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Subcontracting E2E Process Flow in SAP MM

Subcontracting E2E Process Flow in SAP MM

Picture Description

This flowchart outlines the subcontracting process in SAP Materials Management, specifically within the materials management module.

  • Requirement of Subcontracting Material (MRP/Manual): The process begins with the identification of the need for subcontracting material, which can be determined either manually or through the Material Requirements Planning (MRP) process.
  • Create Subcontract Purchase Order (PO)/Schedule Lines: The buyer then creates a subcontracting purchase order and schedule lines for the material needed.
  • Approve PO/Schedule: The purchase order and schedule are then approved by the appropriate authority.
  • Transfer Components to Subcontractor: The warehouse clerk is responsible for transferring the necessary components to the subcontractor to perform the work.
  • Create Subcontracting Challan: A subcontracting challan, which is a type of shipping document, is created for the transfer of goods to the subcontractor.
  • Delivery Note: These documents are generated and accompany the goods sent to the subcontractor. They serve as legal documentation of the transfer and include tax information.
  • Dispatch of Goods: The actual physical dispatch of goods to the subcontractor follows.
  • Goods Receipt: Upon completion of the subcontracting work, the goods are received back from the subcontractor.
  • Print GR Slip: A Goods Receipt (GR) slip is printed, which is used for recording the receipt of goods in the system.
  • Reconcile Subcontracting Challan: The subcontracting challan is reconciled with the goods receipt to ensure that the correct goods and quantities have been received.
  • Complete/Reversal Re-credit Subcontracting Challan: The process of completing or reversing the re-credit of the subcontracting challan occurs, adjusting any discrepancies in inventory.
  • Procurement with QM: Quality Management (QM) procedures are integrated into the procurement process to ensure the quality of the received goods meets the required standards.
  • Inventory GR/IR Subcontracting Consumption: This step involves recording the goods receipt and invoice receipt for the subcontracting process and accounting for the consumption of materials.
  • GR/IR Vendor: The process then moves on to the goods receipt/invoice receipt reconciliation with the vendor.
  • Invoice Verification: Finally, the accounts payable team performs invoice verification to confirm that invoicing from the subcontractor matches the goods received and the purchase order terms.
  • Return to Vendor (Optional) / Inventory Transactions Postings: This optional step involves returning goods to the vendor if necessary and posting the appropriate inventory transactions in the system.

The flowchart provides a clear visual representation of the subcontracting process in SAP ERP, with a focus on the steps involved from the initial need through to the invoice verification and potential return of goods.

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