Business requirements

[Former Member]

Hi Experts

can any one help to solve this problem?

these are the requirements

1) Demand comes from external system and the production schedule is passed on to a external manufacturer (XYZ) through a service PO ( External manufactured does the manufacturing)

2) Raw Materials are ordered from a different external suppliers and shipped  to XYZ to start the Production

3) XYZ then sends a report dispatch once the goods are manufactured and the PO is receipted.

4) Transport is arranged by the main company (ABC)  to pick the goods from the external manufacturer and deliver to customers.

what will be the solution?

what will be the flow chart?

thanks in advance

salman

[Former Member]

Hi,

Service PO for the labour charges is ok,Since the XYZ is giving service that icludes labour work to process the raw materials,

But point is here that you also supply raw materials to XYZ, Either you have to sell the raw materials to XYZ or send the raw materials to XYZ through challen,

Hence as per AKPT already mentioned use subcontract process so that raw material easily send to the XYZ, and after processing he will create incoice against PO and send the materials.

for this you have to create BOM for the component to create challen,

You have also mentioned the despatch of materials from XYZ the customers,How here the excise rules could be maintained or there is legal issues contents,

for the legal compliances,either the XYZ should be Dealer to sell the goods or the DEPOT/Warehouse,

it always recommended to use best business practices,

Best Regards,

Devendra

[Prasoon]

Hi,

   I would suggest to go for subcontracting scenario. You may check the following steps:

1. Create subcontract PO for the parent material to the vendor XYZ. Maintain the labor cost in the PO. Include the freight conditions in the PO, with freight vendor.

2. Create separate PO for raw materials to external suppliers. Maintain the "SC vendor" flag and maintain the subcontract vendor (used in step 1) in the delivery address tab of the PO, as shown below:

3. Once the GR is posted for the above raw material PO, the movement type will be 101 O , which will automatically post the stock to the "stock provided to vendor" (similar to 541). You may check the stock in MMBE.

4. Once the vendor XYZ manufacture the product, you can ask them to dispatch and you can receive the materials as in normal subcontract PO. Check the accounting entries.

4. Since the freight conditions are maintained in the subcontracting PO, you can pay the freight amount to the corresponding vendor using planned delivery cost option in MIRO.

   Check the scenario and revert back.

Regards,

AKPT