material provide to vendor is at the last level of BOM component (ROH)

[Former Member]

Hi,

Not sure if Standard SAP is able to perform movement 541 (replenish to subcon) at the lowest level of the BOM component? Here is the explanation.

Usually,  during standard SAP of "material components provide to vendor", the component level for the BOM is only one level, like the following figure.

Scenario:
However, I would like to know when perform replenishment for component stock provide to subcontractor, if the component provide to vendor is down to the last level of BOM, which is at raw material level (i.e. BOM level is third level that of the ordered material), how to execute this in SAP (see following figure)?

Question:

1 – If, during PO creation, how to insert last level of BOM components for those ROH material belong to comp A, comp B, and comp C given that the order material (i.e. #ABC) is made up of Comp A, comp B, and comp C?

2 – If no.  1 is possible, when come to replenishment those raw components stage (541), will the system perform posting of 541 accurately (quantity and account posting)?

3 - If questions no 1 and no 2 are possible, does the goods receipt and consumption (543) able to consumed the first level BOM (i.e. Comp A, B, C) and its last level BOM components (A1 till C2) accurately in term of quantity and value?

My workaround:

I am thinking about user to manually keying in the last level BOM component (i.e. A1 till C2) during ME21N in the component pops-up screen, however, if the raw components are lot, it can be quite troublesome. Further, not to mention doing this way, will it accurately reflect the account value posting for 1st level of BOM (i.e. Comp A to C) during 541 and 543?

If your current business has such practise like above, appreciate your enlighten.

Regards,
Daniel

[JL23 · Accepted solution]

The components in the bill of material used for the subcontract PO have to be exactly as you want to send the materials.

if it is a multi step process to get the final product, then you have 2 options:

- you create a BOM for end material which has all components that you need to send to the subcontractor. You just create one subcontracting PO to your vendor.

or

- you create a subcontract PO per process step. which means you create 1 order the finished material and  in total 3 orders for your 3 semi-finished materials. (requires as well a material master for the semi-finished material along with a BOM)

[Former Member · Accepted solution]

Hi Jurgen,

I tried to understand your message, and could you help explain below?

You said ==> If it is a multi-step process to get the final product, then you have 2 options

My statement ==> It is only one process to get the final product, which is #ABC. This is the explanation:

Before issuing PO, there are two BOMs
1 - ABC made up of three components A, B, and C.

2 – Each of the three components A, B, and, C, in turn, made up of the following raw material components:

Step 1 - We issue a PO to the subcon vendor to purchase #ABC from a non-SAP system, and supply the ROH component A1 till C3 to the subcon vendor.

Step 2 - The subcon vendor will cut the ROH item into Comp A, Comp B, and Comp C in order to produce the ABC

Question 1 - Hence, not sure if above are multiple process or one process to get the final product as it will have impact on your two suggestions?

YOU SAID ==> You create a BOM for end material which has all components that you need to send to the subcontractor. You just create one subcontracting PO to your vendor.

Question 2 - do you mean like the following on the BOM? If yes, then what about the comp A, B, C? will it be a problem when come to 541 and 543 in term of quantity posting, and account value posting?

You said ==> You create a subcontract PO per process step. which means you create 1 order the finished material and  in total 3 orders for your 3 semi-finished materials. (requires as well a material master for the semi-finished material along with a BOM).

Question 3 ==> Not sure if this is possible given that of the volume of PO which need to create as presently only one PO is create to get the ABC. I think previous proposal is good with only concern on above in term of feasibility.

Thanks

Daniel

[former_member183424 · Accepted solution]

As per your scenario,

you used

ROH materials as raw material

COMP materials as semi-finished material

ABC is finished goods.

What is the procurement for ROH and COMP material

1. You have to purchase the raw material from any vendor, Do you?

2. You have to make the material COMP from ROH material from a subcontractor vendor. Do you?

Then you can give the component of COMP to make ABC material.

For this

1. You have to create a Standard PO for ROH material. Then receive ROH material

2. Send the ROH material to subcontracting vendor. Create a Subcontracting PO with base material COMP and component ROH using BOM. Then receive COMP material.

3. Send the COMP material to another subcontracting vendor. Create another Subcontracting PO with base material ABC and component COMP using BOM. Then receive ABC material.

ROH means ROH A1, A2 ........ etc

COMP means COMP A. B. C.... etc.

[JL23 · Accepted solution]

You did not make clear why you need component A and component B and component C in your BOM of #ABC

from my point the picture that you just posted under your question 2 (with ROH A1, ROH A2 ... etc)  is exact how it should be if you are not interested to record anything on these steps taken by your vendor to make make the finished material.

We have many materials with alternative BoMs like in this example. If we produce it in our own plant, then we do it with with those intermediate step, because those intermediates may be used as component in several materials. If the same finished material is made by subcontractor, then we do not need this intermediate as nothing will be left, all ROHs will finally end in the finished material.

Hence the finished material has 2 Boms, for internal use like your fist picture with COMP A and COMP B in the BOM, and for external procurement with ROH1, ROH2  etc in the BOM

[kunal_ingale · Accepted solution]

Hi Daniel,

As pointed by Jürgen , Why you need to have the A , B and C components in the PO ,

As per my understanding user need to send out the actual materials A1, A2 , B1 , C1 , C2, C3 ....which are of business interest ,

Why you need A, B and C in picture as it is of no interest what Vendor is doing at his place.

As per subcontracting concept we need to Send the basic Raw material to vendor and get finished product , and should not be bother about the steps he is following.

Also if there is any byproduct as A, B or C , which needs to be received after recevign ABC, then you can add it to the BOM as byproduct ,

So the BOM can be like

ABC >>>> +A1 ,+ A2 , +B1 ,+C1 ,+C2 ,+C3 and - A , or -B or -C

please let me know if you have  any other view on this.

thanks

Kay

[Former Member · Accepted solution]

Hi Pedro,

We only create one PO in our process. But please scroll down to see my feedback to Jurgen so that you will understand what I am trying to depict here.

Regards,

Daniel

[former_member183424 · Accepted solution]

Okay,

As per your statement you want to make just one PO.

Don't need to use the middle component.

You can use direct raw material as finished material component.

Send the raw material directly to this subcontractor via movement type 541. Then create just one PO with item category L and give the finished material as base material on PO.

[Former Member · Accepted solution]

Hello Jurgen,

I understand what you are trying to propose, however, to avoid misunderstanding and ensure we are on the same page, let me explain further.

• We do not produce the component A, B, or C, however, we bought our own raw material (metal) and send the raw material to the subcontractor.
• The subcontractor will, in turn, cut the metal into component A, B, and C (i.e. many, many components of A, B, and C), which are required to produce the final finish goods of #ABC.
• With components A, B, and C, the finished gods #ABC is produced.
• Presently, there are two BOMs maintained in our legacy system for above process, which are:
  a - BOM between #ABC, and child components of A, B, and C.
  b - Individual BOM between Component A to its Child Raw Mat Metal A, and Component B to its  Child ROH Metal B, and Component C to its Child ROH Metal C
• The BOM is presently require to maintain between the ROH Metal and its correspond component A, B, C is require so that we know the number of component A in which one big piece of Metal A is able to cut into, same go to Metal B, and Metal C.

Question,

1 – I understand what are you trying to propose, however, if I forsake the 2^nd level BOM (i.e. Individual Component A, B, C to its correspond Metal child raw material metal), how are we going to keep track the number of a components in which a metal raw material can be cut into? Further, if base on what you said (i.e. A BOM of a finished goods #ABC to individual Raw material, instead of Component A, B, C), will the costing derive correctly?

Sorry I tried to insert a picture for the above point description but the "insert" button does not allow.

Hope you can revert.

Regards,
Daniel

[JL23 · Accepted solution]

why do you need to track the number of a components in which a metal raw material can be cut into?

if that is needed, then you have to have a separate order for this, as explained earlier.

if these intermediate components are getting completely consumed to produce the finished material, then you will not have anything left, hence I do not see a need to keep track of that based on the given information.

I do not foresee any issue with costing, except you still have something in mind which is not yet written here.

[Former Member]

Hi Daniel,

I never came across such Biz scenarios but mine suggestion is if your BOM ratio from A to A1 and A2 is 1:1 than you can maintain the components A1 and A2 with A material  directly in BOM while creating main BOM so it can be defaulted in PO automatically.

Or if your ratio and components are changing frequently then you can go as you told that maintained directly in PO.

[former_member183424]

I have seen the scenario.

Why don't you use component of ABC as

ROH A1 = 10

ROH A2 = 10

ROH B1 = 10

ROH C1 = 5

ROH C2 = 11

All unit are in KG

What is the reason to use COMP A, B, C ??

please clarify..