurement relationship of the category subcontracting for the finished product and a transportation lane from subcontractor (source location) to plant (destination location).
This transportation lane is assigned to the external procurement relationship for the end product.
See: Transportation Lane and Automatic Creation of Transportation Lanes

● Transportation lanes from plant to subcontractor

If you are using an SNP PPM, you must manually create a transportation lane from the plant (source location) to the subcontractor (destination location) for all components that are to be provided by the plant. If you are using an SNP PDS generated from SAP R/3 data, this step does not apply.

● Location of type subcontractor

This is only required, if the subcontractor processes the same product for multiple plants. In this case, you must manually create a location of the type subcontractor for each plant-vendor combination.

● Means of transport

You must maintain the means of transport for all relevant transportation lanes.

● Product master in the subcontractor location

If you are using an SNP PPM, you must create the finished product and all components in the subcontractor location and assign them to model 000. If you are using an SNP PDS, this step does not apply.

● Production process model

You create an SNP PPM for the end product and assign it to model 000. You specify the subcontractor location as the planning location. In doing so, note that the transportation lot size defined in the transportation lane and the production lot size specified in the PPM should be identical. If this is not the case, the system takes the transportation lot size into account.

If you are using an SNP PDS, this step does not apply.
See also: Production Process Model

● Transfer to SAP R/3 system

You must make the relevant settings in Customizing so that SNP orders can be transferred to the SAP R/3 system. To do so, choose SAP Advanced Planning and Optimization -> Supply Chain Planning -> Supply Network Planning -> Basic Settings -> Configure Transfer to OLTP Systems.
Note the following: If you have set No Transfer, the orders will not be transferred, even if you have made a different setting at the Supply Chain Planning interface for SAP APO.

● Further settings

You must also take into account the prerequisites set out in the documents Running the Heuristic in the Background und Running the Optimizer in the Background. The following special aspect applies to optimization-based planning: Only either the transportation capacity or the production capacity should represent a constraint for planning. For the SNP Optimizer, production and transportation represent a coherent unit.

Process

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1. Release of the Demand Plan to Supply Network Planning

You release the demand plan from Demand Planning to Supply Network Planning.

2. Execute a multilevel heuristic or an optimization run

To plan the subcontracting, you can use the standard planning book 9ASNPSBC with the data view SUBCONTRACTING. It contains the key figures specific to the subcontracting.

You execute a multilevel heuristic or an optimization run for the end product. The SAP SCM system carries out the following activities at the subcontractor location:

○ It generates the following for the end product:

■ An SNP planned order of the category subcontracting containing the PPM for the end product as the source of supply

■ An SNP stock transfer of the category subcontracting containing the plant as the destination location.

○ On the basis of the SNP PPM, it plans the subcontracting components for the SNP planned order and carries out a source determination process there.
If a transportation lane from the plant to the subcontractor exists, the system creates stock transfer reservations, specifying the subcontractor location as the destination, for the subcontracting components in the plant. These are transferred to SAP R/3.

Following the CIF transfer, a purchase requisition is created for the end product in the SAP R/3 system. It contains the components for the end product.

Running the Optimizer in the Background

Source Determination in Supply Network Planning

3. Conversion of R/3 purchase requisition for end product

You convert the R/3 requisition of the category subcontracting for the end product into a purchase order. You make the conversion in the SAP R/3 system. Through the conversion, the SNP stock transfer is deleted in SAP APO and the PO created.

See also: Converting Purchase Requisitions

4. Sending the subcontracting components to the vendor

○ If you work with MRP areas for subcontractors in the SAP R/3 system, the following processes take place in the latter system: a delivery is created for the stock transfer reservation, picking takes place for this delivery, and a goods issue is posted. The subcontracting components are transferred from plant stock to the stock of material provided to the vendor (subcontracting stock/stock with subcontractor). Since the delivery is not MRP-relevant, it does not appear in the SAP SCM system.

○ If you do not work with MRP areas for subcontractors in the SAP R/3 system, the subcontracting components are transferred directly from ”plant stock” to ”stock of material provided to vendor”.

In each case, ”stock of material provided to vendor” shows a plus and ”plant stock” is reduced.

5. Posting the goods receipt for the end product

You post the goods receipt for the end product in the SAP R/3 system. In the SAP SCM system, the PO quantity is reduced by the quantity of the goods receipt. The system increases the unrestricted-use stock for the end product.
At the same time the goods receipt is posted, the goods issue for the subcontracting components provided to the subcontractor is posted. The “stock of material provided to the vendor” is reduced accordingly.